Lionsgate Upped Q1 Home Entertainment Revenue 8% to $186.5 Million

Retail sales of movies and TV shows continue to have an outsized impact on Lionsgate’s studio business fiscal bottom line.

The Santa Monica, Calif.-based media company reported first-quarter fiscal year 2023 (ended June 30, 2022) home entertainment revenue of $186.5 million, which up nearly 8% from revenue of $173 million in the previous-year period.

Home entertainment revenue increased due to higher digital media revenue of $20 million, offset by lower packaged media revenue of $11.9 million driven by Lionsgate Original Releases. The increase in digital media revenue was due to an increase of $13.6 million from Lionsgate Original Releases due to higher revenue from direct-to-platform (i.e., SVOD) releases, and an increase of $6.4 million from Other Film due to higher revenue from our acquired library titles.

Sales of Lionsgate original movies, TV productions and licensed content represented 67% of the quarter’s studio business revenue ($278.8 million) — up from 59% in the previous-year period’s total of $291.2 million. Indeed, revenue from Lionsgate’s 17,000-title film and television library was $749 million for the trailing 12 months — and has exceeded the $700 million amount for several years.

Digital distribution of movies via transactional sales, VOD and premium VOD topped $154.3 million, with packaged media (DVD, Blu-ray Disc and 4K UHD Blu-ray) generating $22.1 million. That compared with packaged media revenue of $34 million and $112.2 million in digital revenue in Q1 FY 22.

Lionsgate’s top-selling packaged media release through six months of the year remains American Underdog: The Kurt Warner Story, while new release, The Unbearable Weight of Massive Talent, starring Nicolas Cage and Pedro Pascal, was released in retail channels on June 7. 

Lionsgate saw $31.3 million in revenue from sales of digital TV productions, and another $900,000 in packaged media. In the previous-year quarter, TV productions added $24.5 million in digital transactions, with packaged media adding another $2.3 million.

Home entertainment revenue for TV productions increased $5.4 million, or 20.1% due to digital media revenue from “Heels Season 1” and “The First Lady Season 1” in the current quarter, which compared to digital media revenue in the prior year’s quarter for “Weeds Seasons 1 to 8” and “Welcome to Flatch Season 1”.

Theatrically, Lionsgate saw just $10.9 million in box office revenue in the quarter, which was down from $28.4 million in the previous-year period.

Alliance Entertainment Expands Credit Line by $50 Million Ahead of SPAC Merger

Home entertainment distributor Alliance Entertainment Holding Corporation Aug. 4 announced the expansion of its line of credit to $225 million from $175 million. The Sunrise, Fla.-based distributor and wholesaler of music CDs, DVD and Blu-ray Disc movies, video games, electronics, arcades, and collectibles, secured the asset-based loan from Bank of America with syndication partners including Fifth Third Bank and Bank of Montreal.

Alliance has been with the trio of banks since February of 2017. The line of credit is used to finance operations supporting accounts receivable and inventory purchases.

“The support of our bank group over the last five years has helped Alliance to grow rapidly”, Chairman Bruce Ogilvie said in a statement. “We truly value their partnership to help us expand organically and through acquisitions.”

On June 23, 2022, Alliance Entertainment announced that it would become publicly listed through a merger transaction with Adara Acquisition Corp., a publicly traded special purpose acquisition company. The transaction is expected to close in the fourth quarter of 2022, at which point the combined company’s common stock is expected to trade on the NYSE American under the ticker symbol “AENT”.

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Paramount’s Q2 ‘Licensing and Other’ Revenue Increased 27%

Paramount Global Aug. 4 reported second-quarter revenue (ended June 30) of $587 million in its “licensing and other” business segment, which was up 27% from revenue of $463 million in the prior-year period.

The business unit, which includes Paramount Home Entertainment, said the revenue increase was primarily driven by the monetization of recent theatrical releases, including the 1986 box office hit Top Gun in foreign markets.

Pre-tax operating income for filmed entertainment increased $129 million in the quarter to $181 million from $52 million in the previous-year period, reflecting the strong performance of current year movie releases.

Indeed, revenue grew 126% year-over-year to $1.36 billion led by the $630 million revenue surge driven by the releases of Top Gun: Maverick and Sonic the Hedgehog 2 in the quarter.

Maverick has earned more than $1.3 billion to date at the box office globally and continues to draw audiences to theaters. In addition to being the most successful Paramount movie domestically, it is now in the Top 10 domestic films of all-time.

Notably, Maverick has not yet been released in retail channels, which portends strong future digital and packaged media sales for the Tom Cruise sequel.

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Meanwhile, The Lost City and Sonic the Hedgehog 2 debuted number one at the box office and in retail channels, joining Scream, Jackass Forever and Top Gun: Maverick to total five No. 1 films in the first half of the year, with Sonic 2 making history as the biggest video game movie opening of all-time.

“At the heart of that [revenue] growth was our hugely popular content, including the cultural phenomenon and No. 1 movie in the world, Top Gun: Maverick,” CEO Bob Bakish said in a statement. “Our deep and growing library of valuable IP, coupled with the strength of our best-in-class assets, ensures we are well-positioned to continue to maximize value for our shareholders.”

Paramount’s ‘The Lost City’ Tops Second Week on U.K. Home Entertainment Chart

Paramount Home Entertainment’s The Lost City held onto the No. 1 spot on the U.K.’s Official Film Chart for the second week thanks to digital sales the week ended July 13.

Sandra Bullock and Channing Tatum’s rom-com denied Warner Bros. Home Entertainment’s Operation Mincemeat the pole position, though the latter, which stars Colin Firth and Matthew MacFadyen as WWII intelligence officers who have to outwit German forces, climbed six spots following its release on disc.

Warner’s The Batman held at No. 3, finishing ahead of this week’s highest new entry, Disney/Marvel Studios’ Doctor Strange in the Multiverse of Madness at No. 4. The sequel to Doctor Strange and currently available on digital downloads only, this is the latest Marvel Cinematic Universe to be made available for home entertainment (with Thor: Love and Thunder the most-recent theatrical release)

Universal Pictures Home Entertainment’s The Bad Guys climbed to No. 5, while the second new entry of the week, The Northman, debuted at No. 6. The action-adventure stars Alexander Skarsgård as a young Viking prince who heads on a quest to avenge his father’s murder.

Sony Pictures Home Entertainment’s Morbius dropped five spots to No. 7, while Paramount’s original Top Gun held strong at No. 8, as does the studio’s Sonic the Hedgehog 2 at No. 9. Finally, Universal’s Sing 2 finished the week at No. 10.

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Official Film Chart Top 10 – July 13, 2022

Rank Previous Week Movie Distributor
1 1 THE LOST CITY PARAMOUNT
2 8 OPERATION MINCEMEAT WARNER
3 3 THE BATMAN WARNER
4 NEW DOCTOR STRANGE IN THE MULTIVERSE OF DISNEY/MARVEL
5 6 THE BAD GUYS UNIVERSAL
6 NEW THE NORTHMAN UNIVERSAL
7 2 MORBIUS SONY PICTURES
8 5 TOP GUN PARAMOUNT
9 4 SONIC THE HEDGEHOG 2 PARAMOUNT
10 9 SING 2 UNIVERSAL

© Official Charts Company 2022

2022 Mid-Year Report: Netflix, Paramount Going in Opposite Directions, Video Game Mega-Mergers, Redbox Lifeline

NEWS ANALYSIS — With half of 2022 in the books, the entertainment industry’s status quo has been turned on its ear as a market heavyweight (Netflix) and subscription streaming video attempt to correct course, Paramount flexes its fiscal muscle and video game publishers seek blockbuster consolidation, among other newsworthy events.

Netflix Sub Loss, Stock Freefall

When Netflix revealed an unexpected 200,000 net subscriber loss in the first quarter, the shockwave was only beginning. The streaming behemoth saw its stock price plummet 35% overnight, with shares down now almost 70% year-to-date. Co-founder, co-CEO Reed Hastings saw his personal stake in Netflix freefall $648 million in value. With the streamer projecting an additional two-million sub loss in the current quarter, layoffs have followed as the service seeks to cut costs and launch an ad-supported plan to inflation-leery consumers.

“Both [co-CEO and CCO] Ted [Sarandos] and I regret not seeing our slowing revenue growth earlier so we could have ensured a more gradual readjustment of the business,” Hastings wrote in a June 23 staff memo. “We plan to return to a more normal course of business going forward.”

Paramount Pictures Tops North American Box Office

Paramount Pictures, which in recent years was on the verge of no longer being viewed as a major studio due to its meager output of films, found itself as the top-grossing studio in Hollywood. Thanks to the enduring box office appeal of Tom Cruise’s fighter jet sequel Top Gun: Maverick and the video game adaptation Sonic the Hedgehog 2, Paramount was the lone studio to break $1 billion in revenue across eight theatrical releases through the midyear. Maverick has topped $570 million at North American screens, and $1.1 billion globally, with Sonic 2 adding $191 million domestically.

Netflix/Disney+ Launching Ad-Supported SVOD Plans

What a difference a few weeks make. Speaking in early March at an investor event, Netflix CFO Spencer Neumann said the streamer would not pursue a less expensive ad-supported subscription plan.

“It’s not in our plans right now,” Neumann said.

Then came the subscriber losses in April, employee layoffs and Wall Street downturn. Now Netflix is joining rival Disney+ in rolling out an ad-supported plan that could attract new subs and generate significant incremental revenue possibilities.

“Never say never,” said Neumann.

North American Box Office Bounces Back
 
Thanks to Tom Cruise’s enduring star power and some wayward dinosaurs, June ended with the highest box office — $953.4 million — since the pandemic began in March 2020. The tally bests previous ticket sale pole sitter, December 2021, which tracked about $920 million in revenue largely on the back of Sony Pictures’ Spider-Man: No Way Home with $573 million in revenue.
 
Last month, Universal Pictures’ Jurassic World: Dominion realized $313.1 million in ticket sales. Other significant revenue generators included Disney/Pixar Animation’s Lightyear with $97.1 million, and Warner Bros. Pictures’ biopic Elvis with $44.7 million.
 
Indeed, the $216 million box office generated during the weekend of June 10 would have ranked as the fourth-highest three-day box office weekend in 2019. Additionally, the weekend of June 17 marked only the fourth time in history that three films generated more than $40 million each at the box office— and the first time since 2013.
 
“We have consistently stated that a steady stream of diverse, compelling new film content, along with improving moviegoer sentiment, would be driving forces behind the reignition of theatrical exhibition,” Sean Gamble, CEO of Cinemark, said in a statement.
 
Chicken Soup for the Soul Entertainment Buying Redbox
 
Chicken Soup for the Soul Entertainment, owner/operator of the ad-supported Crackle+ streaming platform, is set to acquire Redbox Entertainment, operator of more than 38,000 DVD rental kiosks and branded digital properties, in an all-stock transaction valued at $375 million.
 
The deal continues a harried fiscal existence for Redbox since going public last October following a merger with a special purpose acquisition company, or SPAC. Redbox earlier this year disclosed it lost $140 million in 2021, its businesses undermined by the pandemic and supply issues. Last month, it laid off 10% of its workforce, or about 150 employees.
 
Discovery Closes $43 Billion WarnerMedia Acquisition
 
Discovery and WarnerMedia on April 8 announced the completion of their $43 billion merger, a union that creates a streaming-focused media giant that brings together a leading Hollywood movie studio (Warner Bros. Pictures) with a top producer of documentary and other non-fiction programming.
 
Warner Bros. Discovery as the new company is known, is headed by Discovery CEO David Zaslov and CFO Gunnar Wiedenfels. The company combines WarnerMedia’s premium entertainment, sports and news assets with Discovery’s non-fiction and international entertainment and sports businesses, including the Discovery Channel, Discovery+ SVOD service, Warner Bros. Entertainment, CNN, CNN+, DC, Eurosport, HBO, HBO Max, HGTV, Food Network, Investigation DIscovery, TLC, TNT, TBS, truTV, Travel Channel, MotorTrend, Animal Planet, Science Channel, New Line Cinema, Cartoon Network, Adult Swim, Turner Classic Movies and others.
 
Amazon Completes $8 Billion MGM Studios Purchase
 
Amazon and MGM Studios on March 17 announced the completion of a $8.5 billion merger first announced in May 2021. The companies made the announcement after the deadline for the Federal Trade Commission to block the deal passed. Amazon gets access MGM’s library of more than 4,000 movies, including the lucrative “James Bond” franchise, and 17,000 TV shows. The European Union March 15 gave its regulatory approval of the transaction.
 
“MGM has a nearly century-long legacy of producing exceptional entertainment, and we share their commitment to delivering a broad slate of original films and television shows to a global audience,” Mike Hopkins, SVP of Prime Video and Amazon Studios, said in a statement. “We welcome MGM employees, creators, and talent to Prime Video and Amazon Studios, and we look forward to working together to create even more opportunities to deliver quality storytelling to our customers.”
 
SVOD Password Sharing
 
With Netflix testing charging subscribers in Chile, Costa Rica and Peru a reduced fee if they share their passwords with third parties, the streamer is attempting to put a lid on a growing trend: password mooching.
 
While Netflix initially encouraged the practice as an organic way to entice subscriber growth, with the SVOD behemoth now realizing lower quarterly net sub adds, new data from Cordcutting.com estimates the service will lose more than $790 million in membership revenue this year due to unauthorized password sharing — tops among all SVOD services.
 
Other streaming platforms such as HBO Max, Disney+ and Hulu would lose $477 million, $440 million and $436 million, respectively. That “breakage” revenue collectively tops $2.3 billion in annual membership revenue lost when including Paramount+, Amazon Prime Video and Peacock.

Of the 215 million people in the U.S. using SVOD services, the report contends 25% are using someone else’s paid-for account. Indeed, the average account borrower accesses up to two, third-party accounts, which equates to almost 86 million shared accounts.

The report, citing a survey of 790 U.S. adults early this year, found that the most-shared accounts include HBO Max, Disney+ and Amazon Prime Video. Among survey respondents, Netflix remains the overwhelming favorite platform with 92% market share.

Video Game Mega Mergers

The gaming industry made headlines when Take-Two completed its acquisition of Zynga priced at more than $12 billion), and Microsoft made a $75 billion bid for Activision Blizzard, which has not closed yet.

With 3 billion people globally actively playing video games, including 200 million Americans, and fueled by a new generation of interactive features, gaming is now the largest and fastest-growing form of home entertainment.

Activision properties include the Call of Duty, Candy Crush, Diablo, StarCraft, Warcraft and Overwatch franchises. The acquisition aims to accelerate the growth in Microsoft’s Xbox gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse — described as a virtual-reality space in which users can interact with a computer-generated environment and other users.

Indeed, Call of Duty: Mobile reportedly surpassed $1.5 billion in revenue since launching in October 2019.

“Microsoft’s desire to bolster its metaverse … [underscores the] fact the metaverse is the next frontier of interactive entertainment,” Stifel analyst Drew Crum wrote in a January note.

Meanwhile, the Take-Two/Zynga merger combines the publishers of some of the biggest-selling game franchises. Take-Two properties include Grand Theft Auto, Red Dead Redemption, Midnight Club, NBA 2K, BioShock, Borderlands, Civilization, Mafia, and Kerbal Space Program. Zynga’s portfolio includes CSR Racing, Empires & Puzzles, FarmVille, Golf Rival, Hair Challenge, Harry Potter: Puzzles & Spells, High Heels!, Merge Dragons!, Toon Blast, Toy Blast, Words with Friends and Zynga Poker.

PwC: Packaged-Media Revenue to Decline 55% Through 2026

Consumer migration from packaged media movies to digital distribution continues, with new data from consulting firm PricewaterhouseCoopers (PwC) projecting that the U.S. home entertainment retail market will generate about $1.1 billion in revenue from the sales of DVD, Blu-ray Disc and 4K UHD Blu-ray  titles in 2026 — down almost 55% (or 17.5% annually) from revenue of $2.5 billion in 2022.

Sales of digital movies and TV shows should increase to $6.3 billion in 2026, from $5.6 billion this year. That includes $576 million from pay-TV operators and $5.7 billion from digital platforms, including Vudu, iTunes, Microsoft Movies and Redbox Digital, among others.

Digital rentals will remain flat at $1.7 billion, with $621 million originating from pay-TV operators and more than $1 billion from digital platforms.

Meanwhile, the U.S. subscription streaming video market will continue to flourish, as revenue grows exponentially. PwC contends the SVOD market will grow 8.5% annually to $33.6 billion in 2026, up from $25.3 billion in 2022.

A World Without Retailers

Home entertainment retailing is on the ropes.

The buzz phrase of the moment is “direct to consumer.” Streaming keeps gobbling up more and more consumer home entertainment dollars — more than 80%, according to the latest DEG numbers, for the first quarter of this year. And while transactional spending appears to be holding up, disc sales remain in a freefall, with the latest quarterly spending reporting showing consumer purchases of DVDs, Blu-ray Discs and 4K Ultra HD Blu-rays accounted for less than 5% of total home entertainment spending.

No wonder, then, that big retailers like Best Buy and Walmart are cutting back on their physical media sections. I shudder to think what the end result of all this may be — will there come a day when physical media is gone completely from the major retailers, and if we want to buy a DVD or Blu-ray Disc we need to go to a studio website or that grand e-commerce aggregator, Amazon.com?

To me, at least, that’s a chilling thought. I’ve always enjoyed the retail experience — the searching, the discovery — from the time I was a teen eagerly browsing the cut-out bins at Tower Records, The Wherehouse and Licorice Pizza (the store, not the movie) to the more recent days of Suncoast and the Virgin Megastore, with vast inventories of what seemed to be every movie ever made.

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Maybe that’s why a few years ago, I resurrected my vinyl record albums, bought a new turntable and had Chuck Berry (my sound man, not the late rock pioneer) hook everything up to my home theater system. I regularly visit used record stores and also spend at least an hour a day on Discogs and/or eBay. The philosophical question I ask myself is this: Do I visit these stores because I am a record collector, or am I a record collector so I can visit these stores and once again enjoy the retail experience?

Hard to say.

I will say that I enjoy Netflix as much as anyone, with Discovery+ a close second. But there’s so much good stuff out there that isn’t on any of the streaming services that I regularly visit digital retailers such as Vudu and Redbox On Demand to check out what else is available. And I truly wish there was at least one big disc store with thousands of different titles — not just to buy, but also to browse and maybe get acquainted with something I ordinarily would never have thought about, or even known about.

But, alas, there isn’t any such store, at least not near my home.

I understand the concept behind, and benefits of, direct-to-consumer sales. The lack of a middle man means higher profits for the brand, and, hopefully, lower prices for the consumer. But as a consumer, I feel as though I have lost something — the joys of search and discovery, which I can still do online at the handful of third-party digital retailers that are bucking the DTC trend, but even that’s not nearly as gratifying as searching and discovering new movies and shows in a physical environment.

I fear there’s also an element of self-fulfilling prophecy. As physical media sections shrink, the lack of choice leads to even less business — which, in turn, leads to even smaller sections.

I sincerely hope we never get to the proverbial point of no return — although, in a way, we are already there.

Best Buy Q1 Entertainment Sales Fall 13.6% Due to Tough Pandemic Comps

Best Buy May 24 reported first-quarter (ended April 30) entertainment revenue of $593.6 million, with same-store sales dropping 13.6%.

That compares with an uptick of more than 32% on revenue of $687 million during the previous-year period when consumers spent large on home entertainment due to COVID-19 shutdowns of alternative entertainment choices.

The segment includes products such as DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software.

International entertainment same-store revenue dropped 7.5% to $60.2 million from $65 million, which was up 12.2% from the previous-year period in 2020.

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Best Buy CEO Corie Barry

CEO Corie Barry said the sales declines across all retail categories underscore the outsized results during the pandemic when consumers upped their purchases in part due to government-imposed stay-at-home living.

“Even with the expected slowdown this year, we continue to be in a fundamentally stronger position than we were before the pandemic from both a revenue and operating income rate perspective,” Barry said in a statement. “We are confident in the strength of our business and excited about what lies ahead.”

On an earnings call, Barry said, “On one hand, consumers still have relatively strong balance sheets. They continue to spend, wages are up, and unemployment is at record lows. On the other hand, many consumers are lapping stimulus income they received last year and are also facing issues like higher gas and food prices, rising interest and mortgage rates, recession fears, stock market volatility, and geopolitical uncertainty, stemming from the war in Ukraine.

“Underlying all that is the gradual shifting of spend from stay-at-home purchases to more experiential spend on services and the activities many were unable to enjoy during the pandemic…. While the drivers of our results were largely as expected, the comparable sales decline of 8% was on the softer side, as inflationary pressures heightened throughout the quarter. That trend has continued into the beginning of Q2, and it does not appear that it will abate in the near term.”

Accordingly, she said, the company is “revising our guidance and now expect [a] fiscal ’23 comparable sales decline in the range of 3% to 6%. And we are correspondingly updating our non-GAAP operating income rate to a range of 5.2% to 5.4%. We will continue to proactively navigate this rapidly changing environment, balancing the day-to-day operations with our commitment to our long term-strategy and growth initiatives.”

Craig and the Camel May Be Gone, But Transactional Marketing Still Going Strong

For me, the pinnacle of marketing at the height of the DVD era was Craig Kornblau on a camel.

It was the heyday of event marketing. DVD had become such a monstrous success that disc revenues were outpacing theatrical. DVD potential was even a factor in deciding whether to greenlight movies.

No wonder, then, that at a time when a hot new DVD release could sell 20 million copies or more, just in the first week, the release of a big theatrical film on disc was hailed as a big event — and marketed accordingly.

I remember Disney’s gala launch party for the Ratatouille DVD, with more than a thousand guests crowding a ballroom at the Renaissance Hollywood Hotel for a gastronomical feast.

I remember flying to London for a party to celebrate New Line Home Video’s release of the Lost in Space movie.

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I remember Warner Home Video’s Superman party, where I joked to then-president Ron Sanders that the shindig probably cost the studio more than they were spending on advertising with Home Media Magazine all year.

I remember being flown to London by PolyGram to celebrate the DVD release of Phantom of the Opera, as well as three Super Bowls (thanks, Bill Sondheim!) to drum up excitement for the subsequent NFL Super Bowl DVD.

And then there was Craig Kornblau and the camel. The “event” was the 2002 DVD release of The Scorpion King, and amid a throng of beefy warriors, belly dancers and flame explosions I remember looking up and seeing Kornblau, at the time president of Universal Studios Home Video, and his top marketing executive, Ken Graffeo, riding down Sunset Boulevard on a pair of massive dromedaries. A Los Angeles Times article from October 2002 picks up the story from there: “Moments later, the entire caravan, writhing women, camels and all, crossed Sunset Boulevard to the Virgin Megastore across the street, where confused shoppers were rapidly overrun by belly dancers, snake handlers and jugglers.”

The reporter quoted Kornblau as saying the studio hoped to generate earn more than $36 million in the first week of sales, more than the first week of box office for the film’s theatrical release.

These days, physical and digital sales of movies, even combined, area fraction of DVD sales 20 years ago, due to the rise and domination of subscription streaming.

And yet studio marketers continue to “eventize” new transactional releases, although invariably some, if not most, of a campaign’s components take place virtually, often through tie-ins with social media influencers.

In this year’s Power Marketing report, our fourth annual look at the top marketing campaigns of the past year, we profile nearly a dozen standouts from the major studios — and as you’ll see, creativity and ingenuity are certainly not in short supply. Universal Studios Home Entertainment, for example, launched F9 into the home market by getting stars Vin Diesel and Ludacris to share custom content on their Instagram accounts, followed by F9 Fest, a huge press and social media influencer event with interviews, a rooftop zipline stunt experience and even an F9 museum, featuring vehicles from the film.

And Paramount celebrated the 50thanniversary of The Godfather, and the landmark film’s 4K Ultra HD debut, with all sorts of creative executions, strategic partnerships and publicity events. A press screening on the studio lot was preceded by a panel discussion with director Francis Ford Coppola and stars James Caan and Talia Shire — along with a street-naming celebration and the presentation of a star on the Hollywood Walk of Fame to Coppola.

Craig and his camel may be long gone, but “eventizing” home releases is certainly still a “thing.

Streaming Back to 80% of Home Entertainment Spending in Q1, DEG Says

Netflix may have taken a big hit as talk of “streaming fatigue” grow louder, but first-quarter consumer spending estimates from DEG: The Digital Entertainment Group show subscription streaming demand ticked back up after a slight dip during the 2021 holiday period.

The trade group estimated just slightly more than 80% of consumer spending in the first quarter of 2022 went to SVOD services, as the total amount of money spent on subscriptions rose nearly 17% to a record $6.93 billion, up from $5.93 billion in the first quarter of 2021.

The gain lifted total consumer spending on home entertainment 10.9% to $8.7 billion, DEG reported.

The SVOD share of total home entertainment spending almost matched its all time high of 80.2% from the third quarter of 2021, a tally that dropped to 77.2% in the fourth quarter.

On the transactional video-on-demand (TVOD) front, consumer spending was down less than 2% to $1.14 billion, from $1.16 billion. Digital sales of movies, TV shows and other filmed content rose 6.7% to $643.6 million from $603.1 million, but digital rental spending fell nearly 11% to $501 million, from $561.9 million in the year-ago quarter.

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Digital purchases of theatrical movie titles increased 17.3%, fueled by “renewed box office activity,” the DEG reported.

The DEG reported it is now tracking sales and rentals of premium-window digital releases, which typically fetch a higher price.

Consumer spending on DVD, Blu-ray Disc and 4K Ultra HD purchases in the first quarter of 2022 fell nearly 19% to an estimated $388.5 million, from $479.3 million, while disc rentals were down nearly 17% to $196.1 million, from $236 million in the first quarter of 2021.

Among the first quarter’s best-performing titles across transactional formats were American Underdog, Dog, Dune, Encanto, Ghostbusters: Afterlife, House of Gucci, No Time to Die, Sing 2, Spider-Man: No Way Home, Venom: Let There Be Carnage and Yellowstone: Season 4.