MPAA Report: Worldwide Consumer Theatrical and Home Entertainment Spending Reached $88.4 Billion in 2017

Consumer spending for the combined theatrical and home entertainment markets reached $88.4 billion worldwide, according to new theatrical and home entertainment data released by the Motion Picture Association of America (MPAA).

The global box office reached a new record high of $40.6 billion in 2017 – up 5% from the previous year. Home entertainment consumer spending also increased globally in 2017 to hit $47.8 billion, up 11% from 2016.

That’s according to the 2017 Theatrical and Home Entertainment Market Environment report, or THEME, which includes new information on the home entertainment market in addition to global box office figures and a moviegoer demographic survey.

“With more stories and more storytelling mediums than ever, our industry continues to adapt to an ever-changing world,” said MPAA chairman and CEO Charles Rivkin. “The global entertainment market is expanding on multiple fronts, constantly innovating to deliver an unparalleled experience to audiences worldwide. In 2017, not only did the global box office hit yet another record high, the number of subscriptions to online video services around the world jumped 33 percent to reach 446.8 million.”

“With the global box office continuing to grow and movies drawing younger, more diverse audiences, we see a bright future for theatrical entertainment,” said John Fithian, president and CEO of the National Association of Theatre Owners (NATO). “We are relentlessly innovating, investing in top-notch cinema infrastructure and advanced technology, to give audiences the very best movie experience.”

In 2017, global home entertainment consumer spending increased by 11% to $47.8 billion, and in the United States, the home entertainment market increased 5% from 2016 to $20.5 billion. Other findings:

  • The number of subscriptions to online video services around the world grew to 446.8 million in 2017 – a 33 percent increase compared to 2016.
  • Online video content viewing in the United States continued to increase in 2017, reaching 167.5 billion views and transactions – a 41 percent jump compared to 2016.
  • Americans now spend 49 percent of their media time on a digital platform.

 

The global box office’s record high was driven by a 7% increase in international markets ($29.5 billion), in large part due to growth in China. Japan, the United Kingdom, India, and South Korea rounded out the top five international markets after China. Cinema screens increased 8% globally in 2017, reaching just over 170,000, led by continued double digit growth in the Asia Pacific region (up 16%).

In the United States and Canada, while the domestic box office did not quite reach last year’s record of $11.4 billion, it matched 2015’s previous high of $11.1 billion. Other domestic findings include:

  • More than three-quarters of the population (263 million people) went to the cinema at least once last year.
  • The gender composition of this audience was even among men and women – 50-50.
  • More young people and diverse populations went to the movies in 2017. Audiences between the ages of 12 and 17 attended an average of 4.9 movies over the course of the year – more than any other age group, and closely followed by 18 to 24 year olds (4.7).
  • Per capita attendance was highest among Latino (4.5) and Asian (4.3) audiences.

Talent Firm Endeavor Acquires Video Streaming Company NeuLion

Digital media distribution company NeuLion and sports and entertainment talent firm Endeavor March 26 announced a merger agreement by which Endeavor will acquire NeuLion in an all-cash deal valued at about $250 million.

Under the terms of the agreement, Endeavor will acquire each share of outstanding common stock of NeuLion for 84 cents a share. Upon completion of the transaction, Plainview, N.Y.-based NeuLion will become a privately held subsidiary of Beverley Hills, Calif.-based Endeavor.

The talent firm will use NeuLion to help clients expand streaming video distribution and monetizing opportunities.

“NeuLion provides an ideal combination of technology and client services, and we’re excited for the value this brings to our existing partners and the foundation it provides for our future digital growth,” Ariel Emanuel, CEO of Endeavor, said in a statement.

The transaction, approved by NeuLion’s board of directors and by the written consent of holders of a majority of outstanding common stock, is subject to regulatory approvals and other closing conditions. It is expected to close in the second quarter of 2018.

“We’re excited by the value delivered to our stockholders through this transaction, and we’re looking forward to the dynamic opportunities that being part of the Endeavor family will provide for both our current and new clients,” said Roy Reichbach CEO of NeuLion.

NeuLion expects to release fourth-quarter 2017 earnings on March 30.

Deloitte Report: More Than Half of U.S. Households Subscribe to Video Streaming Service

American consumers’ appetite for streaming video continues to grow, with 55 percent of U.S. households now subscribing to at least one video streaming service, a 450 percent increase since 2009, according to a report from Deloitte.

Americans watch 38 hours per week of video content (39 percent of which is streamed), nearly the equivalent of a full-time job, according to Deloitte’s Digital Media Trends Survey. With more than 200 streaming video-on-demand options in the United States, the average streaming video subscriber is paying for three services, resulting in U.S. consumers collectively spending $2.1 billion per month on SVOD services. Nearly half (48 percent) of all U.S. consumers stream television content every day or weekly, up 11 percent year-over-year, according to the report.

The 12th edition of Deloitte’s Digital Media Trends survey provides insight into how five generations of U.S. consumers interact with media, products and services, mobile technologies and the internet. This year’s U.S. data was collected in November 2017 and employed an online methodology among 2,088 consumers.

The survey found pay TV subscriptions declined for the first time in recent years with 63 percent of households still subscribing to a traditional Pay TV service, down from 75 percent. Pay TV’s decline is especially pronounced among Generation Z (ages 14-20), Millennials (ages 21-34) and Generation X (ages 35-51).

“Consumers now enjoy unparalleled freedom in selecting media and entertainment options and their expectations are at an all-time high,” said Kevin Westcott, vice chairman and U.S. media and entertainment leader, Deloitte LLP, in a statement. “The rapid growth of streaming services and high quality original content has created a significant opportunity to monetize the on-demand environment in 2018.”

Pay TV is too expensive for what it offers, according to more than two-thirds of consumers. Nearly half (46 percent) of all pay TV subscribers said they are dissatisfied with their service and 70 percent of consumers feel they get too little value for their money. Among respondents who said they no longer have a pay TV subscription, 27 percent reported they cancelled their service within the last year. Furthermore, 22 percent of millennials say they have never subscribed to a pay TV service. Twenty-two percent of all consumers without pay TV say they don’t watch enough TV to justify the expense and another 19 percent say they simply cannot afford it. Fifty-six percent of current pay TV subscribers say they keep their pay TV because it’s bundled with their home internet access.

“As video streaming and demand for original content continue to grow, traditional and premium cable broadcasters will continue to rethink their business models,” Westcott stated. “Media companies are increasingly going direct-to-consumer with their own digital streaming services and snackable content. Ultimately, one challenge we see is that consumers may be reluctant to pay for exclusive content on top of their other paid subscription services and this may lead to some form of re-aggregation as limits on consumer spending could potentially hinder the growth of content platforms.”

This year’s data indicates a convergence of media behavior across three key demographics, according to the report. Gen X emerged as cutting-edge adopters of digital media, embracing the digital media behaviors already adopted by Gen Z and millennials. Deloitte calls this combined demographic group “The MilleXZials.” Other findings:

  • Seventy percent of Gen Z households had a streaming subscription, closely followed by millennials at 68 percent and Gen X at 64 percent, respectively;
  • About 70 percent of Gen Z and millennials stream movies compared with 60 percent of Gen X on a weekly basis;
  • Binge-watching behavior also witnessed a convergence among MilleXZials, with 91 percent of Gen Z, 86 percent of millennials and 80 percent of Gen X binge watching TV shows and more than 40 percent of millennials binge watching weekly (an average of seven episodes and six hours in a single setting);
  • Ninety-six percent of MilleXZials multitask while watching TV.

“Millennials were the first generation to embrace streaming media and watching video content on smartphones,” said Dr. Jeff Loucks, executive director, Deloitte Center for Technology, Media and Telecommunications, Deloitte LLP, in a statemen. “Some hoped that as millennials got older, they would settle down and watch pay TV. Instead, their Gen X parents are acting more like millennials, using streaming services, watching TV shows, movies and sports on smartphones and binge watching.”

Lastly, consumers are increasingly concerned about putting their personal data online. The study found 69 percent of consumers believe that companies are not doing everything they can to protect their personal data. However, 73 percent of all consumers said they would be more comfortable sharing their data if they had some visibility and control, and 93 percent of U.S. consumers believe they should be able to delete their online data when they want.

Roku Putting Emphasis on Content Distribution

Roku wants people to watch content on the Roku Channel. And consumers are responding.

Roku, together with Netflix, helped launch the subscription streaming video market more than 10 years ago with a branded “Netflix” media device – after Netflix co-founder Reed Hastings killed a planned proprietary Netflix player.

It was a shrewd move by Hastings focusing on nascent app technology and content distribution (and content creation) rather than antagonizing established CE manufacturers.

Roku, which comes from the Japanese word meaning “six,” symbolizing founder/CEO Anthony Wood’s sixth venture startup, continued down the hardware path bowing a series of set-top devices (including HDMI dongle sticks) and branded Roku TVs, enabling users to stream video from the Internet through a Wi-Fi connection.

Now Roku seeks to distribute third-party content directly through the Roku Channel. And content creators are responding, say company executives.

“It’s exceeded our expectations and is already material contributor to the video inventory that we sell through our advertisers,” Scott Rosenberg, GM and SVP of advertising, said on the fiscal call.

In addition to distributing content via the ad-supported Roku Channel, content holders can use a program called “Roku Direct Publisher,” which enables them to produce a dedicated app in the Roku Channel store.

“That content can also be syndicated and shown inside of the Roku Channel,” said Rosenberg. “So, it acts as a way to drive additional traffic, additional audience past content partners content.”

Roku says half of the AdAge Top 200 advertisers were clients on the Roku platform last year.

Roku platform revenue grew 129% to $85.4 million in Q4, with the largest contributor coming from advertising. Indeed, advertising made up about 75% of platform revenue and accounted for more than two-thirds of the $225 million in platform revenue for the fiscal year.

“Our entertainment networks are a great way to make our TVs better. There’s just a lot of areas that are driving our growth and that will ultimately contribute to continue to [average-revenue-per-user] growth,” said Wood.

 

 

 

Survey: Consumers Prefer Downloading Video to Streaming

Subscription streaming video is a global phenomenon, spearheaded by Netflix, Amazon Prime Video and Hulu.

But a new survey suggests many consumers are frustrated by their streaming experience and would prefer downloading content, according to a survey conducted by Penthera, which markets download-to-go (D2Go) functionality.

Downloading content on portable devices enables users to view later without an Internet connection. Netflix, Amazon Prime Video and Hulu allow subscribers to download select original content.

The survey – based on 804 respondents in January – found that 92% of consumers have been frustrated trying to stream video, with issues related to buffering (65%), slow loading (40%), and placement of advertising (50%).

When issues arise, 53% of respondents said they give up on that streaming session; 26% said they stop using the unsatisfactory service; 11% will cancel their subscriptions.

“Consumers expect content anywhere, on any device, but delivery on that promise is still at the mercy Wi-Fi connectivity,” Dan Taitz, president and COO, Penthera, said in a statement. “Our survey shows that fewer than 9% of respondents said they are ‘never frustrated’ when streaming.”

Penthera found 39% of survey respondents said they would be more likely to subscribe to a service offering D2Go functionality; 34% said they would be more likely to watch programming from a service offering the feature; 18% said they would be less likely to cancel a service with D2Go.

Nearly half of those surveyed said they used download-to-go technology; 21% said the use D2Go to avoid depleting their mobile data plans; 17% don’t want to pay for Internet access at their destination on an airline or at a hotel; and 53% said they’d be willing to pay up to $5 per month to have download as a feature from their favorite streaming service.

“The survey data shows [respondents] see download-to-go functionality as an important tool in assuring the availability of their favorite videos, even if only used occasionally,” said Colin Dixon, analyst with nScreen Media.