Following a 2020 that saw the coronavirus pandemic upend the global entertainment industry, home entertainment in the United Kingdom blossomed, with revenue up 26% to £3.3 billion ($4.5 billion) compared with £2.6 billion ($3.5 billion) in 2019, according to new data from the British Association for Screen Entertainment, the Official Charts Company, Futuresource Consulting and Kantar.
Top-selling title in 2020: Warner Home Video’s Joker, with the Oscar-winning drama tallying 1.4 million units across digital and physical formats. The four best-selling titles all topped one million transactions across disc, EST and TVOD, and the balance of the Top 10 all exceeded 500,000 transactions. In short, it was a banner year for U.S. studios.
“2020 saw digital home video reach new heights, with digital sell-through and rental growth accelerating despite pandemic enforced movie delays,” David Sidebottom, principal analyst, entertainment, Futuresource Consulting, said in a statement. “The strength of library content has been truly impressive and sustained throughout the year, even more notable given the continued proliferation of wider video streaming services.”
Like much of the world, the No. 2 home entertainment market saw consumers staying home in the face of the threat from coronavirus, with digital formats making huge gains; taking advantage of the instant access and range of content choice. Total electronic sellthrough (or digital purchase) sales across both film and TV content delivered 14.5% growth year-on-year after a record period of growth during the March lockdown.
Spend on TVOD (transactional video-on-demand), supported by shoppers new to the category, saw almost 24% growth. Kantar reported that the total number of customers buying and renting across the video category grew by 14% between March and November to 12.9 million as audiences sought flexible access to content across transactional methods.
At the same time, SVOD continued its meteoric growth, up an astounding 42% in 2020. Streaming services now account for 74% of the total market value, with new services joining the market in 2020 such as Disney+, and an expansion in the uptake of existing services such as Netflix or Amazon Prime Video during the first lockdown period. Kantar also revealed that 23% of British households signed up to a subscription service during the first quarter — around the time Disney+ launched with a further 7% and 3.5% of households, respectively, doing so in the following two quarters of the year.
Driven by catalog titles, re-releases and select new titles, 30% of consumers bought packaged media (DVD, Blu-ray Disc and 4K UHD Blu-ray), up from 25% in 2019.
“The shift to digital doesn’t diminish the resilience of physical formats, though, as evidenced by the performance of TV and catalog content on disc, and by the strength of premium formats like Blu-ray and 4K UHD, both underlining that many viewers are still driven by collection and the access to the best possible home viewing experience that disc provides,” said Liz Bales, CEO of BASE.
Electronic Sellthrough
Electronic sellthrough ended 2020 with 27% growth in volume and 16% in value, with digital formats accounting for more than 43% of the transactional market. During the first 12-week lockdown period, the share of spend for digital film was 45% of the total £138.6 million retail disc and EST spend, up from 26% across the same period in 2019. This huge growth was largely retained after lockdown, with EST ending the year with 36% of spend, up from 26% in 2019.
Due in part to shifts in the new release slate, catalog content has grown its share of all film EST transactions from 49% to 56% in 2020, the catalog share is up 42% year on year, with positive growth every week since the first lockdown period.
VOD
The year saw title-level data on transactional video-on-demand activity become available for the first time from the Official Charts Company and based on data from digital retailers, delivering a view of consumer engagement with VOD services. VOD activity saw a period of rapid growth during the COVID-19 March lockdown, with an average of 600,000 rentals per week before lockdown rising to more than 1 million rentals a week after lockdown was implemented.
Digital rental’s popularity is now evident, with more than 30.8 million rental transactions made through October (Q4 data will be available in Q1 2021), a significant portion of the total 75 million pieces of content that have either been purchased or rented across disc, film EST and VOD.
The year also saw distributors adopt a test and trial approach to bring content to consumers with the likes of premium EST and premium VOD (PVOD). Kantar reports that 1.1 million shoppers have rented a PVOD title since March (with the ‘Premium’ element being classified as a rental price above £10), accounting for 6% of all digital rentals and 20% of total rental spend.
Proving the value in these high-definition disc formats, 2020 saw an increase in average selling price across the Blu-ray format, up 7.1% year-on-year to £15.94 ($21.75). Echoing its performance on other formats, catalog content has thrived on Blu-ray, remaining in positive growth and ending the year with a value of over £73 million ($99.5 million).
Consumers continued to show strong engagement with 4K Ultra High Definition, with sales up 20% year-on-year, and accounting for 23% of total Blu-ray sales. High value re-releases of catalog content thrived in 2020, with a vast array of classic content given the 4K UHD treatment. Total consumer spend topped £19.2 million ($26.2 million), which accounted for 73% of total 4K UHD spend.
Consumers have proven in 2020 that there is continuing demand to own classic catalog titles on premium disc formats, and with a huge treasure trove of content yet to receive re-releases, the 564 titles currently available on the 4K UHD format seems likely to keep rising entering 2021.
Television Content
TV content proved to be robust in the disc market, with 28% consumer spending, up from 23% in 2019. During the second and third quarter of 2020, with the flow of new-release movies impacted by national lockdown measures, TV content showed a growth of 5.4% to a 26% of consumer spend in this period.
Catalog TV content soared, with growth of 5.7% year-on-year surpassing £80 million ($109 million), with the category accounting for three of the top four best-selling TV titles of the year. Top-selling titles included Game of Thrones S8 (Warner Bros.), Chernobyl (Acorn Video by RLJ Entertainment), BBC Studios’ Doctor Who Classic Series Blu-ray Collections; Outlander S5 (Sony Pictures Home Entertainment); Downton Abbey the Complete Collection (Universal), and Gangs of London (Dazzler Media).
New releases such as The Crown S3 (Sony) and Gavin & Stacey: A Christmas Special (BBC Studios) also excelled, ending the year in third and seventh place, respectively, in the TV chart. BBC Studios’ newly commissioned animations of lost “Doctor Who” episodes, “The Faceless Ones” and “Fury from the Deep,” also performed well, contributing to combined sales across all content came at £4.9 million ($6.7 million), a 15% year-on-year growth from 2019.
Market Share
Disney ended the year as the leading distributor across combined disc and digital volume sales, with a 19.1% share, with Frozen 2 leading the way with 1.3 million units sold. Universal Pictures Home Entertainment continued its reign as the largest distributor across disc sales for both volume and value, remaining a full percentage point above the second-place distributor.
2021 Slate
Looking ahead to 2021, as the U.K. public cautiously anticipates the return to normality in a vaccinated post-pandemic world, so does home entertainment. With Tenet (Warner) performing strongly across digital and premium disc formats in the final weeks of 2020, and as the first major new release title to launch since the spring, consumer demand is clearly high, with a plethora of titles ready to perform across a diverse 2021 slate.
Pending releases include Minions: The Rise of Gru (Universal), Luca (Disney), Peter Rabbit 2: The Runaway (Sony), and Tom and Jerry (Warner). Other releases include James Corden’s musical take on Cinderella (Sony), and Everybody’s Talking About Jamie (Disney); superhero spinoffs and sequels with Disney’s Eternals and Black Widow, as well as Venom: Let There Be Carnage (Sony) and Warner’s Suicide Squad and Wonder Woman 1984; Antlers (Disney); Spiral (Lionsgate distributed by Elevation Sales) and Last Night in Soho (Universal).
Universal’s F9; Ghostbusters: Afterlife (Sony); A Quiet Place Part II (Paramount Pictures), Top Gun: Maverick (Paramount), Space Jam: A New Legacy (Warner), and No Time to Die (Universal).
“Amongst the many seismic changes in consumption habits that 2020 has seen, the most encouraging for home entertainment was the indication that subscription services and transactional formats can not only co-exist, but grow in tandem,” said Craig Armer, strategic insight director, Worldpanel Entertainment. “For the first time in at least 8 years, the number of buyers and renters of transactional formats grew, helped by a complete resurgence in the popularity of VOD. Encouraging levels of return for a second purchase amongst new consumers suggests habits being formed that should continue into 2021.”
