BASE: Packaged Media Helps Up 2019 U.K. Home Entertainment Retail Market 9.5%

To paraphrase Mark Twain, “the reports of [the death of packaged media] are greatly exaggerated” — in the United Kingdom anyway.

Sales of DVD, Blu-ray Disc, 4K UHD Blu-ray and electronic sellthrough movies and TV shows in the world’s No. 2 home entertainment market generated more than £891 million ($1.2 billion) in 2019, according to year-end data compiled by the British Association for Screen Entertainment (BASE) and culled from statistics originating within the Official Charts Co. and Futuresource Consulting.

About 54% of the 2019 transactional revenue came from packaged media, underlining that where content ownership is concerned, the disc is still the preferred choice for many consumers. In fact, 42% of consumers who made a physical transaction within the past 12 months did so to add to a collection, 43% bought to give as a gift, and 46% bought so they could re-watch on multiple occasions.

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The top-selling disc in 2019 was Disney-owned 20th Century Fox Home Entertainment’s Bohemian Rhapsody, with the Oscar winner selling more than 1.7 million units across physical and digital formats. The success of the Freddie Mercury biopic came on the heels of Fox’s 2018 chart topper, The Greatest Showman, which itself continued to perform strongly in 2019, selling an additional 468,000 copies across all formats (giving it total sales of more than 3.1 million copies). Warner Bros. Home Entertainment’s A Star Is Born followed up with 702,000 copies sold.

“Consumer appetite for paid-for digital video continued its impressive momentum in 2019,” David Sidebottom, principal analyst of entertainment at Futuresource Consulting, said in a statement. “Both EST and [transactional VOD] grew once again, albeit at a lower rate than previously after an incredibly strong 2018 performance. SVOD goes from strength to strength, as the new wave of SVOD service heralds the next era of digital video, as we enter 2020.”

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Indeed, subscription streaming video — driven by Netflix and Amazon Prime Video — helped grow overall home entertainment revenue 9.5% to £2.6 billion ($3.4 billion) from £2.37 billion ($3.1 billion) in 2018. SVOD accounted for nearly 66% of total revenue.

The picture is far from black and white, however, with nearly 40% of SVOD subscribers also transacting on physical or digital formats, as well as the 7.2 million consumers without over-the-top video subscriptions.

BASE said a proliferation of consumption models, including physical media and digital consumption at home and on the move, means that access to home entertainment content is more pervasive than ever before.

With SVOD now an entrenched layer of the home entertainment industry, it not only provides a diversity of choice for consumers, but also serves as a launchpad for high-quality original content that then goes on to reach an even wider audience via transactional formats.

“In a year that has seen consolidation between studios and independent distributors alike, the reality is that consumption habits are changing and are likely to continue to do so, with the debut of services like Disney+, Peacock and HBO Max all likely to further [drive] that change,” BASE CEO Liz Bales said.

The executive reiterated that content ownership — especially locally produced — remains of significant value to many consumers.

“Opportunity often comes from change, as evidenced by the U.K. production boom, and so we look to 2020 with excitement and a wealth of content and delivery well-equipped to meet evolving audience needs,” she said.

Blu-ray accounted for 27% of the disc market share, up from 24.3% in 2018. BASE contends the enduring appeal of disc is underscored by consumers’ investment in higher-end hardware and utilizing the Blu-ray and 4K UHD capabilities of games consoles.

The trade group said the average selling price across the Blu-ray format increased 4.7% to £14.88. Within the Blu-ray format, 4K UHD now represents 16.3% of the Blu-ray market, and a total of 4.3% of the overall disc market. There are more than 450 4K UHD Blu-ray titles available.

At the same time, EST grew 4.5% in sales volume and 3.5% retail value suggests that the digital revolution that has taken place in recent years is increasingly permeating the choices consumers are making for owned media too, with increasing numbers of consumers opting to grow their digital collections as well.

Among the Top 10 titles of 2019, digital purchase accounted for 33% of copies sold, with Bohemian Rhapsody and Disney/Marvel’s Avengers: Endgame selling in excess of half a million combined digital copies. All of the EST Top 10, including Toy Story 4 and Sony Pictures Home Entertainment’s Venom sold in excess of 175,000 units each.

Among studios, Disney led with 18.6% market share across all formats, and driven by Toy Story 4 (827,000 copies), Mary Poppins Returns (751,000 copies), Ralph Breaks the Internet (360,000 copies), Aladdin (637,000 copies), The Lion King (679,000 copies) and Dumbo (392,000 copies).

Avengers: Endgame sold more than 1.33 million copies to land at second place on the combined chart; Captain Marvel (638,000 copies), and catalog title Avengers: Infinity War (351,000 copies) also featured in the best-selling titles of the year.

Universal Pictures Home Entertainment continued its reign as the largest disc distributor based on volume driven by its studio slate, Paramount Pictures, DreamWorks and Entertainment One.

Rocketman came out on top as Paramount’s best-selling disc title in 2019; Danny Boyle’s Beatles-inspired Yesterday performed well; and even outside of its new release window, Mamma Mia! Here We Go Again became Universal’s fourth-best-selling title in 2019. Returning franchises, including How To Train Your Dragon: Hidden World, Johnny English Strikes Again and The Secret Life of Pets 2 saw strong sales, while spinoffs and remakes, including Bumblebee and The Grinch, also boosted the studio’s market share.

Other top-selling titles included Fantastic Beasts: The Crimes of Grindelwald (Warner), which sold more than 662,000 copies including boxed sets, while Venom (Sony) ended the year in eighth place on the combined chart with sales of 653,000.

In the TV content, Game of Thrones: The Complete Eighth Season (Warner) sold more than 192,000 copies in the final four weeks of the year, topping the TV title chart and landing in the top 10 chart for consumer spend on disc, and also helping the “Thrones” catalog secure the title of best-selling TV franchise of 2019.

“Chernobyl” (Acorn Video by RLJ Entertainment) saw sales of 116,000 units, making it the second-highest-selling TV title of the year. BBC Studios continued to see franchise success with “Peaky Blinders” as well as both the new and classic series of “Doctor Who,” the latter of which ranked as the second-highest-selling TV franchise of the year.

U.K. consumer fascination with the Royal Family continued by another year of strong sales for seasons one and two of “The Crown” (Sony Pictures Home Entertainment) at number four on the TV chart, as well as “The Crown” franchise placing at number four in the TV franchise chart based on volume.

This continued success of TV content launched and accessible via streaming and catch-up services signposts the considerable consumer appetite to own SVOD-driven series on physical formats, also demonstrated by the success of Good Omens (BBC Studios) which landed at number 11 on the TV chart.

Despite the successes of standout titles, the final six months of 2019 saw a significantly reduced release slate, mirroring the smaller theatrical releases seen at the start of the year. BASE expects the 2020 slate to help redress the imbalance from 2019.

A raft of family films, including Frozen 2 (Disney), Minions: The Rise of Gru (Universal), Peter Rabbit 2: The Runaway (Sony) and The Secret Garden (StudioCanal distributed by Elevation Sales) are set to entertain. The U.K.’s unwavering appetite for musical drama will be sated by Lionsgate’s Military Wives and Universal’s Cats; superhero spinoffs and sequels are also aplenty, starting the year with Joker (Warner), followed by Black Widow (Disney), Venom 2 (Sony) and Wonder Woman 1984 (Warner); Disney/Lucasfilm’s Star Wars: The Rise of Skywalker and James Bond actioner No Time to Die (Universal).

“We know that audiences find enormous value in our content and the first half of 2020, packed with diverse new IP as well as must-see franchise titles, should serve as the perfect reminder that in a market of consumers hungry for content, there’s plenty of room for those able to adapt,” said Kevin Dersley, co-vice chair of BASE and managing director of Elevation Sales.

Amazon Prime Video Expands Live Sports Programming with BT TV Distribution Deal

Amazon Prime Video, unlike Netflix, Hulu, Apple TV+ and Disney+, continues to embrace live sports programming. Prime streams NFL Thursday Night Football, in addition to select Major League Baseball games.

Now in the United Kingdom, Prime Video has struck a distribution deal with online BT TV service in time for Premier League soccer.

New and renewing BT TV subscribers will get free six-month access to Prime Video, which includes Amazon’s first live streaming of England’s top professional soccer league.

Prime Video, beginning Dec. 3, will live-stream 20 Premier League matches, in addition to the UEFA Champions League and Emirates FA Cup football.

Original Prime Video programming includes: “Tom Clancy’s Jack Ryan,” “The Boys,” “The Grand Tour,” “The Marvelous Mrs. Maisel,” “Carnival Row” and “Good Omens”.

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“With six months Amazon Prime Video on us offering access to even more Premier League matches, all in one place with integrated search and one simple bill — there’s never been a better time to be on BT TV,” Pete Oliver, managing director of marketing, BT Consumer, said in a statement. “Prime Video also offers great TV and film, so there really is something for everyone this festive season.”

Netflix Gets New ‘Aardman’ Movie

Netflix has secured exclusive rights to animated holiday movie Robin Robin from Aardman Studios, the production company responsible for Oscar-winning Wallace & Gromit and Shawn the Sheep.

The 30-minute musical tells the story of a baby robin redbreast named Robin who, after hatching in a rubbish dump, is raised by a loving family of mice. As she grows up, her differences become more apparent.

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“When we [got] the concept for Robin Robin, we knew instantly that this was a rare and special project that we had to make together” Sarah Cox, executive creative director at Aardman, said in a statement.

Robin Robin is currently in production at Aardman’s facility in the United Kingdom and will debut on Netflix for the holidays in 2020.

Aardman’s move to Netflix from U.K. distributor BBC reportedly involved money and global distribution.

“Netflix has the ability to buy for the whole world rather than just the U.K.,” director Sean Clarke told The Guardian. “Everything we’ve done [in the past] has been done with the BBC, but BBC budgets are under pressure. The last one we did was probably four or five years ago. The BBC would have loved to have taken Robin Robin. But they weren’t in a position to afford it.”

Alexi Wheeler, manager of kids and family international originals at Netflix, said the SVOD behemoth plans to introduce the Aardman brand to “new generations of families” around the world.

“The craft of stop motion animation through Robin Robin … warms the heart and can be enjoyed by the whole family,” Wheeler said.

PBS America Launching for Free in the U.K.

PBS America is set to debut for the first time on ad-supported Freeview in the United Kingdom, beginning Nov. 20.

The deal expands the PBS America channel reach to about 6 million homes, since launching in the U.K. in 2011. It is also available on Sky, Amazon Prime Video, Virgin, My5 and Freesat.

“For the first time since launch we will be available in all homes across the U.K.,” GM Richard Kingsbury said in a statement. “Our PBS supply line means that we are bringing our audience fresh stories whilst PBS values mean that the programming has the kind of depth and tone that many Freeview viewers appreciate.”

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PBS is home to Nova science and technology programming; “Frontline” news and investigative shows; in addition to The Vietnam War, from Ken Burns and Lynn Novick.

Amazon Inks U.K. Streaming Deal With Lionsgate

Amazon has struck a new deal with Lionsgate to be the U.K.’s first-window streaming home to the studio’s recently released and upcoming theatrical feature films.

The multiyear deal, which begins Jan. 1, will enable Prime members in the United Kingdom, or those subscribing to the monthly standalone Prime Video service offer, to access such Lionsgate hits titles as Angel Has Fallen, Rambo: Last Blood and Lionsgate U.K.’s The Personal History of David Copperfield. The agreement also encompasses upcoming Lionsgate films such as the Knives Out, the action epic Midway and Bombshell.

“We’re excited to be bringing Lionsgate’s slate of compelling movies to Prime Video,” Martin Backlund, head of content U.K. for Prime Video, said in a statement. “Our customers will be delighted that Lionsgate’s Hollywood and British blockbuster movies are coming to Prime Video.”

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“We’re delighted to expand our longstanding relationship with Amazon to bring our films to their Prime Video service in the U.K.,” Lionsgate president of worldwide television and digital distribution Jim Packer said in a statement. “It is a great new collaboration with an important content partner in the worldwide arena, underscoring the breadth and depth of the Lionsgate slate.”

Ad-Supported VOD Service Tubi Launching Kids Platform, Service in U.K.

Tubi, the San Francisco-based ad-supported video-on-demand service, Oct. 14 announced it would launch ‘Tubi Kids’ Oct. 21 in the United States, in addition to service operations in the United Kingdom in 2020.

The AVOD made the announcements during a keynote address at MIPCOM in Cannes, France.

Tubi Kids will feature a library of content featuring more than 1,200 age-appropriate movies and television shows or 5,000+ hours of content in a dedicated section built just for families.

In November the platform will include movies How to Train Your Dragon, Norm of the North, and Teenage Mutant Ninja Turtles: Out of the Shadows, alongside series featuring characters Sonic the Hedgehog, Strawberry Shortcake, Paddington Bear and The Wiggles, among others.

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“The launch of Tubi Kids reinforces our dedication to offer an age-appropriate viewing environment — super-serving kids and families with a robust amount of content,” CEO Farhad Massoudi said in a statement.

Tubi said it streamed more than 132 million hours of content in September — a 40% increase in four months.

New titles currently available include Megamind, starring Will Ferrell and Tina Fey, Scary Movie 1 and 2, starring Marlon Wayans and Anna Faris, the Academy Award-winner No Country for Old Men, directed by Joel & Ethan Cohen, and the 13th season of the reality TV series “The Bachelorette.”

Massoudi said the U.K. launch would be the first of several forthcoming international territories for the AVOD service.

“[We] look forward to announcing them soon,” he said.

 

BritBox Ups Distribution Partners in the U.K.

BritBox, the subscription streaming video service launched in the United States by the BBC and ITV and now “imported” to the United Kingdom, has expanded distribution in the latter region

In addition to agreements with ad-supported VOD service Freeview Play and YouView set-top boxes, BritBox has inked a deal with Samsung to be included on its line of connected Tizen televisions.

The service, which has about 650,000 subscribers in North America, is also available on the Web, Apple iOS and Android devices.

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“We have an ongoing commitment to provide the greatest experience to our customers, including offering the best range of apps currently available,” Guy Kinnell, VP of TV & AV Samsung Electronics U.K., said in a statement. “BritBox provides a new way to access the best of British content exactly whenever they want.”

Freeview Play, which has more than 5 million monthly users, has U.K. distribution through Sony, Digihome, JVC, Logik, Luxor, Polaroid, Techwood and Toshiba.

“Our viewers love great British TV, so BritBox is a fantastic addition to the Freeview line up, providing extra options to top up on the best of free TV they already enjoy via the nation’s biggest TV platform,” said Owen Jenkinson, marketing director at Freeview.

YouView set-top boxes will also be hosting the BritBox app by the end of 2019, making the new streaming service accessible to millions of additional households across the nation.

“At a time when U.K. produced television is going from strength to strength, BritBox brings a fantastic array of U.K. television, to compliment the SVOD services already available via YouView, which our users will love,” added Susie Buckridge, CEO of YouView.

 

 

Hastings: Netflix Girding for ‘Whole New World in November’

With a slew of new subscription streaming video services launching soon, including Apple TV+ and Disney+ in November, and NBC Universal’s Peacock and WarnerMedia’s HBO Max early next year, market behemoth Netflix is preparing for battle.

Speaking Sept. 20 at the Royal Television Society confab in Cambridge, in the United Kingdom, Netflix CEO Reed Hastings told attendees the SVOD pioneer has spent $500 million (£400 million) on original content production in the region this year with plans to increase the amount next year.

Over the summer, Netflix leased Pinewood Studios’ Shepperton facility — a move later emulated by Disney for Pinewood’s Buckinghamshire facility near London.

Reed Hastings

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Netflix’s forthcoming comic book-based action movie, The Old Guard, starring Oscar winners Charlize Theron, Chiwetel Ejiofor and KiKi Layne, among others, was filmed at Shepperton.

“While we’ve been competing with many people in the last decade, it’s a whole new world starting in November,” Hastings said, as first reported by Variety. “It’ll be tough competition. Direct-to-consumer will have a lot of choice.”

Hastings said Netflix was not interested in acquiring production facilities globally, preferring to rent as market conditions dictate.

He said the increased SVOD competition worldwide (Disney+, Hulu, Apple TV+ all have global aspirations), including Amazon Prime Video have upped production costs exponentially.

“Someday ‘The Crown’ will look like a [fiscal] bargain,” he said.

Hastings added that as SVOD and ad-supported streaming proliferate worldwide, traditional pay-TV still dominates consumer viewing habits.

“We win only about 5% of television viewing hours, so we’re nowhere near a concentration risk [to pay-TV],” he said.

Comcast’s Sky Studios Bowing Production Facilities in the U.S.

With media companies scrambling to create localized content worldwide, Comcast-owned Sky Studios in the United Kingdom reportedly is launching production hubs in New York and Knoxville, Tenn.

Dubbed The Hive, the facilities will cater to Sky Studios and third-party companies offering myriad production services, including casting, gear, wardrobe, set design, transcription, media management and staffing, among other services,” according to Deadline.com, which first reported the move.

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The facilities will be headed by Comcast subsidiary Jupiter Entertainment and its former senior executive Robert Twilley. At Jupiter, Twilley managed production and business for more than 75 series.

Robert Twilley

“Launching The Hive is the next step in our ambition to make Sky Studios a world-leading creative and production force and home to the industry’s best talent,” Jane Millichip, chief commercial officer at Sky Studios, said in a statement.

Jane Millichip

Sky Studios, which produced the acclaimed “Chernobyl” mini-series for HBO, has more than 50 shows in production globally.

Millichip says the expanded production hubs in the U.S. will expedite “great ideas and unique stories” into production sooner.

“Under Robert’s leadership, The Hive will quickly become a vital resource for the industry with ambitious plans for expansion,” she said.

Women in Home Entertainment 2019: A Q&A With BASE CEO Liz Bales

The British Association for Screen Entertainment’s mission statement seeks to champion the growth of screen entertainment across a £2.34 billion U.K. disc and digital video market, while maintaining a business environment with few regulatory burdens.

U.S. studio members include Sony Pictures Home Entertainment, 20th Century Fox Home Entertainment, Lionsgate U.K., Paramount Pictures, Universal Pictures International Entertainment, The Walt Disney Co., and Warner Home Entertainment.

As CEO of BASE and Industry Trust for IP Awareness, Liz Bales has headed the trade group since 2014. A commercial lawyer by trade in the acquisition, exploitation and protection of intellectual property, Bales also leads The Digital Entertainment Group Europe.

Bales is recognized for leadership and creation of partnerships and executing targeted initiatives to grow audience engagement, deliver industrywide behavior change and incubate innovation in established trading environments.

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With a successful track record supporting diverse stakeholders on complex challenges with a focus on measurable results and sustainable solutions as well as delivering efficiencies, Media Play News asked Bales about ongoing cyclical change across the world’s No. 2 home video market.

MPN: At the end of 2018, you cited ongoing “high street retail” challenges in packaged media while attempting to accommodate a “broad variety” of home entertainment content and format options. How have those challenges been met through the first half of 2019?

Bales: The home entertainment category has been effectively managing change for over a decade, and in 2019 we are meeting ongoing challenges head on. BASE is driving physical retail innovation in collaboration with a leading U.K. grocer and alongside industry experts, leading ground-breaking trials with exceptional indicative results at an early stage. Focusing on digital formats, the cross-platform ‘Mega Movie Week’ campaign resulted in the U.K.’s largest week of sales for digital ownership on record, topping 1 millionm units with the highest reported incredibly strong new user activation from a host of the participating platforms.

MPN: The U.S. home entertainment market is now 60% subscription streaming video, led by Netflix, Amazon Prime Video and Hulu. Yet, consumption of packaged media continues (albeit slowly) while increasingly dwarfed by digital. The trend appears similar in the United Kingdom. How are BASE members adjusting their marketing approaches?

Bales: The rapid evolution of technology is a dominant force, and home entertainment is just one of a plethora of categories taking advantage of the benefits. Ultimately this evolution is about the consumer, whose love of and engagement with content in all forms is enduring and still showing huge growth; the home entertainment category value is up 10% in the last year. An established U.K. production base sees the welcome addition of bold new players, which is a huge positive for both our creative industry and U.K. audiences and while format fragmentation is obviously not without its challenges, the industry is proactive in its response, as witnessed by the remodeling being seen across the distribution landscape.

MPN: How does BASE convince consumers to purchase rather than subscribe to media? Can both distribution models co-exist?

Bales: BASE runs a variety of initiatives that focus on informing the consumer on the benefits of the various formats including ownership, rental and subscription. There is a broad range of different needs and spaces in which consumers consume entertainment content, and clear areas where transactional purchase has natural advantages over subscription and vice versa. As long as consumers are made aware of the myriad benefits of ownership across all formats, then both distribution models can continue to co-exist and meet the differing needs of a range of audience types.

MPN: With Disney’s acquisition of 20th Century Fox, complete ownership of Hulu and pending launch of a branded subscription streaming service — the latter two likely earmarked for the U.K. — how does traditional home entertainment retail compete?

Bales: Traditional home entertainment retail has already been competing with subscription streaming services for over a decade and Disney is one of a number of entities that will launch direct-to-consumer services in the coming months and years. The response from traditional home entertainment is of course insight led; gaining an understanding of audience behavioral trends and consequent engagement is a high priority. We know that consumers view content from multiple formats, and fans of film and TV have a range of choices; to visit the cinema, buy the latest content digitally or on disc as well as streaming exclusive content from subscription services.

Customers love choice and across the category content owners provide just that. With all of the current and future developments in the home entertainment business, it is imperative that we consider any possible impact on copyright infringement; the category as a whole must work together to ensure that the customer experience comes first, and ensure clarity and simplicity when it comes to accessing content easily and legally even as habits evolve.

The consumer will ultimately vote with their wallet and define the success of new services, but all evidence points to transaction and ownership continuing to be a desired option for many.

MPN: With studios and media companies increasingly focusing on subscription and ad-supported VOD, it would appear BASE has to wear multiple hats to satisfy industry members. Is that true? If so, how has that changed the internal focus at BASE?

Bales: Navigating change has been a constant for many years, the pace of which only escalates. Members have always looked to the organization for a comprehensive category level understanding of current market performance, but now increasingly look to us for a view on future challenges and opportunities.

Ultimately, home entertainment is one part of an expansive and interconnected value chain, and to genuinely add value for members our expertise in home entertainment has to be complemented with a thorough knowledge of surrounding sectors, not only subscription and ad–supported VOD, but extending to theatrical distribution and broadcast.

This is quite a task, but it is one that makes for dynamic and exciting roles within the team and is a challenge the organization has risen to with a passion.

Click here for the 2019 list of Women in Home Entertainment