Sales of physical discs continue to fall drastically as cinema and subscription streaming drive global growth for Hollywood. Revenue from streaming may soon overtake cinema.
Hollywood is growing
Consumers spend more money purchasing and renting video entertainment at home in the living room than in the cinema but there is also more choice. The home entertainment segment makes up 54% of global Hollywood revenue, according to the annual report by MPAA.
Subscription streaming is growing rapidly. From 2013 to 2017, revenue from streaming has grown 161%. Revenue from physical discs (purchase and rental) on the other hand continues to suffer as it has fallen almost 50% during the same period. In the report MPAA declares that Hollywood “overcame a decline in physical home entertainment”.
- ”Since 2013, global theatrical consumer spending has increased 13 percent, while home entertainment has increased 14 percent. Digital home entertainment growth (+161%) overcame a decline in physical home entertainment,” the report said.
Consumers worldwide spent a total of 88.4 billion dollars on Hollywood content last year.
Streaming may soon be biggest contributor
Exhibitors continue to hold a hand under the Hollywood industry but annual Box Office revenue in the US has been flat since 2013. Growth in theatrical revenue comes from international markets.
Revenue from subscription streaming continues to grow at an impressive rate, and if these kinds of growth rates continue streaming will be the single biggest revenue contributor by 2018 or 2019.
- "With more stories and more storytelling mediums than ever, our industry continues to adapt to an ever changing world,” said Charles H. Rivkin, Chairman and CEO, MPAA.
From 2016 to 2017 the number of streaming subscription plans grew almost 110 million to hit 450 million, and MPAA expects growth to continue. For comparison, there are 565 million cable TV subscriptions worldwide (satellite, IP, and DTT not included).
The music industry was hit hard during the transition from physical to online distribution but MPAA’s report seems to suggest that the movie industry will transition mostly smoothly. In recent years, players such as Amazon and Netflix have entered the arena and are increasing their content budgets every year. Apple is also expected to emerge as a key player in the near future.