SVOD the star of struggling US home entertainment industry in 2016

By Jim O'Neill on Jan 09 2017 at 11:15 AM
SVOD the star of struggling US home entertainment industry in 2016

Some good news for the home entertainment industry – depending upon which segment of the industry you’re part of: Consumers spent nearly $18.3 billion in 2016, a 2% increase from 2015.

Subscription streaming services were the stars in 2016’s numbers, with revenues growing some 23% to $6.23 billion in consumer spending, industry group Digital Entertainment Group reported. It was the first time that streaming revenues outpaced higher-margin video disc sales, which came in at $5.4 billion.

Hollywood also saw some light at the end of the tunnel in the form of VOD rentals, up 5% in 2016 to $2.1 billion after being off 3% in 2015. That gap could be even larger when Amazon Prime Instant Video’s subscription revenues are factored into the total, something that didn’t happen this year, DEG said.

After years of strong growth, meanwhile, online sales of video from etailers like Amazon and iTunes slowed significantly, although they remained up about 5%. That segment saw 18% and 30% growth respectively in 2015 and 2014. Electronic sell through (EST) globally has shown softness as consumers have found more premium content available sooner on SVOD services.

But revenues from movie and TV show sales and rentals were down 7% from a year ago to $12 billion.

The biggest loser (no surprise here) was physical rentals, down 18% to $2.47 billion. Sales of DVDs and Blu-ray discs fell to $5.49 billion, nearly 10% less than in 2015.

That’s putting more pressure of Hollywood to find new sources of revenue, especially as theater attendance continues to be flat at best.

The bottom line: Viewers are increasingly moving online for their video entertainment, a move that likely will increase the number of mergers and partnerships between operators and content providers, like AT&T’s efforts to acquire Time Warner. The declining revenue trends for traditional distribution likely also will prompt studios to weigh changes – likely shortening – to the current theatrical windowing norms.

Stay tuned.

Follow me on Twitter @JimONeillMedia and on LinkedIn


SVOD, Content, Live sports
Original content, sports to push SVOD revenue to $120B by 2022
Dec 13 2017 9:00 AM

New research posits that global revenue from subscription video on-demand (SVOD) will increase 88% to more than $120 billion in 2022, up from an estimated $64 billion this year.

The report from Juniper Research also says more than 25% of all global households will have at least one SVDO subscription in five years.

LatAM, SVOD, Mobile
Latin America seeing golden age of TV in form of SVOD
Aug 22 2017 7:30 AM

Globally, subscription video on-demand (SVOD) is on a rocket trajectory and Latin America is deeply in the mix. While Netflix, Amazon and Hulu have been the leaders of subscription video on-demand growth, an increasing array of subscription services – there are more than 100 in the U.S. and Canada alone – are seeing fast subscriber growth and adoption across demographic groups.

SVOD, Pay TV, Millennials, Cord Cutting
Q2 likely to be miserable as operators brace for big customer losses; OTT anyone?
Jul 24 2017 3:00 PM

Could second quarter pay-TV subscriber losses in the United States top 1 million, the highest figure ever? In a word, yes.

The second quarter routinely is a weak one for operators and in the current environment – remember the first quarter saw more than 800,000 subscribers cut the cord, according to Kagan – reaching one million may be an easy task.

SVOD, Operators, Netflix
Should European operators worry about cord cutting as Amazon, Netflix push deeper into their market? Absolutely
May 25 2017 8:15 AM

When the Big Two come to play in your backyard, it’s time to up your game.

Netflix and Amazon have launched a push into Europe that will likely result in some bad nights of sleep for operators, pay-TV channels and broadcasters looking themselves to do more business over the top.