Subscription streaming continues to propel the US home entertainment market to new heights while sales of discs fell 19.5% and box office revenues fell more than 30% in 2021.
Post-corona growthLockdowns during corona in 2020 significantly lifted the home entertainment market in the US (and internationally) but even as people return to a more normal routine in 2021, consumer spending on home entertainment continues to increase. - "Overall U.S. consumer spending across digital and physical home entertainment formats in 2021 was $32.3 billion, an almost 8% increase from the $30 billion consumers spent in 2020, which was a record-breaking period for home viewing as consumers limited out-of-home activity in response to the spread of the novel coronavirus. In the fourth quarter, overall consumer spending rose more than 11 percent, to $8.6 billion, representing the strongest growth quarter of the year," said the Digital Entertainment Group (DEG).Subscription streaming revenue (Netflix, Disney+, HBO Max etc.) increased almost 20% to $25.27 billion in the US in 2021. Sales of digital movies online (iTunes, Vudu etc.) fell 19.2% to $2.42 billion while digital rentals fell 23.8% to $1.77 billion. Spending on premium VOD (PVOD) movies, such as premium-priced rentals or sales (iTunes, Vudu etc.) concurrent with the theatrical release or very soon after, are not currently included in the figures. The DEG estimates that PVOD spending in the US reached $525 million in 2021, excluding Disney+ Premier Access. Sales of DVD, Blu-ray and UHD Blu-ray discs declined 19.5% to $1.97 billion in the US in 2021 while disc rentals declined 21.2% to $883 million. However, consumer spending on UHD Blu-ray discs was actually up by more than 6% in the last quarter of 2021. Box office revenue in the US declined further to just $2.98 billion in 2021, down 30.2% from 2020 which was already a catastrophic year for movie theaters.
Sell-Thru packaged Sales of DVD, Blu-ray and UHD Blu-ray discs VOD Video-on-demand,
digital titles priced for rental
PVOD Premium video-on-demand,
rental or sales in an early home entertainment window
EST Electronic sell-through,
digital titles priced for sale
SVOD Subscription video-on-demand,
a monthly fee to access content, i.e. Netflix
Box office Revenue from ticket sales in theaters
Highlights from the report:
- With pandemic conditions improving as 2021 progressed, box-office spending on the titles released to the home in the fourth quarter jumped more than 1,100 percent from the year earlier period, demonstrating consumers’ continued voracious appetite for fresh feature films. The impact of new theatrical releases, which are historically a key driver of home entertainment spending, on DEG’s transactional home entertainment tracking was muted, however, by the fact that many high-profile titles were released to the home in a Premium window. Premium releases enjoy strong consumer interest but spending in this window was not reported through DEG in 2021. - Digital rentals (VOD) experienced a decline of less than 7 percent in the fourth quarter, their strongest performance of the year, supported by an increase in theatrical new release activity. Rentals of theatrical new releases through internet retailers (iVOD) in the fourth quarter rose about 3 percent over the same period in 2020, and 29 percent over spending in the pre- pandemic fourth quarter of 2019. - Fourth quarter digital purchases (EST) drove $717 million in consumer spending, down slightly from the record-breaking 2020 Q4 period. While theatrical trends are impacted by the lack of robust reporting for Premium transactions, purchases of TV product were particularly strong in Q4, rising to $258 million, an 11 percent increase above the same quarter in 2020, and 54 percent over the 2019 quarter. Demonstrating TV’s strength, Yellowstone Season 4 was the No. 1 title of the year across all transactional formats and the Yellowstone franchise generated more than $61 million in spending during the fourth quarter. - Premium releases – encompassing premium priced rental or sales transactions in an early home entertainment window prior to, concurrent with, or very soon after theatrical release –currently are not included in industry reporting through DEG. However, DEG market analysis based on input from DEG members, tracking sources and retailers/platforms estimates Premium release revenue through retailers who support multiple studios*** at about $525 million for full year 2021. Including Premium would increase the total consumer spend on digital formats to almost $33 billion. - In physical formats, the return of theatrical releases helped stem declines in the fourth quarter to only 14 percent and new formats remain a bright spot with consumer spending on 4K UHD Blu-ray discs rising more than 6 percent in the quarter. - Among the year’s best-performing titles across all transactional formats, excluding Premium, were TV, feature films, new release and catalog, including: The Croods: A New Age; F9: The Fast Saga; Free Guy; Godzilla vs Kong; Harry Potter - Complete 8-Film Collection; Hitman's Wife's Bodyguard; Monster Hunter; No Time to Die; A Quiet Place Part II; Venom: Let There Be Carnage; Wonder Woman 1984; and all four seasons of Yellowstone.