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U.K. Packaged Media Doubled Digital Revenue in 2014

16 Jun, 2015 By: Erik Gruenwedel

Electronic sellthrough and SVOD significantly narrowed digital gap

Sales of DVD and Blu-ray Disc movies and TV shows in the United Kingdom in 2014 showed resilience — topping 1.37 billion pounds ($2.1 billion) and more than doubling digital revenue at 600 million pounds ($938 million), according to data from IHS and Futuresource Consulting, respectively.

The U.K. home entertainment market, which is the third-largest in the world behind the United States and Japan, saw subscription streaming revenue from Netflix and Amazon Prime Instant Video more than double in 2014, accounting for more than half of total digital video spending at £350 million ($469 million).

Futuresource said a nearly 30% growth in transactional digital video was more impressive given the disappointing performance in 2013 and 2012. A notable driver included Sky Store’s “Buy & Keep” program, which includes a DVD in the mail with every digital purchase.

“[Last year] was a breakthrough year for EST in particular, as new and evolving services helped reach new customers. The total digital video market in 2015 is expected to continue its momentum, with anticipated growth of 40%, reaching £870 million ($1.36 billion),” David Sidebottom, senior marketing analyst at Futuresource, said in a statement.

Meanwhile, the juggernaut that is Netflix, in addition to Prime Instant Video and Now TV continued to grow demonstrably. At the end of 2014 there were more than 7 million subscribers collectively. This tally is projected to double to 13.6 million subs by 2019, with associated revenue topping £1 billion ($1.56 billion).

Futuresource estimates Netflix’s global sub base will reach 80 million by the end of 2016. This is about twice as big as any other pay-TV content provider except HBO, which it said is currently available in 114 million homes worldwide.

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