SVOD Contributed to 1% Rise in Consumer Home Entertainment Spending in 2015, DEG Reports

6 Jan, 2016 By: Thomas K. Arnold

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Driven by huge gains in OTT subscription streaming, chiefly Netflix, consumer spending on home entertainment in 2015 topped $18 billion, inching up 1% from 2014, according to preliminary estimates from DEG: The Digital Entertainment Group.

Subscription streaming of movies and TV shows generated consumer spending of more than $5 billion, a 25% gain from 2014.

Also posting double-digit gains was electronic sellthrough, which according to DEG generated $1.9 billion in consumer spending, up 18.1% from the $1.6 billion DEG estimates it generated in 2014. Studios are pushing the sale of digital downloads due to their high margins; to encourage sales, most new titles are available digitally two or three weeks before they are released on disc.

Disc sales, not surprisingly, continued to decline, falling 12% during 2015 to come in at $6.1 billion. The packaged-media business fared surprisingly well during the fourth-quarter holiday season, however, with combined sales of Blu-ray Discs and DVDs off less than 7.9%, the smallest decline of the year’s four quarters. The DEG notes that this decline was driven by DVD; Blu-ray Disc sales were actually up 8% in the three-month period between Oct. 1 and Dec. 31, 2015.

Total consumer spending on digital — streaming, sales and video-on-demand (VOD) — came in at an estimated $8.9 billion, a 16.4% increase from 2014, DEG reported.

In its year-end summary, DEG — whose data is derived from member studios, consumer electronics manufacturers and others — noted that HDTV penetration is now at more than 114 million U.S. households, while 104 million U.S. households have at least one Blu-ray Disc playback device.

Several tech publications and websites have said that in addition to playing high-definition discs, Blu-ray Disc players double as the best streaming devices.

DEG also said consumer sales of 4K Ultra HD TVs increased 287% in the fourth quarter of 2015. Household penetration is now at more than 5 million U.S. households.

DEG said that among the year’s top-performing titles in both physical and digital formats are Big Hero 6, Inside Out and Avengers: Age of Ultron from Walt Disney Studios; Star Wars: The Digital Movie Collection from Walt Disney Studios and 20th Century Fox Home Entertainment; Jurassic World, Furious 7 and Fifty Shades of Grey from Universal Pictures Home Entertainment; The Equalizer and Fury from Sony Pictures Home Entertainment; Gone Girl from 20th Century Fox; American Sniper and The Hobbit: The Battle of the Five Armies from Warner Bros. Home Entertainment; Interstellar from Paramount Home Media Distribution; The Hunger Games: Mockingjay — Part 1 from Lionsgate; and Home, a DreamWorks Animation title distributed on home video by 20th Century Fox.

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