Streaming video subscriptions drive industry rise
05:00 AM, Jan 13, 2014
Hooray for Hollywood home video sales rose for the second year in a row in 2013, with spending on movies and TV episodes downloaded digitally surpassing $1 billion for the first time.
Total consumer spending on home video digital sales and rentals, and physical movie discs topped $18.2 billion, according to two separate industry reports, one due out Tuesday from research firm IHS and one last week by the Digital Entertainment Group at CES 2014 in Las Vegas.
Digital sales of video content rose nearly 50% to more than $1 billion. Overall digital spending rose 17%, the DEG says.
Meanwhile, spending on streaming subscriptions and Internet video-on-demand both rose more than 30% compared with 2012, IHS says.
Overall sales of physical discs continued to decline. Spending on Blu-ray discs rose 2.6% to $2.2 billion but that was not enough to offset declining DVD sales of $5.2 billion, down nearly 14%, IHS says. Physical rentals also dropped 9% to $4.3 billion.
Still, with new video delivery services from Comcast and Target and the arrival of Microsoft’s Xbox One and Sony’s PlayStation 4, each of which offers movies and TV sales and rentals, “there’s lots of services and platforms people are excited about,” said DEG President Amy Jo Smith.
The two-year increase in home entertainment spending comes after a seven-year decline as DVD sales and rentals cooled and Blu-ray Disc began a slow buildup.
The consumer embrace of electronic video sales suggests that 2014 could result in another solid year for studios, says Tom Adams, IHS U.S. media research director. IHS estimated Hollywood’s revenue to be $18.3 billion for 2013, up 0.7% over 2012 ($18.2 billion).
Consumers like digital downloads because delivery has become “faster and cheaper,” but, he adds that it had “better always work.”
Studios are also benefiting from competition for video streaming rights, Adams says, and consumer interest in streaming video is expected to grow, “with tablet penetration going through the roof. (Tablets are) the personal, portable TV we’ve all been waiting for.”
Among the top-selling movies in 2013: Despicable Me 2;Twilight Saga: Breaking Dawn - Part 2; The Hobbit: An Unexpected Journey;Wreck-It Ralph;Skyfall;Star Trek Into Darkness;Monsters University;Iron Man 3;Man of Steel; and The Croods.