Study claims revenue from electronic home video to outstrip physical media by 2016


Amazon is one of the many streaming services now producing original content

Amazon is one of the many streaming services now producing original content

Interesting story in The Guardian and others the last week: as  PricewaterhouseCoopers (PwC) released a study that declared that the market for DVDs and Blu-ray continues to decline, although on-demand streaming services like Netflix  continue to generate revenues which will see e-media revenues exceed those of the cinema box office in the coming years.

The study says that revenues from streaming and downloading films will outstrip physical media as soon as 2016, with the market for physical media dropping from $12.2bn now to $8.7bn by 2018. By 2017 electronic home video will overtake traditional cinema as the biggest contributor to total film revenues in the US, reaching a total of $17bn the following year – double the $8.5bn now.

However a night out at the traditional cinema is not about to disappear, in fact PwC predict a 16% increase in ticket sales over the next five years. "People still want to go to the movies, especially the big tentpole films," said Cindy McKenzie, managing director of PwC's entertainment, media and communications arm. She also pointed to the cheap and easy distribution allowed by digital media as being a major cost saving for theatrical releases. 

Netflix, Amazon Instant Video and the popular US streaming service Hulu are not only expanding their reach, but are now moving into funding and producing original content, with shows like House of Cards, Orange is the New Black and Arrested Development. Netflix has seen rapid revenue increases, 24% in the first quarter of 2014.

Downloads of films are still growing (at a lower pace than streaming) and topped $1bn in revenue for the first time last year, driven in part by high-quality downloads becoming available before physical and streamed versions.



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Owen Van Spall

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