(Marvel Studios / Disney via AP)
AP
It’s a boom time for Hollywood studios’ home entertainment divisions, with sales up nearly a third over two years ago and even declining sectors enjoying revitalized consumer access during the pandemic, according to Half-Year Data from Digital Entertainment Group. And perhaps no corner of the business is booming as strongly as the area that the studios do not report on, premium video-on-demand and what is known as early access electronic sell-through.
“These numbers are not included. Our estimates assume that consumer spending of $ 1 billion is not included in the numbers you presented, ”said Michael Bonner, President of Comcast CMCSA-owned Universal Home Entertainment and board member of DEG, who spoke during the Mid-Year Expo the trade organization made comments on Tuesday.
Even without those numbers, the sector has caught on in almost every corner as consumers are looking for even older feature films and episodic series that they don’t have to go to the cinema for, said Judith McCourt, a data analyst who regularly compiles industry statistics at DEG.
The sector generated revenue of $ 15.7 billion in the first half of the year, up 5.2 percent from the record-breaking first half of 2020, McCourt said. Compared to 2019, sales in the industry increased by 32 percent.
“What happened to the pandemic really has a lasting impact,” said McCourt. “We are also seeing growth (record 2020). Back in 2019 the growth is even more extraordinary. ”
Even in the second quarter of 2021, when the economy opened up and lots of people traveled or otherwise found ways to regain some normalcy, “they still find time to watch,” McCourt said. “It’s really remarkable because there really weren’t a lot of new theater products to see.”
Expo spokespersons said the lack of new theatrical offerings slowed overall growth as the attention paid to these big new films helps attract fans. Streaming dominated total revenue while other distribution channels generated approximately $ 2 billion in additional revenue, McCourt said.
Their numbers do not include advertising revenue from free services like Pluto, IMDb TV, and Tubi, nor the unreported premium VOD revenue. Bonner’s comment, which he did not reinforce, is one of the first in which a great studio manager publicly dares to estimate the value of the PVOD sector to Hollywood.
Such PVOD revenue has come into the spotlight in recent weeks after Disney reported DIS “more than $ 60 million” to PVOD from its latest Marvel film, Black Widow. Only Disney Plus subscribers willing to pay an additional $ 30 had early access to Black Widow.
Two weeks later, after the film suffered a two-thirds drop in box office gross, star Scarlet Johansson filed a lawsuit blaming Disney’s PVOD program for cannibalizing box office receipts, which would have added significantly to her back-end salary for the film. After about a month of theatrical release, the film grossed a relatively meager $ 360 million in gross global revenues.
Other studios, like Bonner’s NBCUniversal operation, have tried other approaches, but have also reported occasional high revenues from their PVOD tastes.
A third way, WarnerMedia’s daily and date releases of its 2021 films on HBO Max and in theaters at no extra charge have not yet provided definitive answers on the overall revenue impact, said Jim Wuthrich, WarnerMedia’s president for home entertainment content and licensing as well DEG CEO.
But he credits the approach for helping even HBO Max subscribers find other catalog content to buy or rent in addition to what’s on offer on the service.
“The number of new customers who came into the room was really quite large,” Wuthrich said of McCourt’s report. “And they keep doing transactions. It’s really very encouraging. We saw how many new customers came in through Premium (VOD) and then they stayed. This is not at the expense of the streaming services. Consumers add multiple streaming services and also continue to lean against this content area and add (rentals and purchases) from the catalog. ”
One of the ongoing debates in Hollywood centered on how valuable PVOD was to the studios, whether it will help streaming services attract and retain subscribers, and whether it will prove to be a pandemic hothouse flower that wilts when normal returns to the ailing theatrical exhibition business. The Johansson lawsuit only exacerbated this debate.
“The reality is that we are all compromising to get products through various consumer offerings earlier than ever,” said Bonner. “Various premium models, SVOD. We learned a tremendous amount about consumer behavior and demand in these windows. Every studio has its own strategy. Consumer engagement is much greater today than ever before, just earlier in the life cycle. Of course there are effects and effects from model to model, but we’re getting more engagement from consumers and that’s a very good entertainment thing and it works for not just one model right now, it works for everyone. “
Wuthrich said it was too early to quantify the exact ramifications of WarnerMedia’s approach that rocked Hollywood (and Warner Bros. filmmakers in particular with with-profits) when it was announced last December.
“The jury is not yet sure what to do with the life cycle of an individual film,” said Wuthrich. “We now have six or seven titles (to watch), fewer than the ones that have gone through the entire (home entertainment) cycle. We believe it will increase the overall viewership because they can watch it anytime, anywhere. We assume that the overall business will grow. It has an impact on the transaction business, but we often have regular customers; Almost 50 percent said they had seen the film before buying it. ”
Repeat consumers of a particular film can watch it online or in theaters and then purchase a physical copy on DVD or Blu-Ray after deciding they want to include it in their permanent collection. The physical copy offers an enhanced, always-on, high quality experience for hardcore fans.
Wuthrich said there is even a notable overlap in those who go to a theater to see, for example, last weekend’s Suicide Squad release and then re-watch it on HBO Max while it is available there about a month after its launch is.
“We absolutely see that getting people to join HBO Max is helpful, yes,” said Wuthrich. “From our point of view, it is very important to give consumers a choice. This is a very unique time and there is a lot of concern among consumers. People just don’t feel comfortable going to the cinema at the moment. “
He warned that “expectations need to be adjusted”, which is considered a success for a given film, especially when going to the cinema becomes safe again for most consumers. However, he conceded that PVOD “adds in other ways too, (but) net-net, it’s hard to say”.
DEG members include most of Hollywood’s home entertainment departments, major streaming services, and many companies in the surrounding ecosystem. And the Expo’s semi-annual statistical report showed how consumer interest in video content of all kinds continues to boom even after five quarters of the pandemic. The organization’s members serve most areas of home entertainment, including various types of streaming video, as well as digital and physical rentals and sales.
Comments are closed.