DEG: Subscription Streaming Continues to Drive Consumer Home Entertainment Spending With Double Digit Growth in Q3
Bad Boys: Ride or Die
November 14, 2024
Consumers spent more than $13 billion on movies and television shows consumed at home and on the go in the third quarter of 2024, a gain of more than $2 billion from consumer spending during the comparable 2023 quarter, according to data from DEG: The Digital Entertainment Group. Spending continued to be overwhelmingly driven by continued growth in subscription streaming.
The 2024 third quarter was fueled by a 26.7% increase in subscription streaming, which rose to $11.9 billion from $9.4 billion in the third quarter of 2023. Subscription streaming now accounts for 91 percent of consumer spending on home entertainment.
For the first nine months of 2024, overall consumer spending growth was more than 22%, with spending approaching $39 billion. The year-to-date 24% growth across all digitally delivered formats — transactional (TVOD) and subscription (SVOD) — was driven by growth of nearly 28% in subscription streaming and smaller gains in digital rental transactions.
Consumer spending on digital rentals of new theatrical films grew 7.7% for the quarter and 5.2% for the first nine months of the year, driven by spending on movies released for digital rental earlier than usual and at a higher price.
Total spending on digital transactions (rental as well as purchase) fell about 10% for the quarter and 8% year-to-date, despite a larger than 20% drop in box-office spending on titles released to the home. Theatrical new releases are historically a key driver of home entertainment spending, and softness in this area contributed to declines in EST, according to the DEG.
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Spending on physical formats and digital purchases continued to decline in the third quarter and the first nine months. Disc spending fell more than 25% in the third quarter of 2024 from the same quarter in 2023, and 23% in the first nine months of the year compared to the same period in 2023. EST spending (which includes premium-priced releases) dropped 15% in Q3 2024 from the same period in 2023 and 12.6% year-over-year in the first nine months. A weaker theatrical slate was partially to blame for the drop, according to DEG. Being less dependent on the theatrical slate, collectibles ran counter to the trend, however, as consumer spending on 4K Ultra HD Blu-ray catalog releases grew 10% year over year, and spending on titles in steelbook packaging grew 25%, according to studio insights cited by the DEG.
From a transactional slate standpoint, the 2024 first nine months suffered from tough comparisons with 2023, when WBD’s Barbie, Universal’s The Super Mario Bros. Movie, Sony’s Spider-Man: Across the Spider-Verse, Disney’s Guardians of the Galaxy Vol. 3 and TV’s “Yellowstone” were among the hits in home entertainment windows.
Among the best-performing titles across transactional formats in the third quarter of 2024 were Bad Boys: Ride or Die (Sony); Blink Twice (Amazon MGM); Despicable Me 4 (Universal); Dune Part 2 (WBD); Inside Out 2 (Disney); It Ends With Us (Sony); Kingdom of the Planet of the Apes (Disney); The Ministry of Ungentlemanly Warfare (Lionsgate); A Quiet Place Day One (Paramount); and Twisters (Universal).
Ad-supported premium AVOD and FAST content reached an estimated advertising revenue of $5.8 billion in the third quarter of 2024, according to estimates from Omdia, as more major streamers diversified their offerings to include lower cost subscription plans with ads. Omdia estimates ad revenue grew more than 41% in the quarter. Ad revenue is not included in DEG’s overall tally of consumer spending on home entertainment.
Digital transaction spending (EST and VOD) includes premium releases. SVOD data is sourced from Omdia.
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