July 12, 2024

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Movie Demand Drove 17% Rise In Home Entertainment Spending In 2023

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Healthy consumer demand for feature films after their theatrical release windows drove a 17% rise in home entertainment spending in 2023, according to the Digital Entertainment Group.

A preliminary version of the DEG’s annual survey of spending was released Tuesday, with the final one due in March. It found spending across digital and physical home entertainment formats in 2023 reached $43 billion, up from $36.8 billion in 2022. While film transactions were robust, with blockbusters like Oppenheimer spurring demand across digital and physical sectors, the DEG warned that the dual strikes could have an “adverse impact” on results in “the next few quarters.”

Subscription streaming, the DEG reported, citing data from UK-based research firm Omdia, surged more than 21% year-over-year to top $37 billion. The category dwarfed video on demand (VOD) and electronic sell-thru (EST), with the ranks of major subscription services having swelled just prior to and during the pandemic. On the other side of Covid, with movie theaters back open, media company streaming outlets benefited from theatrical awareness propelling titles like Super Mario Bros. into streaming, drawing more subscription revenue.

Consumer spending on digital purchases (EST) in premium and standard windows kept climbing in the fourth quarter, with purchases rising 7% overall and more than 30% percent for theatrical titles. The DEG noted strong home demand for box office standouts like including Barbie, The Hunger Games: The Ballad of Songbirds and Snakes, Indiana Jones and the Dial of Destiny, Mission Impossible: Dead
Reckoning Part 1
, Oppenheimer and The Super Mario Bros. Movie.

For the full year, spending on digital purchases of theatrical titles was up more than 13%, the report said.

Despite cinephiles snapping up copies of many titles, boosting 4K UHD Blu-ray physical disc sales 15% in the fourth quarter, overall disc sales and rentals dropped 25% for the full year, to just shy of $1.6 billion. Netflix’s exit from the physical disc business dealt a blow in the fourth quarter. The end of Netflix’s red-envelope era prompted the DEG to declare that it will no longer track disc rentals, itself a milestone given that the DEG was formed in 1997 to promote the DVD format.

The top-performing films across all formats in 2023 included Avatar: The Way of Water, Dungeons & Dragons: Honor Among Thieves, Equalizer 3, The Flash, Guardians of the Galaxy Vol. 3, John Wick: Chapter 4, Meg 2: The Trench, Plane, Puss in Boots: The Last Wish, Spider-Man: Across the Spider-Verse, The Super Mario Bros. Movie and Transformers: Rise of the Beasts.

The DEG’s membership includes dozens of stakeholders in the home entertainment business, including studios, tech companies, retailers and manufacturers.

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