Digital Streaming Services Continue Meteoric Rise

Geno ScalaAccording to a report released by PricewaterhouseCoopers LLP, the electronic home video sector remains very much on track to overtake traditional US Cinema as early as 2018.This would establish the market segment as the lead revenue generator in film. This news may be stunning to some, but both savvy consumers and industry experts have anticipated the intensification of the this upwards trend for in online entertainment for quite some time.

The Global Entertainment and Media Outlook report for 2015 to 2019 posited a number of major changes in the industry which may be well on their way to fruition. Altogether, PricewaterhouseCoopers anticipates that, in just three years time, electronic home video will generate $13.8 billion dollars in the US alone.

For the first time ever, this figure exceeds predictions for the domestic film revenue for the cinema industry, which current calculations suggest will follow at $13.1 billion. Electronic home video service very well could double in revenue. The report quotes the figure of $8.4 billion in 2014 rising as high as $16.54 billion in 2019, hitting an impressive annual growth rate of 14.6%. Over that same time, cinema revenue is expected to grow at a more modest rate of 3.9%, from $11.2 billion in 2014 to $13.5 billion in 2019.

Electronic home video is comprised of on-demand programming, streaming services like Netflix and Hulu, and similar ventures by premium-cable channels like HBO and Starz. Electronic home video revenue therefore includes both rental and subscriptions to streaming platforms. Cinema revenue, on the other hand, depends on the box office and advertising.

Business Insider quoted Todd Supplee, the Senior Director with PricewaterhouseCoopers’ Entertainment, Media & Communications practices, as saying:

“[Traditional cinema’s] status as the prime storytelling medium in pop culture is still acknowledged but, in an era of Netflix, HBO and Showtime, high-end TV drama is making inroads into cinema’s dominance, and many OTT services (services that provide content through the internet) have announced they will start making films.”

His understanding of the trend touched upon the fact that these platforms, especially those that are subscription-based, cater to clients that have largely already committed to continued payment. Because the revenue structure is therefore much more stable relative to cinema, which can often be a gamble in terms of the returns on investment, the streaming services’ productions are experiencing a creative high-point well beyond what is usually happening on the silver screen.