Streaming services continue to accelerate, and there’s no reprieve for the cinema or physical media sales, which further declined in popularity in the third quarter.
That’s according to new data from the Digital Entertainment Group (DEG), which reveals that U.S. box office sales declined 22% compared to the previous year, while Blu-ray and DVD revenue plunged 26%.
Meanwhile, the shift away from the cinema and physical discs shows no signs of slowing down, with streaming services increasing their revenue by 27% over the same period, the data shows.
Moreover, digital movie sales dropped 15% year over year, and movie rentals from digital platforms like Apple TV and Fandango at Home remained flat during the quarter. DEG says this was likely due to the lack of any major blockbuster releases over the period.
Although UHD Blu-ray discs remain somewhat popular, the physical media market as a whole continues to decline, DEG said in its Q3 2024 Digital Media Entertainment Report.
Its report reveals that consumer spending on physical media products fell 25.7% in the third quarter, due partially to a weaker release slate. However, within the digital media segment, there was one bright spot in the sales of “collectibles”, such as Blu-ray box sets, with sales of those rising 10% from the previous year. Of course, the segment is not reliant on theatrical releases, but rather people’s nostalgia.
On the other hand, the lack of any major releases meant that movie theatres also struggled during the quarter. Box office receipts fell 22% year-over-year, and are down 21% in the year-to-date. As such, even if the cinema sees a strong final quarter, it’s unlikely to match the performance of last year, when revenue was already 20% lower than it was in the final year prior to COVID-19, in 2019.
The big winners are, of course, streaming services like Netflix, Amazon Prime Video, Disney+, Apple TV+, Paramount and Hulu, which are the main beneficiaries of consumer’s changing content consumption habits. These days, the vast majority of people prefer to stay at home and watch as much epic content as they can squeeze in, paying a relatively small subscription fee for the privilege.
The rise of streaming means that the home entertainment business as a whole is doing okay. During the first three quarters of the year, U.S. consumers spent $38.63 billion on home entertainment, compared to just $5.46 billion on trips to the cinema.
The data shows why an increasing number of studios are opting to skip the cinema and go directly to streaming, as the market is now seven-times larger than the box office.
The physical media market wasn't helped by the recent news that U.S. mega-retailer Target plans to stop selling DVD and Blu-ray discs in-store by 2025. The decision echoes a larger trend both in the US and worldwide, where we are seeing consumers opting for streaming over DVDs and Blu-ray discs.
