Goodbye to living room clutter. This year, for the first time, Britons will spend more on video streaming subscriptions and film/TV downloads than on buying and renting DVDs, according to new research from Strategy Analytics.
Consumers will spend £1.31 billion on streaming and downloading in 2016 (up 23.7% year on year), compared to £956 million on DVDs and Blu-ray – a -16.3% decline to below the £1 billion mark for the first time since 1994. As a result, online formats will account for 58% of home video spend, compared to 42% for DVDs (10% less than 2015).
While most spend in 2016 will still go on buying DVDs/Blu-ray, it is forecast to drop -16% to £905 million.
Streaming subscription services, such as Netflix and Amazon Prime Video, are the fastest-growing format, rising 36% to £742 million – or £1 in every £3 spent on home video. There are around 4.6 million Netflix households in Britain and 2.5 million with Amazon Prime. Around 20% of households who subscribe to a video streaming service, subscribe to at least two.
Video streaming subscriptions are forecast to be the dominant format from 2017 onwards and will account for over half of consumer home video spend by the end of 2021.
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Downloading to rent is expected to rise 8% to £338 million in 2016, while downloading to buy will rise 16% to £234 million. Spend on renting DVDs will fall 24% to £51 million – just 2% of the market.
“Five years ago, DVDs represented 86% of consumer spend on home video, in five years it will be less than 14%, with DVD/Blu-ray rental virtually extinct,” said Michael Goodman, Strategy Analytics’ digital media director.
“As online provides increasing ways to access films and box-sets, physical simply can’t compete. Although many people will always prefer a physical disc, retailers will have to decide whether it’s even viable to offer that format in five years’ time. Many won’t and with less high street players around, it will be online, ironically, that keeps DVDs on life support via e-commerce.”
Overall, the £2.27 billion Britons will spend on home video is a 3% rise on 2015 and the equivalent of £6.63 per household a month. However, video advertising around streamed and downloaded content will rise 23% to £593 million, seeing overall revenues for the home video market grow 6.6% to £2.86 billion.
