Britons will for the first time this year spend more on video streaming subscriptions and film/TV downloads than on buying and renting DVDs.
According to Strategy Analytics, consumer spend on streaming and downloading in 2016 will amount to £1.31 billion (€1.66 billion), or 23.7% more than last year, while the figure for DVDs, including Blu-ray, will fall by 16.3% to £956 million. Significantly, the latter will be below the £1 billion mark for the first time since 1994.
As a result, online formats will account for 58% of home video spend ad DVDs 42%, compared to 52% last year.
Splitting out online and DVDs into the five main methods of accessing home video, most spend in 2016 will still go on buying DVDs/Blu-ray, but that will drop 16% to £905 million.
Streaming subscription services, such as Netflix and Amazon Prime Video, follow next and 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 will be the dominant format from 2017 onwards and account for over half of consumer home video spend by the end of 2021.
Downloading to rent will rise 8% to £338 million in 2016, downloading to buy will rise 16% to £234 million. Spend on renting DVDs will fall 24% to £51 million, or just 2% of the market.
Commenting on the study’s findings, Michael Goodman, Strategy Analytics’ digital media director, said: “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.
“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 this year will be 3% more than in 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. Thus, overall revenues for the home video market will grow 6.6% to £2.86 billion.
