Revenue from Netflix and Amazon and other streaming services is forecast to overtake box office takings in UK cinemas by 2020.
A new report from PwC looking at the future of the entertainment landscape highlights the ongoing growth within the online video industry, a growth that is set to see DVD and Blu-ray sales plummet and will eventually exceed takings at the box office.
That is not to say that VOD will kill off cinema, though, with PwC emphasising that the film industry will remain “pretty healthy”. Indeed, cinema attendance is predicted to rise from 172 million admissions in 2016 to 179 million in 2021, with the number of screens across the country jumping from 4,143 to 4,542.
“Demand for internet video shows no signs of slowing down,” Phil Stokes, UK head of entertainment and media at PwC, is quoted as saying by The Guardian. “The figures do not signal the death of film. Look at the box office performance of films such as Star Wars: Rogue One or Fantastic Beasts and Where to Find Them to see the significant amount of enthusiasm for blockbuster movies out there.”
Revenue from TV content through on-demand services, meanwhile, will grow by more than 30 per cent to reach £1.42 billion by 2020, which will place revenue from VOD platforms £0.1 billion ahead of cinema takings.
Netflix, Amazon and other subscription services will account for almost two-thirds of the market, with pay-per-view platforms, such as Sky Box Office, Apple’s iTunes, making up the rest, through a mix of one-off programmes and events and buying and renting titles.
Indeed, physical media is expected to be the big loser in the rise of VOD, as PwC forecasts a “terminal decline” in sales for DVD and Blu-ray discs – from £1.22 billion revenue in 2016 to a predicted £533 million by 2021. Some reports have already found that online video purchases have overtaken sales of DVDs, highlighting how rapidly the shift in home entertainment is occurring.
“The failure in this market is the high street retailers, supermarkets and specialist stores,” added Stokes. “As well as the shift to digital a lot of physical buying is from services like Amazon. And online streaming is bypassing high street retailers.”