Brits to spend more on VOD than DVD this year
James R | On 07, May 2016
This year, for the first time, Britons will spend more on video streaming subscriptions and film and TV downloads than on buying and renting DVDs, according to Strategy Analytics.
The research and consulting firm’s latest report predicts that consumers will spend £1.31 billion on streaming and downloading in 2016 (23.7 per cent more than 2015), while spending on DVDs and Blu-ray will fall 16.3 per cent to £956 million – the first time that figure has dropped below the £1 billion mark since 1994. Online formats will account for 58 per cent of home video spend, compared to 42 per cent for DVDs (down from 52 per cent in 2015).
The figures, though, combine online subscription services with pay-per-view services. Once broken down, the projections actually show that DVDs and Blu-rays will still account for the biggest chunk of home entertainment spending (40 per cent), compared to 15 per cent for online rentals and 10 per cent online purchases. SVOD services, meanwhile, will account for 33 per cent of spending. Indeed, with £742 million of the market going on subscriptions, platforms such as Netflix and Amazon Prime Video will account for £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 Video, adds the research, with around 20 per cent of households who subscribe to a video streaming service signing up to at least two.
Video streaming subscriptions will be the dominant format from 2017 onwards, suggests the report, and will account for over half of consumer home video spend by the end of 2021.
Physical discs, on the other hand, are on the decline, says the report, with the cash splashed on buying them expected to drop 16 per cent this year to £905 million. Spend on renting DVDs will fall 24 per cent to £51 million, or just 2 per cent of the market.
“Five years ago, DVDs represented 86 per cent of consumer spend on home video,” says Michael Goodman, Strategy Analytics’ Digital Media Director.
“In five years, it will be less than 14 per cent, 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.”