SVOD revenue to overtake cinema box office in 2019
James R | On 24, Dec 2018
The global revenue from subscription video services is forecast to overtake worldwide cinema box office takings in 2019, according to one new study.
Research by Ampere Analysis provides an interesting snapshot of the current state of the movie industry, as it finds that subscription streaming services continue to build momentum. Revenue from SVOD services in the USA is already outpacing the domestic theatrical box office, as of 2017, and the same is expected to happen by the end of 2018 here in the UK.
One of the reasons of this is the affordability and accessibility of subscription streaming platforms, particularly when compared to the pricing of cinemas. The average price of a cinema ticket in most markets is higher than a month’s subscription to an SVOD service, according to Ampere. Across 15 markets, the more expensive cinema tickets are, the lower the cinema attendance. In Scandinavia, where cinema tickets cost $13 per visit, the average person visits the cinema less than once a year. The same is true in reverse, however: in Mexico, where the average price is $2.50, the average persons goes to the cinema 3.3 times a year.
In nine out of the 15 markets studied, including the USA, UK and Germany, the average cinema ticket price is higher than a one-month subscription fee.
However, why that might sound like consumers are facing a choice between them, the data found that in all markets surveyed, SVOD subscribers are more avid cinema-goers than those who don’t subscribe at all; the audiences are complementary, not competitive. Indeed, in Japan, SVOD subscribers go to the cinema more than three times as those who don’t subscribe to any streaming platform.
Nonetheless, global SVOD revenue is expected to top $46 billion in 2019, compared to just under $40 billion in worldwide theatrical box office revenue, which highlights the challenges currently facing cinemas – not just in terms of pricing, but in terms of perceived value, customer experiences and other more practical factors.
“There’s clearly an appetite for content among some consumers whether that be on the big screen, or a smaller one,” says Ampere. “The key for cinema is to understand that while SVOD subscribers are more avid cinema-goers, this may not always be the case. Therefore, the shared experience of watching a film on the big screen must remain an enticing — and realistically priced — one.”