U.S. home entertainment spending rises 6.4% YoY in 1Q 2019

Tuesday, April 30th, 2019 
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DEG: The Digital Entertainment Group today released its First Quarter 2019 Home Entertainment Report compiled by DEG members, tracking sources and retail input.*

  • Home Entertainment Spending Rises 6.4% to $6 Billion in 2019 First Quarter
  • Theatrical Sell-Through Up 14% in Quarter; Subscription Streaming Jumps 21%

Consumers spent $6 billion on movies and television shows for home entertainment in the first quarter of 2019. Spending rose 6.4 percent from the $5.7 billion consumers spent on home entertainment product in the first three months of 2018. The increase came even though the 2019 quarter did not include the Easter holiday, traditionally a strong sales period. Easter spending was included in the comparable period a year earlier.

Digital transactions through electronic sell through (EST) and video on demand (VOD) helped counter declines in the sale of physical discs. Theatrical product EST was especially strong, rising nearly 14 percent in the quarter from a year earlier.

Among the highlights for the First Quarter 2019:

  • The 6 percent increase in U.S. home entertainment spending in the quarter came amid a nearly 20 percent drop in box-office performance for the films released in the period.
  • Subscription streaming rose 21 percent in the quarter from the year earlier period. (Numbers include revenue from services specializing in delivering films and TV shows over the internet such as Netflix, Amazon Prime and Hulu, among others.)
  • Overall EST spending rose nearly 7 percent in the quarter compared to the year earlier period, with the strong theatrical sales more than offsetting a drop in the sale of television product. VOD was up 2 percent as demand for theatrical product remained strong.
  • There is continued significant growth among 4K Ultra HD hardware products. There are currently an estimated 53.4 million households, an increase of 55 percent versus last year, and 14 million 4K UHD Blu-ray player households, an increase of 63 percent over last year.

* Please note, these numbers are preliminary. Final numbers will be available in early June. Please contact DEG for an updated version.

U.S. Consumer Spending ($ in millions)

                                           Q1-2018     Q1-2019      YOY
                                        ----------  ----------  -------
Sell-Thru
Sell-Thru Packaged Goods All            $ 1,058.93  $   822.25  -22.35%
Sell-Thru Including EST                 $ 1,682.64  $ 1,487.72  -11.58%

Rental
 Brick & Mortar                         $    87.97  $    72.99  -17.03%
 Subscription (Physical Only)           $    99.75  $    81.50  -18.29%
 Kiosk                                  $   278.97  $   244.10  -12.50%
Total Rental (excluding VOD)            $   466.69  $   398.59  -14.59%
Total Rental (including VOD)            $ 1,018.29  $   962.73   -5.46%

Digital
 Electronic Sell-Thru (EST)             $   623.71  $   665.47    6.70%
 VOD                                    $   551.60  $   564.14    2.27%
 Subscription Streaming (SVOD)*         $ 2,971.98  $ 3,585.88   20.66%
Total Digital                           $ 4,147.29  $ 4,815.49   16.11%
                                        ----------  ----------  -------
Total U.S. Home Entertainment Spending  $ 5,672.91  $ 6,036.33    6.41%
Box Office in Billions                       $3.59       $2.89  -19.63%

* SVOD data sourced from IHS Markit (technology.ihs.com). Disclaimer: The data is not an endorsement and reliance is at a third party’s own risk.

Disclaimer: This report contains information compiled from sources that the DEG believes have accurately reported such information, but which the DEG has not independently checked or verified. As such, the DEG does not warrant its accuracy or reliability. The report is not intended to provide investment or securities advice.

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