U.S. digital home entertainment spending approached $13bn in 3Q 2024

Consumer Spending on Digital Home Entertainment Approached $13 Billion in 2024 Third Quarter as Subscription Streaming Growth Continues Strong

DEG: The Digital Entertainment Group today released its Third Quarter 2024 Digital Media Entertainment Report compiled by DEG members, tracking sources and retail input.[1]

Consumers spent more than $13 billion on movies and television shows consumed at home and on the go in the third quarter of 2024, a gain of more than $2 billion over consumer spending during the comparable 2023 quarter.

For the first nine months of 2024, overall consumer spending growth was more than 22 percent, with spending approaching $39 billion. The year-to-date 24 percent growth across all digitally delivered formats – electronic sell-through (EST) [2] , video on demand (VOD) [2] and subscription streaming[3] – was driven by growth of almost 28 percent in subscription streaming and smaller gains in digital rental transactions. Spending on physical formats[4] and EST declined for the third quarter and the first nine months.

Among the trends for the Third Quarter and First Nine Months of 2024:

• The 2024 third quarter was fueled by a 26.7 percent increase in subscription streaming, which rose to $11.9 billion, from $9.4 billion in the third quarter of 2023, as targeted and general entertainment services continued to add subscribers with new content including sports, pricing options and ad-supported tiers. Subscription streaming now accounts for 91 percent of consumer spending on home entertainment.
• Internet-delivered digital rentals (VOD) of new theatrical releases grew 7.7 percent for the quarter and 5.2 percent for the first nine months, as consumers continued to embrace feature-length theatricals released for home viewing in the premium window.
• Total spending on digital transactions (including all VOD and EST, but excluding subscription streaming) showed resilience, falling about 10 percent for the quarter and 8 percent for the year-to-date, despite a larger than 20 percent drop in box-office spending on titles released to the home. Theatrical new releases are historically a key driver of home entertainment spending and softness in this area contributed to declines in EST.
• From a transactional slate standpoint, the 2024 first nine months suffered from tough comparisons with 2023, when WBD’s Barbie, Universal’s The Super Mario Bros. Movie, Sony’s Spider-Man: Across the Spider-Verse, Disney’s Guardians of the Galaxy Vol. 3 and TV’s Yellowstone were among the hits in home entertainment windows.
• Among the best-performing titles across transactional formats in third quarter 2024 were Bad Boys: Ride or Die (Sony); Blink Twice (Amazon MGM); Despicable Me 4 (Universal); Dune Part 2 (WBD); Inside Out 2 (Disney); It Ends With Us (Sony); Kingdom of the Planet of the Apes (Disney); The Ministry of Ungentlemanly Warfare (Lionsgate); A Quiet Place Day One (Paramount); and Twisters (Universal).
• Consumer spending on physical product declined 25.7 percent for the third quarter and 23.4 percent year-over-year, at least partially due to the weaker release slate. Being less dependent on the theatrical slate, collectibles ran counter to the trend, however, as 4K UHD catalog releases grew 10 percent year over year, and titles in Steelbook packaging grew 25 percent, according to studio insights.
• Ad-supported premium AVOD and FAST content reached an estimated advertising revenue of $5.8 billion in the third quarter of 2024, according to estimates from Omdia[5] , as more major streamers diversified their offerings to include lower cost subscription plans with ads. Omdia estimates show ad revenue grew more than 41 percent in the quarter. Ad revenue is not included in DEG’s overall tally of consumer spending on home entertainment, but is included here to lend a broader perspective broader view of revenue generated by streaming content.

1. Please note, these numbers are preliminary. Contact DEG for updates.
2. Digital transaction spending (EST and VOD) includes premium releases.
3. SVOD data sourced from Omdia.
4. Physical product category includes consumer spending for sell-thru transactions.
5. Premium ad-supported video data sourced from Omdia. Represents revenue from AVOD (adsupported video on demand) and FAST (free ad-supported streaming TV) services specializing in premium, typically long-form, content.
— Includes Discovery+, Disney+, Freevee, Max, Hulu, LG Channels, Netflix, Paramount+, Peacock, Pluto TV, Roku Channel, Samsung TV+, Tubi, Vix, Vizio WatchFree+, as well as legacy TV Everywhere services and other premium AVOD/FAST.
— Excludes social video services such as YouTube or TikTok.
— For hybrid services, such as Hulu, the data represents only the advertising revenue and does not include subscription revenue generated by the hybrid tier.
— Data represents the U.S. only and is preliminary. Ad revenue estimates sourced from Omdia.

For reference, DEG provides a list of digital entertainment terms and definitions on its web site.

2024-Q3 Home Entertainment Spending
U.S. Consumer Spending ($in millions)

                                           Q3 2023     Q3 2024   Q3-YOY  Q3-YTD 2023  Q3-YTD 2024      YOY
                                        ----------  ----------  -------  -----------  -----------  -------
Physical Product*                          $289.41     $215.05  -25.69%      $869.53      $666.45  -23.36%

Digital**
 Electronic Sell-Thru (EST)                $664.58     $564.30  -15.09%    $1,924.00    $1,681.11  -12.62%
 VOD                                       $354.57     $356.76    0.62%    $1,278.57    $1,273.81   -0.37%
 Subscription Streaming (SVOD)***        $9,429.38  $11,944.24   26.67%   $27,427.48   $35,005.82   27.63%
Total Digital                           $10,448.53  $12,865.30   23.13%   $30,630.05   $37,960.74   23.93%
                                        ----------  ----------  -------  -----------  -----------  -------
Total U.S. Home Entertainment Spending  $10,737.93  $13,080.35   21.81%   $31,499.58   $38,627.19   22.63%

Box Office in Billions                       $3.04       $2.37  -21.93%        $6.89        $5.46  -20.80%

* Physical Product represents consumer spending for sell-thru product only
** Digital transaction spending (EST and VOD) includes premium releases.
*** SVOD data sourced from Omdia. 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.