Consumer entertainment content market to see strong short-term growth | Media Analysis | Business
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Research from Futuresource Consulting has shown that the growth in global consumer expenditure on entertainment content seen in 2017 is set to continue over the next few years and will reach $439 billion globally by 2021.

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The new latest Global Entertainment Content Outlook report calculates that this would represent a 17% increase from 2017. TV and Video accounted for the lion's share of this consumer spend yet as a segment its calculated CAGR was only a modest 2%. Subscription video-on-demand (SVOD) services such as Netflix, Amazon Prime Video and Hulu were seen to be rapidly dominating the overall home video entertainment sector including DVD, Blu-ray, EST, VOD and SVOD. Futuresource noted that in 2013, SVOD was just 13% of home video consumer spend yet by 2017 year-end it comprised almost half of the US$42 billion spent worldwide and showed no signs of slowing.

The analyst believes that global subscription numbers will rise at a CAGR of 15% between 2017 to 2021. "2017 was the year that annual SVOD spend exceeded worldwide spend on packaged media," remarked Global Entertainment Content Outlook author Tristan Veale, market analyst at Futuresource Consulting. "Not only this, but by 2021 SVOD will account for 70% of total home video spend with households taking multiple services instrumental in the growth of this sector."

Yet while SVOD was capturing all of the growth headlines, the analyst made the significant point that in 2017 it was a $19 billion market whereas pay-TV was worth $200 billion. Futuresource added that there still remained significant appetite for pay-TV services, with the driving factors including the bundling of pay-TV services with broadband/telephony, the early availability of premium content and the access to exclusive content - most notable of which being sports.

Overall Futuresource said that pay-TV expenditure rose 4% on the 2016 total. In value terms, the US remains dominant, accounting for close to half of all global spend, at US$106 billion in 2017. In subscriber terms, China's 336 million pay-TV households commands the number one global position. However, the research found that several key pay-TV markets were witnessing falls in subscriber levels, the US, Canada and France the most notable with falls of 1%, 1% and 3% respectively.

Futuresource believes that as the landscape continues to evolve, and content owners increasingly seek to experiment with direct to consumer propositions, the ability for consumers to rebuild their TV bundle with just the content they want becomes more apparent. It added that the emergence of skinny/pay-TV lite services notable, racking up 4.8 million subscriptions in the US.

"With content remaining as one of the main differentiating factors, spend to secure exclusive rights continues to soar placing added pressure on operator's margins," added Veale. "Furthermore, this is compounded by the increased competition stemming from a growing number of online platforms that includes Netflix and Amazon and increasingly the likes of Facebook and Twitter, all of which have significant war chests for content acquisitions. Combined, the FAANG companies are looking to spend around $20 billion on video content in 2018."