SVOD surge as UK video industry grows by 9.5% in 2019 | Media Analysis | Business | News | Rapid TV News
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Figures released by the British Association for Screen Entertainment (BASE) have revealed that the UK’s that the home entertainment sector total market value was £2.6 billion in 2019 with almost two-thirds accounted for by subscription video-on-demand services.
BASE homeent 6Jan2020
The top line figures in the survey that showed that fundamentally the UK video category grew by 9.5% over the year with physical formats accounting for 56% of transactional spend and electronic sell through (EST) increasing 3.5% to £263 million. In addition, the survey showed that 4K/Ultra HD now accounts for 3% of total Blu-ray spend.

Looking at underlying market trends, BASE said that a proliferation of consumption models, including traditional physical media and digital consumption at home and on the move, means that access to home entertainment content is more pervasive than ever before. It added that with subscription streaming services now at what it called an entrenched layer of the home entertainment industry, as it calculated that 65.9% of market value is generated by SVOD services such as Netflix or Amazon Prime Video.

The association said that there was an extra significance in that such services also serve as a launchpad for high-quality original content that often then goes on to reach an even wider audience via transactional formats. It added that with 39.6% of SVOD subscribers also transacting on physical or digital formats, and that with 7.2 million consumers without subscriptions, the transactional home entertainment market remains vital.

Indeed BASE calculated this to be worth more than £891 million in 2019, just over half of which (54%) value attributed to the purchase of DVD, Blu-ray and 4K Ultra HD formats. More than two-fifths of consumers who made a physical transaction within the past 12 months did so to add to a collection and 46% so they could re-watch on multiple occasions. Within the Blu-ray format, 4K UHD sales have seen yet another year of growth, now representing 16.3% of the Blu-ray market, and a total of 4.3% of the overall disc market.

BASE observed that the growth in EST — 4.5% volume and 3.5% value — suggests that the digital revolution that has taken place in recent years is increasingly permeating the choices consumers are making for owned media too, with increasing numbers of consumers opting to grow their digital collections as well as the collections on shelves at home. On average across the top 10 titles of 2019, digital purchase now accounts for 33 per cent of copies sold, with Twentieth Century Fox’s Bohemian Rhapsody and The Walt Disney Company’s Avengers: Endgame selling in excess of half a million digital copies.

This trend was also witnessed in the digital arena. The survey noted that the continued success of TV content launched and accessible via streaming and catch-up services signposts the considerable consumer appetite to own SVOD-driven series on physical formats. It said that this was demonstrated in 2019 by the success of Good Omens (BBC Studios) which landed at number eleven in the TV chart.

Looking forward, BASE said that subscription services have undoubtedly changed the face of the home entertainment category and 2020 will see that change continue, with the UK launch of direct-to-consumer platforms like Disney+ presenting both a challenge and an opportunity for the video category. Yet it cautioned that while must-see content will be easier to access than ever before thanks to digital delivery across devices, there could likely be a ceiling to the number of subscription services consumers are willing to sign up for.

“In a year that has seen consolidation between studios and independent distributors alike, the reality is that consumption habits are changing and are likely to continue to do so, with the debut of D2C services like Disney++, Peacock and HBO Max all likely to further catalyse that change,” commented BASE chief executive Liz Bales. “At the same time, it remains clear that ownership – whether on the best possible physical formats like Blu-ray and 4K UHD or, increasingly, digital ownership with its own set of flexible benefits like watching wherever on the go and instant access...Opportunity often comes from change, as evidenced by the UK production boom, and so we look to 2020 with excitement and a wealth of content and delivery well equipped to meet evolving audience needs.”