Box office still beats competitors but DTC poised to change film consumption | Media Analysis | Business
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Despite changes in consumption models, research from Ampere Analysis has confirmed the growing global demand for movies with traditional windowing remaining a unique asset for the film industry.
Ampere boxoffice 25Feb2020
The study showed that consumer spending on movies has grown by nearly 30% over the past decade, encompassing theatrical/cinema, home entertainment, premium pay-TV and subscription OTT. And most film fans were found to use more than one way to consume film-based content.

Ampere found that the main drivers of the market’s ongoing expansion were theatrical – with notable growth in Asia compensating for declines in the home entertainment market – and subscription OTT, which it said increasingly represents one of the most accessible ways that consumers can easily watch films.

Ampere classified 11% of Internet users as super-fans and noted that an enduring feature of the movie market was the fact that consumers don’t typically just rely on a single way of consuming films. They also go on group visits to cinema to watch the latest films as well as rent and buy movies released on DVD/BD or via digital stores. They also increasingly subscribing to premium movie channels via their pay-TV operator and take up subscription OTT offering large catalogues, often with slightly older titles). Ampere believes that the ability of the industry to drive meaningful spending across each segment of the market demonstrates the power of windowing to monetise film content.

The survey also found that three-quarters of consumers use more than one medium to watch film. Most commonly, they combine going to cinemas to watching movies on subscription OTT services. in addition, 45% of Internet users across the surveyed markets mix cinema-going with using a subscription OTT service like Netflix or Amazon.

Ampere added that despite the increased availability of competing content to watch, there was little direct correlation between uptake of OTT services, such as Netflix, and declines in theatrical admissions. However, the analyst warned that the launch of major studio-led direct-to-consumer services is likely to be one of the biggest factors influencing how the movie market develops over the next five years. While SVOD players have been key buyers of rights for US major film titles, the studios are already pulling back, ring-fencing their content for their own DTC services such as Disney+.

Furthermore, the analyst stressed that if content windows were adjusted by studio groups to prioritise incentivising consumers to sign up for the new DTC services, this could dampen any possible recovery in the market segment. “Although the global movie market has grown over the last decade, the way consumers buy film has altered dramatically. As the home entertainment market has dwindled, consumers have spent more of their disposable income on premium pay-TV channels and, more recently, on subscription OTT services,” noted Ampere Analysis director Richard Broughton.

“The biggest disruption to the way the market works however, could be driven by the studios themselves. The launch of DTC services holds the potential to alter the end market for movies permanently. We would advise film distributors and producers to be careful to keep hold of the unique resource which the film industry has at its disposal, and which has made it so successful at monetising content over the past decades – windowing.”