Video sector rises strongly as UK home entertainment worth £3.3BN in 2020 | Media Analysis | Business
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Consumer demand for digital and premium formats bolstered the home entertainment sector video sector in 2020, bringing the total market value of the market to £3.3 billion with the video category alone growing by 26% annually, says research from the British Association for Screen Entertainment (BASE).
BAse UK ent market 7Jan2021

BASE said that fundamentally the home entertainment market has demonstrated what it called incredible resilience, pivoting to ensure the performance of available content was maximised across all formats and driving a story of catalogue success. Based on data from the Official Charts Company, Futuresource Consulting and Kantar, the research showed that as UK consumers stayed at home in the face of the threat from coronavirus, 2020 witnessed digital formats making huge gains as audiences took advantage of the instant access and a huge range of content choice available across the broad range of digital consumption models.

The study reported that total EST (electronic sell-through, digital purchase) sales across both film and TV content delivered 14.5% year-on-year growth after a record period of growth during the March lockdown. Spend on TVOD (transactional video-on-demand) saw almost 24%. Kantar reports that the total number of customers buying and renting across the video category grew by 14%between March and November to 12.9 million as audiences sought flexible access to content across transactional methods.

At the same time, SVOD services grew 42% resulting in streaming services now accounting for 74% of the total market value, with new services joining the market in 2020 such as Disney+, and an expansion in the uptake of existing services such as Netflix or Amazon Prime Video during the first UK lockdown period. Kantar noted that 23p of British households signed up to a subscription service during the first quarter and around the time Disney+ launched with a further 7% and 3.5% of households respectively doing so in the following two quarters of the year.

Against the backdrop of closure of the cinema estate and the knock on reduction of new release and Hollywood blockbuster titles, independent studios and distributors worked to fulfil consumer demand for content, resulting in a 30% share of value spend on disc, up from 25% in 2019. The study noted that consumers have embraced transactional in all its forms, with the growth of EST as well as an enduring love of catalogue, TV box sets and high value premium physical releases all boding well for continued growth once the new release pipeline reopens in 2021.

Looking at individual sectors in depth, BASE found that film EST ended the year with 27% growth in volume and 16% in value, with digital formats accounting for more than 43%% of the transactional market. During the first 12-week lockdown period in the UK, the share of spend for digital film was 45% of the total £138.6 million retail disc and film EST spend, up from a 26% share across the same period in 2019. This huge growth was largely retained after lockdown, with digital film EST ending the year with 36% of spend, up from 26% in 2019.

Catalogue content has grown its share of all film EST transactions from 49% to 56% in 2020, the catalogue share is up 42% year on year, with positive growth every week since the first lockdown period. Frozen 2 was the most popular film through EST with 500,400 sales followed by Joaquin Phoenix-led Joker (Warner Bros. Home Entertainment Group, pictured) with 337,100.

2020 saw title-level data on transactional VOD activity become available for the first time from the Official Charts Company and based on data from digital retailers, delivering a view of consumer engagement with VOD services. VOD activity saw a period of rapid growth during the March lockdown, with an average of 600,000 rentals per week before lockdown rising to more than 1 million rentals a week after lockdown was implemented. More than 30.8 million rental transactions were made in the year to October 2020 with a significant portion of the total 75 million pieces of content that have either been purchased or rented across disc, film EST and VOD. With 592,000 sales, Joker was the most popular TVOD title in 2020.

Kantar also reported that 1.1 million shoppers have rented a Premium VOD (PVOD) title since March (with the ‘Premium’ element being classified as a rental price above £10), accounting for 6% of all digital rentals and 20% of total rental spend. UK customers continued to transact at scale with available new release product with the four best sellers all topping one million transactions across disc, EST and TVOD and the balance of the top 10 all exceeding 500,000 transactions. The biggest selling title of the year was Joker with combined disc, EST and VOD sales of more than 1.4 million units.

Looking ahead to 2021, the BASE study predicted that the potential strength of the home entertainment slate was unparalleled, providing a vast wealth of choice for consumers. It added that as the UK public cautiously anticipates the return to normality in a vaccinated post-Covid world, so did the industry, with the anticipated easing of tiered social restrictions in the Spring, and the return of cinema audiences hopefully allowing this to become a reality by the second quarter of the year.

“With the pandemic affecting all corners of life across 2020, evolution in the video category has undoubtedly advanced,” said BASE chief executive Liz Bales commenting on the research. “Digital transactional video has arguably been a beneficiary of conditions that forced people to stay home, as more than two million new customers joined millions more already engaging with EST and VOD content, uncovering a depth and breadth of diverse catalogue and new release content available without subscription."