The entertainment industry in the U.S. is in the middle of a huge transition from DVDs and cinema viewing to the era of video-streaming and Netflix. A new report suggests that by 2017, video streaming services in U.S. will take home more money than the U.S. box office.
Movie-watching trends in U.S. have changed rapidly in the last few years. Video streaming services such as Netflix and Hulu are increasingly becoming the primary source of entertainment content for the average American consumer. To put this popularity into context, online and TV-based streaming weighed in with $7.34 billion in revenue back in 2013. By 2016, this number is expected to rise to $11.47 billion, a report from PricewaterhouseCoopers (PwC) suggests.
However, the rise in the revenues of video streaming services isn’t necessarily chipping away at box office takings. Box office profits are still soaring by each passing year but this growth is slowing down. In 2013, the U.S. box office raked in $11.56 billion revenues, with a projected revenue of $12.75 billion in 2016.
The one entertainment sector which is on a downward spiral right now is the physical media industry. While DVDs and Blu-ray rentals and sales continue to pull in a significant revenue, the numbers are dipping. The revenue from the sales of such physical media dropped by a whopping $3 billion between 2009 and 2013. And it is expected to fall further down by $4 billion to $8.72 billion in 2018.
In the coming years, film-viewing trends are expected to change. The box office revenues are increasingly leaning on 3D viewings to make profits, a luxury which only a cinema viewing can afford. For now, it takes months for a movie to reach video streaming services after being screened in the theaters. Over time, non-3D movies may become available on streaming services sooner. If the entertainment industry senses that it can make more money by bringing its new releases to services such as Netflix or Hulu, it will make that plunge. And that will, in turn, trim down the growth of the U.S. box office.
Estimates from PwC’s report show that by 2017, video streaming services will constitute 43% revenue of the U.S. film industry, taking away the top crown from the U.S. box office.
Source: PwC
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