The streaming industry has been an entertainment lifeline during the pandemic, and entertainment titans like Warner Brothers Pictures are setting the pace for 2021 with the next evolution of entertainment. In an announcement that has viewers excited, Warner Brothers will be releasing each of its 2021 blockbusters in theaters and on HBO Max simultaneously, offering a glimpse of things to come.
As the world has been stuck inside, the shift to streaming has been a savvy – and appreciated – consumer intelligence response. We’ll settle in for a preview of the conversation with a focus on:
- Consumers’ movie watching habits.
- The evolution of the movie streaming space, as studios, distributors, and streaming companies have adapted to changes in 2020 with “streaming,” as well as Premium Video on Demand (PVOD) options.
- Some of the streaming and VOD stats of tomorrow.
And speaking of stats, here are a few we uncovered that are of interest to the conversation:
- The global video streaming market stood at $42.6B in 2019. Forecasts predict the industry to see a CAGR of 20.4% through 2027.
- Before COVID, 73% of U.S. consumers subscribed to at least one paid subscription service. That number has now risen to 80%, with Gen Z seeing the most saturation at 94%.
- According to Statista, when seeing a movie for the first time, 36% strongly prefer streaming over a theatre experience. In 2018 that number was only 15%.
- Streaming with a subscription (SVOD – subscription video on demand) isn’t the only game on the block, as theatrical releases are still on the table and PVOD (premium video on demand) offers exciting potential as well.
With that, let’s jump in and see how things are changing . . . and staying the same.
Consumers are Watching Movies at Home
If there’s one thing for sure in 2020, it’s that streaming is king. People have long since gotten comfortable in their pandemic routines, and when it’s time to unwind, it’s in some comfy clothes, ready to watch the latest hit movie.
Video on demand (VOD) viewership of every variety has exploded in popularity during the pandemic, and movies are what’s on the menu. Streaming service subscriptions were already steamrolling in popularity year over year, and the coronavirus has just fast-tracked the inevitable. And people just can’t get enough.
As U.S. theatres closed their doors back in March at the onset of the pandemic, the wholehearted embrace of movies on demand was nearly instantaneous. Subscription video on demand (SVOD) saw an astonishing 53% growth in average transactions per household in a year over year comparison with March 2019.
It’s evidence of a growing preference for watching movies at home. Consumers were already familiar with their favorite streaming services, so it wasn’t a giant leap to take when lockdowns hit the scene.
Here you can see preferences changing from 2018 to the present in a Statista report asking how people felt about watching a movie for the first time in a theatre or at home. Those who strongly prefer watching in a theatre are declining, while those that strongly prefer streaming have jumped 21%.
Evolution of the VOD Space
Consumer and competitive intelligence reveal white space in markets that savvy brands can leverage to create first mover opportunities. And if they had a time machine, movie theaters would undoubtedly be creating corresponding streaming services of their own as part of their offering. As it stands, AMC and Cinemark are forging partnerships with entertainment giants to strengthen their combined VOD footing.
Historically, movies have gone to theatres for seventy days prior to becoming available for home release. But in recent months, we’ve seen every deviation from that norm as movies sought to reach their audiences at home. Studios have explored PVOD releases such as Trolls World Tour and King of Staten Island from Universal, Mulan from Disney and Antebellum from Lionsgate. We’ve also seen theatrical-only offerings like Tenet (Warner) and some releases that disregard both theatrical and PVOD altogether to stream free, with subscription, like Borat 2 (20th Century Studios) on Amazon Prime Video.
So, Warner Brothers’ recent announcement to release all of their movies on HBO Max for the duration of 2021 lends to the natural progression of its subscription-based HBO Max. And it’s a win for consumers who will be able to start watching anticipated blockbusters from the comfort of home on release day. And dropping Wonder Woman 1984 to streaming audiences on Christmas Day is incredibly well-timed move:
Streaming Stats of Tomorrow
Consumers have cozied up to VOD and there’s a rumbling underfoot in the streaming industry as brands jockey for market share. Deep into the back end of the pandemic, 80% of U.S. consumers were subscribed to at least one subscription service, and now the market is projected to grow at over a 20% compound annual growth rate (CAGR) through at least 2027.
A look in the patent dataset in the Quid product reveals that fifty new VOD-related patents have been filed so far this year. Telecom companies are leading the fray here like Broadband Inc., AT&T and Comcast, with the bulk of filings in the U.S. and China.
A peek in the company dataset shows thirty-eight VOD companies with movement related to M&A or IPO’s this year. Total investment received by these companies tops $2B with a median investment of $11.8M.
Brands looking to hone their competitive intelligence to a razor’s edge will want to dig further here to reveal what’s going on behind the scenes in the streaming industry, as there’s so much happening in this fast-paced market.
Who knows what the future holds for the VOD industry? Keeping a keen eye on the VOD space for emerging trends and new technologies is the way forward into next year. Consumers have shown that they’ll readily embrace exciting offerings, so the sky is the limit. You never know, maybe those VR movies will finally catch on to a nascent VR/VOD fandom.
What we do know however, is that no matter what the future holds, consumer and competitive intelligence is the key to staying ahead of the curve. 2020 has been a roller coaster year and has paved the way for exciting moves in the streaming space. Is your brand ready for the ride? Be sure to reach out for a demo and we’ll get you tuned into the big picture.