Figures from trade body the British Association for Screen Entertainment (BASE) and based on data from the Official Charts Company, Futuresource Consulting and Kantar, show that the UK home entertainment sector grew by 26 per cent in 2020, bringing the total market value to £3.3 billion.
In a year that saw UK consumers staying home in the face of the threat from coronavirus, 2020 has seen digital formats make huge gains as audiences have taken advantage of the instant access and huge range of content choice available across the broad range of digital consumption models.
Total EST (electronic sell-through, or digital purchase) sales across both film and TV content delivered 14.5 per cent growth year-on-year after a record period of growth during the March lockdown. Spend on TVoD (transactional video-on-demand), supported by shoppers new to the category, saw almost 24 per cent growth. Kantar reports that the total number of customers buying and renting across the video category grew by 14 per cent between March and November to 12.9m as audiences seek flexible access to content across transactional methods.
At the same time, SVoD services have also grown by 42 per cent this year. Streaming services now account for 74 per cent 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 also reveals that 23 per cent 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 per cent of households doing so in the following two quarters of the year.
The home entertainment market has demonstrated incredible resilience, pivoting to ensure the performance of available content was maximised across all formats and driving a story of catalogue success. 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 per cent share of value spend on disc, up from 25 per cent in 2019. 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.
Film EST ended the year with 27 per cent growth in volume and 16 per cent in value, with digital formats accounting for more than 43 per cent of the transactional market .
During the first 12-week lockdown period in the UK, the share of spend for digital film was 45 per cent of the total £138.6 million retail disc and Film EST spend, up from a 26 per cent share across the same period in 2019. This huge growth was largely retained after lockdown, with digital film EST ending the year with 36 per cent of spend, up from 26 per cent in 2019.
Due in part to shifts in the New Release slate, catalogue content has grown its share of all film EST transactions from 49 per cent to 56 per cent in 2020, the catalogue share is up 42 per cent year on year, with positive growth every week since the first lockdown period.
2020 saw title-level data on transactional video-on-demand 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 Covid-19 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.
Digital rental’s popularity is now evident, with more than 30.8 million rental transactions made Year to October (Q4 data will be available in Q1 2021), a significant portion of the total 75 million pieces of content that have either been purchased or rented across disc, film EST and VoD.
2020 also saw distributors adopt a test and trial approach to bring content to consumers with the likes of Premium EST and Premium VoD (PVoD). Kantar reports that 1.1 million shoppers have rented a PVoD title since March (with the ‘Premium’ element being classified as a rental price above £10), accounting for 6 per cent of all digital rentals and 20 per cent 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.
Propelled by a bravura performance from Joaquin Phoenix, the biggest selling title of the year was Joker (Warner Bros. Home Entertainment Group), with combined disc, EST and VoD sales of more than 1.4 million units.
Premium Physical Formats
UK consumers are increasingly opting for premium formats when purchasing titles on disc, with Blu-ray sales now accounting for 30 per cent of the disc market value, up from just under 27 per cent on 2019. Proving the value in these high definition disc formats, this year has seen an increase in average selling price across the Blu-ray format, up 7.1 per cent year-on-year to £15.94. Echoing its performance on other formats, catalogue content has thrived on Blu-ray, remaining in positive growth and ending the year with a value of over £73 million.
Fans have continued to show strong engagement with 4K, with sales up 20 per cent year on year jumping to 23 per cent share of total Blu-ray sales. High value re-releases of catalogue content have thrived in 2020 and a vast array of classic content has been given the 4K treatment; of the titles where the original disc release was over a year ago, total consumer spend this year has totalled £19.2 million, which accounts for 73 per cent of total 4K spend.
Consumers have proven in 2020 that there is continuing demand to own these classic catalogue titles on premium disc formats, and with a huge treasure trove of catalogue content yet to receive re-releases, the 564 titles currently available on the 4K format seems likely to keep rising as we enter 2021 and beyond.
In 20020, TV content proved to be robust in the disc market and continues to be boosted by broadcast – TV’s share of the total disc spend is at 28 per cent, up from 23 per cent in 2019. During the second and third quarter of the year, once the flow of New Release film content had been impacted by national lockdown measures, TV content showed a growth of 5.4 per cent year on year to a 26 per cent share of spend in this period.
Catalogue TV content truly shone, with growth of 5.7 per cent year on year surpassing £80 million consumer spend, and catalogue titles accounting for three of the top four best-selling TV titles of the year. Consumers discovered and revisited some acclaimed TV boxsets, with titles such as Game of Thrones S8 (Warner Bros Home Entertainment Group), Chernobyl (Acorn Video by RLJ Entertainment), BBC Studios’ Doctor Who Classic Series Blu-ray Collections, Outlander S5 (Sony Pictures Home Entertainment), Downton Abbey the Complete Collection (Universal Pictures Home Entertainment) and Gangs of London (Dazzler Media) enjoying a huge amount of consumer engagement.
New Release titles such as The Crown S3 (Sony Pictures Home Entertainment) and Gavin & Stacey: A Christmas Special (BBC Studios) also excelled, ending the year in third and seventh place respectively in the TV chart. BBC Studios’ newly commissioned animations of lost Doctor Who episodes, The Faceless Ones and Fury from the Deep also performed well, delighting dedicated fans and collectors and contributing to the success of the franchise, whose combined sales across all content came in at £4.9m, a 15 per cent year-on-year growth from 2019.
The Walt Disney Company ends the year as the leading distributor across combined disc and digital volume sales with a 19.1 per cent share, with best-selling title of the year, Frozen 2 leading the way on combined formats and topping the Film EST Chart.
Taking a close look at physical formats alone, Universal Pictures Home Entertainment continues its reign as the largest distributor across disc sales for both volume and value, remaining a full percentage point above the second-place distributor.
Looking ahead to 2021, the potential strength of the Home Entertainment slate is unparalleled, providing a vast wealth of choice for consumers. As the UK public cautiously anticipates the return to normality in a vaccinated post-Covid world, so does our 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 Tenet (Warner Bros. Home Entertainment Group) performing strongly across digital and premium disc formats in the final weeks of 2020, and as the first major new release title to launch since the spring, consumer demand is clearly high, with a plethora of titles ready to perform across a diverse 2021 slate.
A host of family films including Minions: The Rise of Gru (Universal Pictures Home Entertainment), Luca (The Walt Disney Company), Peter Rabbit 2: The Runaway (Sony Pictures Home Entertainment) and Tom and Jerry (Warner Bros. Home Entertainment Group) are poised to provide entertainment to both kids and parents alike; the nation will be singing along to James Corden’s musical take on Cinderella (Sony Pictures Home Entertainment) and Everybody’s Talking About Jamie (The Walt Disney Company); superhero spinoffs and sequels galore with Disney’s Eternals and Black Widow, as well as Venom: Let There Be Carnage (Sony Pictures Home Entertainment) and Warner Bros.’ Suicide Squad and Wonder Woman 1984; something scary with Antlers (The Walt Disney Company), Spiral (Lionsgate distributed by Elevation Sales) and Last Night in Soho (Universal Pictures Home Entertainment) and long-awaited new instalments of fan favourite franchises, with Universal Pictures Home Entertainment’s F9, Ghostbusters: Afterlife (Sony Pictures Home Entertainment), A Quiet Place Part II (Paramount Pictures), Top Gun: Maverick (Paramount Pictures), Space Jam: A New Legacy (Warner Bros. Home Entertainment Group) and Bond’s return in No Time to Die (Universal Pictures Home Entertainment).
“With the pandemic affecting all corners of life across 2020, evolution in the video category has undoubtedly advanced,” notes Liz Bales, Chief Executive, BASE. “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. This shift to digital doesn’t diminish the resilience of physical formats, though, as evidenced by the performance of TV and catalogue content on disc, and by the strength of premium formats like Blu-ray and 4K UHD both underlining that many viewers are still driven by collection and the access to the best possible home viewing experience that disc provides. 2021 is clearly set to be a year of unknowns as a post-pandemic normality develops, but it is clear that the transactional market, in its established and newer distribution models, continues to be a significant part of the picture across an industry well versed in dealing with change.”
“Resilience and adaptability remain bywords for the transactional video category, a fact underlined by the innovations in digital distribution seen throughout 2020 as much as it is by the ability demonstrated by the disc market to weather a storm that has seen much of the retail estate either closed or focused on ensuring the supply chain of essential purchases,” advises Kevin Dersley, Co-Vice Chair, BASE / Managing Director, Elevation Sales. “Amid all the conjecture as to how the entertainment industry as a whole will respond to ‘the new normal’, it remains clear from the performance of a diverse slate across diverse methods of consumption, that ready access to film and TV content for purchase or rental persists in being a priority for audiences appreciative of the fact that transactional video really does give them what they want when, and how, they want it.”
“2020 saw digital home video reach new heights, with digital sell-through and rental growth accelerating despite pandemic enforced movie delays,” reports David Sidebottom, Principal Analyst, Entertainment, at Futuresource Consulting. “The strength of library content has been truly impressive and sustained throughout the year, even more notable given the continued proliferation of wider video streaming services. Despite the continuing challenging conditions and diverse release strategies, the increased digital rental and sell-through consumer base achieved in 2020 provides a strong bedrock for further market progression.”
“Amongst the many seismic changes in consumption habits that 2020 has seen, the most encouraging for Home Entertainment is the indication that subscription services and transactional formats can not only co-exist, but grow in tandem,” observes Craig Armer, Strategic Insight Director, Worldpanel Entertainment. “For the first time in at least eight years, the number of buyers and renters of transactional formats has grown, helped by a complete resurgence in the popularity of VoD. Encouraging levels of return for a second purchase amongst new consumers suggests habits being formed that should continue into 2021.”