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Home entertainment business stays resilient

by Don Groves

Despite the booming popularity of Netflix, Stan and other streaming platforms, Australian consumers continue to buy and rent movies and TV shows on disc and online in prodigious numbers.

Last year Australians spent $805.5 million on DVDs and Blu-ray discs and an estimated $200 million- a record – on acquiring content from VoD services.

So the home entertainment business, excluding the SVoD platforms, racked up just over $1 billion in 2016, down just 7% on the prior year’s $1.084 billion, according to the Australian Home Entertainment Distributors Association.

AHEDA’s report contradicts claims that online sales and rental prices are more expensive in Australia than in the US and UK, and that Aussies have to wait longer to see popular movies in cinemas.

Digital pricing in every category is cheaper in Australia than the US, and Australia is cheaper than the US and UK in VoD for both new releases and catalogue product.

“The average digital movie price data AHEDA has commissioned from analysts shows again that Australia has some of the cheapest digital movie prices in the world. This dispels the myth that Australia gets their movie content later and is more expensive. The so-called ‘Australia tax’ pleasingly does not apply to the movie industry,” AHEDA CEO Simon Bush said.

Nine of the top 10 highest-grossing films released last year opened here before the US. The average window between theatrical and home entertainment is 90 days, comparable with most other markets.

Bush is not surprised at the resilience of traditional and digital home entertainment despite the rise of Netflix (which is estimated to have 2.5 million subscribers in Australia) and Stan.

“What we have seen over the past two years is that SVoD is a different offering. You can’t get new release films on SVoD,” he said. “When you add it all up, total home entertainment paid-for consumption is very robust. In Australia we have long had a culture of buying and we have a really good retail environment.”

The DVD market declined by 11% last year, primarily due to waning demand for library films, but new release disc sales rose by 4%. On Blu-ray sales of new films were up by 14% and TV series sales jumped 7%.

Catalogue sales fell due to consumers watching that content on streaming services and mass merchants allocating most, if not all, of their shelf space to the top 20 selling titles.

Through the end of October, Australians purchased, or rented digitally, more than $165 million in films or TV shows. AHEDA projected the market for the calendar year peaked at $200 million, up 10% on 2015.

The outlook for the home entertainment industry is positive for the next few years. If the physical business continues to decline at an annual rate of 8%-10%, that segment will still be worth half a billion dollars in four or five years.

If the digital sector continues to grow at around 10% per year it could accelerate to $350 million over that time. Bush expects new release DVD and Blu-ray sales to grow again this year, feeding off the strong theatrical 2016 slate, which looks set to continue with titles such as Disney’s Beauty and the Beast, Guardians of the Galaxy Volume 2, Pirates of the Caribbean: Dead Men Tell No Tales and Thor: Ragnorak.

From other studios the line-up includes Universal’s The Fate of the Furious, The Mummy and Despicable Me 3, Fox’s Alien: Covenant, War for the Planet of the Apes and Kingsman: The Golden Circle, Sony’s Spider-Man Homecoming, The Dark Tower and Blade Runner, and Warner/Roadshow’s Wonder Woman, The Lego Ninjago Movie and Justice League.

2016 (Q2 USD exchange rate and all in USD):

   Australia  United Kingdom  USA
 Electronic Sell Through (EST) Standard Definition (SD)     $12.40 NR (new release)  
 $8.01 Cat (catalogue)
 $11.05 (new release)  
 $8.75 (catalogue)
 $14.34 (new release)  
 $9.60 (catalogue)
 EST (HD)  $15.00 (new release)
 $9.79 (catalogue)
 $13.85 (new release)
 $10.65 (catalogue)
 $16.58 (new release)
 $14.26 (catalogue)
 Video on Demand (VoD) (SD)  $3.93 (new release)
 $2.65 (catalogue)
 $4.07 (new release)
 $2.98 (catalogue)
 $4.43 (new release)
 $2.76 (catalogue)
 Video on Demand (VoD) (HD)  $4.53 (new release)
 $3.47 (catalogue)
 $5.15 (new release)
 $4.05 (catalogue)
 $5.61 (new release)
 $3.87 (catalogue)

Top 10 selling DVD and BD combined 2016 by volume:

  1. Star Wars V11 The Force Awakens
  2. Deadpool
  3. The Dressmaker
  4. Game of Thrones Season 5
  5. Zootopia
  6. James Bond Spectre
  7. Batman V Superman Dawn of Justice
  8. The Martian
  9. Hunger Games Mockingjay Pt2
  10. The Secret Life of Pets

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