The Digital Entertainment Group’s 2016 Home Entertainment Report compiles the results of an annual member survey of DEG members, tracking sources and retail input.

The results showed that consumer home entertainment spending rose slightly in 2016, powered by a double-digit rise in key digital categories, especially subscription VOD (or SVOD) while traditional DVD and Blu-ray continue to plummet.

Among the highlights for 2016:

  • Total 2016 U.S. home entertainment spending was more than $18 billion, or 2% higher than in the prior year
  • Overall electronic sell-through (EST) spending rose 5% for the year, with theatrical content showing especially strong growth of 17% year-over-year
  • Video on Demand (VOD) was up 6% to $2.1 billion in 2016, with the category returning to growth after falling nearly 3% in 2015
  • Subscription VOD (SVOD) was up 26% in the fourth quarter of 2016 compared to 2015 and up about 22% year-over-year

While SVOD revenues are going up dramatically, there is a debate in the entertainment industry as to whether SVOD is replacing both traditional DVD/Blu-ray revenues and traditional television sales. Furthermore, there is an ongoing debate as to whether SVOD is better classified as part of television based on the terms and nature of the deals. If SVOD is taken out of the equation, home entertainment minus SVOD appears bleak and concerning as we look to the future.

Also interesting, 2016’s best-selling titles across all formats were:

  • Star Wars: The Force Awakens (Walt Disney Studios)
  • Deadpool (20th Century Fox Home Entertainment)
  • Zootopia (Walt Disney Studios)
  • Batman vs. Superman: Dawn of Justice (Warner Bros. Home Entertainment)
  • Finding Dory (Walt Disney Studios)
  • The Martian (20th Century Fox Home Entertainment)
  • Captain America: Civil War (Walt Disney Studios)
  • The Good Dinosaur (Walt Disney Studios)
  • Hunger Games: Mockingjay, Part 2 (Lionsgate)
  • The Secret Life of Pets (Universal Pictures Home Entertainment)

Overall, consumers continued to embrace the convenience and accessibility of purchasing and collecting digital content as this trend continues to take hold. At GHJ, we believe this trend will remain strong for quite some time.

Haimoff Ilan halfbody

Ilan Haimoff

Ilan Haimoff, CPA, CIA, CFE, CFF, is the Entertainment Practice Leader at GHJ. His specialty includes profit participation and forensic accounting on behalf of talent, investors and co-producers at both the major and mini studios. Ilan has over 30 years of accounting experience in public accounting…Learn More