U.S. Transactional Movie Revenues Topped $6 Billion in 2020

Transactional movie revenues across pay TV and online, including PVOD, in the U.S. were up 14 percent last year to more than $6 billion, Omdia says in a new report.

The Consumers and Movie Windows report notes that while transactional movie revenues did reach a new high in 2020, they weren’t enough to compensate for the declines in theatrical revenues amid Covid-19. Total consumer spending on movies in cinemas, TVOD and physical dropped 43 percent from 2019. Including SVOD, spending was flat.

Exploring the consumer interest in PVOD, Omdia found that 57 percent of U.S. online adults would pay a premium for home access to a new movie release. The average maximum spend per title is $15.16, $1 more than the average cost of a digital retail movie. For homes of four family members with children under the age of 18, meanwhile, 71 percent are willing to pay for PVOD at an average price of $20.07. For members of this group that go to the cinema more than six times a year, the average price they are willing to pay is $28.

Omdia notes that the PVOD window is not bringing in enough to match the $10.7 billion in box office revenues from 2019; to reach those numbers through PVOD, each household would have to make at least 5.5 PVOD transactions a year, for a total of 700 million transactions a year.

According to Omdia’s research, the willingness to pay for premium titles increases with the number of online video subscriptions a consumer has. Omdia says this showcases the opportunity for studios with D2C platforms to use new releases to generate additional TV revenues and drive subscriptions and retention.

“It is clear that the demand for content is continuing to increase across all consumers and whilst studios are reacting to this demand by providing more new content to SVOD, there is a balancing act that needs to continue,” said Fateha Begum, principal analyst at Omdia. “PVOD presents a great opportunity for studios. However, it is not a magic cure to recoup lost revenues through the global pandemic. It should not be viewed as an alternative to the cinema but as an accompaniment. In response to the global pandemic studios have been able to experiment with theatrical windows and release times, but once things go back to normal, we anticipate that whilst consumer demand remands for new releases, release windows will go back to resemble those pre-pandemic.”