Consumer spending on home entertainment to soar, but who are the real winners?

posted on Monday, 16th April 2018 by Steve May

home cinema  Hi-fi  Games  Trade 

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Consumer spending on home entertainment content (video, games and music) is expected to soar to US$439 billion globally, by 2021. That’s a 17 per cent rise from 2017, according to new research released by Futuresource Consulting. But not all sectors will grow equally.

"As expected, TV and Video account for the lion's share of this consumer spend," says author Tristan Veale. "However, music has enjoyed a resurgence in recent years and continued innovations within gaming means that both markets are impacting on consumers' spending habits, with smartphones a key facilitator of this tearing up of the entertainment market rulebook."

Both gaming and music will achieve a CAGR (compound annual growth rate) of 7 per cent over the next five years, whereas video is on course for a more modest CAGR of 2 per cent. In its latest Global Entertainment Content Outlook report, Futuresource predicts that SVoD services like Netflix, Amazon Prime Video and Hulu will dominate the overall home video entertainment sector. Back in 2013, SVoD was just 13 per cent of home video consumer spend. By 2017 it had risen to almost half of the US$42 billion spent worldwide.

Market analysis suggests that global subscription numbers will rise at 15 per cent annually between 2017 to 2021. "2017 was the year that annual SVoD spend exceeded worldwide spend on packaged media," adds Veale. "Not only this, but by 2021 SVoD will account for 70 per cent of total home video spend with households taking multiple services instrumental in the growth of this sector."

The early availability of premium content and exclusive content are cited for the boon. "With content remaining as one of the main differentiating factors, spend to secure exclusive rights continues to soar placing added pressure on operator's margins," notesVeale. "Furthermore, this is compounded by the increased competition stemming from a growing number of online platforms that includes Netflix and Amazon and increasingly the likes of Facebook and Twitter, all of which have significant war chests for content acquisitions."

Steve May

Inside CI Editor Steve May is a freelance technology journalist, who also writes for T3, TechRadar, Home Cinema Choice and ERT (amongst others).

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