Global OTT revenues to overtake box office returns in 2019

A tipping point in the global entertainment industry is set to occur in 2019 with revenues from subscription over-the-top services exceeding cinema box office, according to a study from Ampere Analysis.

In the US, subscription OTT revenues actually surpassed theatrical revenues in 2017, and the UK is expected to follow suit by the end of 2018. In China the tipping point almost certain to happen in 2019.

Attempting to explain the trend, Ampere questions whether Cinema tickets were too expensive and depressing attendance and thus overall takings. In nine out of 15 markets surveyed by Ampere — Australia, France, Germany, Japan, Netherlands, Sweden, Turkey, USA and UK — the average price of a cinema ticket was higher than one month’s subscription to an SVOD service. In Mexico, a market with high cinema attendance, Ampere found that the average price of an SVOD service was almost twice as high as the price of a cinema admission. The two markets with the lowest cinema attendance were found to be Japan, where cinema tickets are almost double average SVOD price, and Germany, where cinema tickets are around 50% higher.

Yet in all the markets surveyed, SVOD subscribers were found to be more avid cinema-goers than non-SVOD subscribers, and in nine of Ampere’s 15 markets covered in the Consumer service — Brazil, Japan, Mexico, Netherlands, Poland, Spain, Sweden, UK and USA — SVOD subscribers say that they go to the cinema at least twice as frequently. In Japan SVOD subscribers visit the cinema more than three times as often as their counterparts, even where the average SVOD subscription cost is half of the price of a cinema ticket.

“Our analysis…reveals that although there are differences in the cost of cinema attendance by country, there’s clearly an appetite for content amongst some consumers whether that be on the big screen, or a smaller one,” commented Toby Holleran, senior analyst at Ampere Analysis. “The key for cinema is to understand that while SVOD subscribers are more avid cinema goers, this may not always be the case. Therefore, the shared experience of watching a film on the big screen must remain an enticing —and realistically priced—one.”