Written by: Tom Edwards
The physical closures enforced by governing bodies in 2020, has had an impact on entertainment industries. This has stemmed from the fact that global theatres and production companies faced temporary closures, forcing individuals to stay at home and watch films or TV shows online. Hence, new streaming video services from prominent providers started to emerge, enticing viewers. Renowned studios like Disney, Warner Bros, and Universal started to compete with Netflix, Amazon Prime and Hulu. This enabled individuals to stay at home, watch videos and premium TV across all platforms. Although according to industry analysists the trend had already been initiated, it is no surprise that the covid-19 pandemic had increased the rate at which these streaming /services had been adopted by consumers.
According to the Motion Picture Association (MPA) within the annual THEME report encapsulating analysis from 2020, the global theatrical and home and mobile entertainment market had reached the lowest figure since 2016 totalling $80.8 billion. Within 2019 there was a decrease by 18%, and there was a rapid decline from $42.3 billion in 2019 to $12 billion in 2020 in theatrical revenue. Therefore in 2020 only 15% of the total revenue globally was attributed to the theatrical entertainment industry which was comparatively low to the 2019 percentage of 43. Hence, the global closures and the necessity for individuals to stay ‘safe’ at home resulted in the reliance of watching digital platforms including video-on-demand, streaming video and electronics. Therefore, it is not surprising that there was increased revenue to a 31% increase equating to $61.8 billion in 2020. From 2019 there are approximately 1.1 billion online video subscribers. This has increased by 2019’s figure of 26%.
On the other hand, physical entertainment revenue comprising of DVD rentals, and Blu-Ray revealed a decline in 2020. In fact, it equated to half of the revenue compared to the 2016 figure of $14.9 billion, resulting in a total of $7 billion in 2020 and accounted for the complete revenue of 9%. Although, digital revenue within the US has been increasing gradually, within 2020 there was a rapid increase in digital media equating to 82% of theatrical, home and mobile revenue compared to the 2019 figure of 55%.
It is likely that within the new normal world a hybrid system of entertainment business models will be used. For example, Warner Bros. and Legendary Pictures released a movie named Godzilla vs. Kong released on 31st March 2021. Within the first two weeks of release, it grossed $69.5 million and globally it reached a gross of over $350 million. Due to this the movie reached a record high gross figure in a year. Simultaneously, the same film was released in May 2021 on HBO Max and was claimed to be the most watch content within one weekend. Hence it is likely that other movies will follow suit and the entertainment industry will take a few years to recover completely.