Why Hollywood Can’t Ignore Digital Distribution

/ Aug 27, 2014

US_OnlineVideo

Ignore, for a second, about how more and more producers are creating content for digital platforms. Hollywood studios and networks — those still generating most of their revenue from traditional films and TV shows — are also increasingly adapting to digital, because they have to.

If you need just one statistic to explain why, how’s this: Revenues from US subscription VOD streaming services like Netflix and Amazon topped $1.9 billion in the first half of 2014, representing a 26.17% increase from the previous year. Revenues from electronic sell-through services like iTunes totaled $671 million, growing 36.84% since 2013.

emarketer digital distributionThese numbers (and the chart) are courtesy of eMarketer, which pulled data from a report released by the Digital Entertainment Group earlier this month.

By itself, the data shouldn’t be surprising. Netflix has been reporting higher subscriber and revenue numbers for quite some time now, because consumers are increasingly flocking to digital services to discover or rewatch films and TV shows.

What makes all this more compelling, though, is how digital compares to the more traditional means of distributing and redistributing content. According to Digital Entertainment Group, SVOD and EST were the only two formats to see a positive change in revenue from the previous year. Brick and mortar? Down 32.68%. Rental excluding video-on-demand? Down 14.55%. Rental with VOD included? Negative 11.4%. Traditional VOD by itself? Minus 5.63%.

This is why you’re seeing initiatives like the UltraViolet digital locker service, or TV’s attempt at “TV Everywhere,” or studios experimenting with multi-platform release models for some films.

Interestingly enough, this is also why content costs continue to rise for digital outlets like Netflix and Amazon, and why both have, as a result, ventured into creating original programming.

More and more people are watching movies and TV shows. But less and less are interested in always watching this content the way they historically have. It’s one of the reasons why box-office numbers have been down this summer, and why the 2014 upfront market was pretty weak.

Give viewers what they want when they want it — it’s a popular refrain in the industry, but as the numbers are beginning to reflect, it’s also true.

Tags: , , , , , ,


Comic-Con Logo

Five Virtual Reality Experiences At Comic-Con

 
YouTube Logo

YouTube Releases Viewership Data for Political Convention Live Streams

 
Maker Studios Mickey Disney

Disney Not the Happiest Place on Earth for Maker Studios

 
Amazon Logo

Amazon’s Cash Flow Increases 42% to $12.7 billion; India...

 
Industry Tickets Selling Fast!
Click above to lock in your registration for VidCon 2015!
 
Kevin Hart Laugh Out Just for Laughs

Kevin Hart Options 10 Pitches for Laugh Out Lound VOD Channel

 
Notorious B.I.G. Turner TBS

The Notorious B.I.G.’s Raps Coming to Life in TBS Digital Series

 
Fullscreen Keeping Score

Fullscreen Going to Olympics with ‘Keeping Score’...

 
Gilmore Girls Netflix

Netflix TCA Wrap: New Motown Series, 9 Premiere Dates (incl....

 
Life is Strange Legendary Digital Studio Square Enix

Legendary Digital Studios Adapting ‘Life is Strange’...

 
Facebook Thumbs Up Like

Facebook Q2 Report: 1.7B Monthly Users, $6.44B in Revenue,...

 
PewDiePie 3-2-15

YouTuber Pew Die Pie Made $8M in 2015

 
Miss 2059 Origin Story

Anna Akana’s Origin Story for Her Go90 Series ‘Miss...

 
dailymotion

Dailymotion in Critical Condition One Year After Vivendi Acquisition

 
Warner Music Group WMG Vadio

Warner Music Group Closes Deal with Vadio (Not Vevo)

 
Abrams Artists Entrepreneur Magazine

Why Abrams Artists Opened an In-House Digital Production Studio

 
Kevin Conroy MGM

MGM Hires Univision’s Kevin Conroy as President of Digital...

 
Telemundo

YouTube and Telemundo Open Pop-Up Space in Miami

 
DigitalCabana_ep2_VideoInk_300x250

Digital Cabana — Peter Csathy and Jocelyn Johnson Talk...

 
AwesomenessTV Logo Awesomeness

AwesomenessTV Targeting British Youth with ITV Deal

 
American Crime Story FX Netflix

Netflix Gets ‘Blame,’ ‘American Crime...

 
Verizon Yahoo

It’s Official: Verizon Buying Yahoo for $4.83B in Cash

 
Tiesto

Summer Music Festivals and Branded Content

 
Al Roker

Roker Media Partners with HooplaHa on Live Streaming Originals Slate

 
Campus Insiders Twitter

Twitter to Live Stream 300 College Sporting Events via Campus...

 
Comic-Con Logo

Circa Teams with Defy Media’s Clevver for Comic-Con Coverage

 
International Drone Racing Association ESPN

Drone Racing Gets Dedicated Streaming Channel Drone TV

 
DavidLoker_VideoInk_300x250

Amazon and Netflix Alum David Loker Heads to Ayzenberg

 
AndrewGraham_VideoInk_300x250

CAA Grabs Andrew Graham from Big Frame; Retains Clients as Agent Rep

 
Machinima Logo

Machinima Takes China with Sohu Partnership

 
Periscope is Twitter's live-streaming video app

Periscope Adding New Watch and Discovery Features

 
Transformers Combiner Wars Machinima

Machinima Reveals Voice Cast & Trailer for...

 
AmazonBox

Amazon Unveils 2016 Comedy Pilot Season

 
Ana Kasparian The Young Turks

The Young Turks’ Ana Kasparian Talks Puke, Vitriol &...

 
Algorhythm New Form Digital Above Average Craig Benzine WheezyWaiter

What Above Average Plans to Do with $15M in Funding from Turner...

 
Adam Sandler Ridiculous Six Netflix

Adam Sandler Teams with Oscar-Winner Jennifer Hudson for Netflix...

 
VideoAd_1

Video Is Not The Answer (But Great Video Might Be)

 
Twitter

Twitter and NBA Partner on Two New TV-Style Shows

 
BuzzFeed Tasty

BuzzFeed’s ‘Tasty’ Stays Atop Cross-Platform...

 
Reelio Logo

Reelio Greenlight Serves Up Brand-Ready Influencer Project Database

 
Kalel Kin Community

Kin Community Coming to Australia