Global Consumer Spending on Entertainment Media to Reach $439B by 2021

Trend fueled by mobile devices, subscription video-on-demand
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HERTFORDSHIRE, UK--Global consumer spending on entertainment content—including TV, video, music and games—will reach $439 billion by 2021, according to a new report from From Futuresource Consulting. The trend, outlined in the U.K. research firm's “Global Entertainment Content Outlook” is fueled by the use of smartphones, and represents a 17 percent increase over 2017 spending levels.

Subscription Video on Demand (SVoD) services, such as Netflix, Amazon Prime Video and Hulu, are rapidly dominating the home video entertainment sector, including DVD, Blu-ray, VoD, SVoD, and EST (Electronic Sell-Through). While this sector was just 13% of consumer home video spending in 2013, by the end of 2017, SVoD alone comprised almost half of the $42 billion spent worldwide.

Global SVoD subscription spending, estimated at $19 billion in 2017, is expected to rise at a compound annual growth rate (CAGR) of 15% between 2017 and 2021, when it will account for 70 percent of total home video spending, largely due to households taking multiple services.

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Yet, SVoD still pales when compared to PayTV, which is a $200 billion global market, with U.S. spending alone accounting for half. The Futuresource report identifies bundling PayTV services with broadband/telephony, the early availability of premium content, and access to exclusive fare like sports as key factors driving its appeal.

For consumers that want to bundle their own TV content, services like Hulu, YouTube, Sony PlayStation, DirecTV and Xfinity had sold 4.8 million PayTV Lite subscriptions in the U.S. by 2017, and the trend continues.

Since offering compelling content is key to driving consumer spending on entertainment video services, the report indicates that mergers and acquisitions (M&A) are on the rise, and cites Comcast’s bid for Sky and Disney’s move to acquire 21 Century Fox as evidence that global media conglomerates are seeking to broaden their audience and market reach. And, all combined, the FAANG (Facebook, Apple, Amazon, Netflix and Google) companies are expected to spend $20 billion on video content in 2018 to gain a competitive edge.