U.S. Homes Spent $26.5B on Streaming, Digital Entertainment in 2020, Per DEG

Streaming platforms
(Image credit: Ranker)

LOS ANGELES—Streaming subscriptions and digital transactions of content were the driving forces to a big 2020 for U.S. home entertainment spending, per a new report from The Digital Entertainment Group.

DEG found that consumers spent more than $26.5 billion on digital entertainment purchases (EST), VOD and subscriptions in 2020, a 32% increase from 2019’s numbers. Obviously, the COVID-19 pandemic and subsequent stay-at-home orders had an impact on these numbers.

Subscriptions to streaming services was the biggest driver, with 2020 seeing a 37% increase in streaming revenue, thanks in part to the addition of new services like HBO Max and Peacock. EST and VOD purchases and rentals were up 16% and 18%, respectively, from 2019.

Just looking at the fourth quarter of 2020, when the pandemic hit its ninth month, total spending on digital entertainment services rose more than 27%, while spending on subscription streaming went up 33% from Q4 2019.

Looking at digital spending more specifically, rentals through internet services saw a 43% growth for the full year and 33% in the fourth quarter alone, driven by consumers transitioning from legacy cable and satellite services, DEG says.

TV EST grew 39% in the fourth quarter and 37% for the full year. Digital rentals of movies, meanwhile, grew more than 25% in Q4 and 40% for the year; digital purchases of movies grew 6%.

While not able to provide full results for premium video-on-demand (PVOD) content, DEG says early insights indicate strong results. Universal Pictures, which struck a deal with movie theaters to have their new releases go to PVOD after a 17-day exclusive window, said they earned more than four-times expected digital home entertainment revenue because of its PVOD offerings. The studio estimates that it earned $500 million in 2020 from total in-house consumer spend on its 18 titles.

DEG also reported on physical home entertainment formats, which when combined with digital resulted in about $30 billion, a 21% increase from the $25 billion spent in 2019. Just in the fourth quarter of 2020, consumers spent $7.8 billion on both digital and physical home entertainment, up by more than $1 billion from Q4 2019.

DEG’s full report is available on its website