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Global revenues from subscription streaming video services will overtake the total worldwide box office next year, a study published Monday by Ampere Analysis forecasts.
Global subscription revenue is expected to top $46 billion, compared with just under $40 billion in worldwide theatrical revenue, it predicts.
Revenue from subscription VOD services in the U.S. already outpaced the domestic box office take in 2017, and the U.K. market is expected to follow suit by the end of this year. China, the world’s second-largest theatrical market, will see the SVOD business blow by the box office in 2019, the study finds. SVOD services, led by Netflix and Amazon Prime, are exploding across Western Europe, while local box office remains stagnant.
Ampere’s study suggests that one of the reasons behind the shift may be that movie tickets are too expensive, especially when compared to readily available, low-cost monthly SVOD services.
Across the 15 markets surveyed in the report, Ampere found that the more expensive cinema tickets are, the lower the cinema attendance, and vice versa. Mexico, where the average movie ticket costs just $2.50, averages 3.3 cinema admissions per capita per year. In pricey Scandinavia, where a single cinema ticket costs $13 or more per visit, the average is less than one movie visit per person per year. Cinema-loving France is somewhere in the middle, with French respondents reporting an average of 1.5 movie visits per year, at a cost of just under $8 per ticket.
Comparing the cost of going out to the movies with staying home to “Netflix and chill,” the study found that in nine out of 15 markets, including in the U.S., U.K., Germany and Japan, the average price of a cinema ticket is higher than a one-month subscription to an SVOD service. The gap was even bigger in the two markets with the lowest cinema attendance: In Japan the average cinema ticket cost almost double that of the average monthly SVOD subscription. In Germany, it is around 50 percent more expensive. In Mexico, in contrast, the average monthly price of an SVOD service is almost twice as high as the price of a cinema admission.
Toby Holleran, a senior analyst at Ampere, noted that in all the markets surveyed, streaming video subscribers were more avid cinema-goers than non-SVOD users. In Japan, SVOD subscribers report going to the cinema more than three times as often as their non-SVOD counterparts.
“There’s clearly an appetite for content among some consumers whether that be on the big screen, or a smaller one,” Holleran said. “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.”
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