German Home Entertainment Market Soars Past USD 10 Billion In 2018

Germany’s box office is coming off a bad year preliminary figures suggest a double-digit drop in admissions and revenue — but the country’s home entertainment market is stronger than ever.

A new report by London-based Futuresource Consulting estimates the German video market grew a healthy 6 percent last year, with spending topping USD 10.3 billion (€9 billion).

Subscription video-on-demand services led by Netflix and Amazon Prime are the main drivers of growth, with more than 10 million German households — a quarter of the market — now signed up to at least one SVOD service. SVOD revenue is set to double in the 2017-2019 period and, according to Futuresource’s forecast, will top USD 1.14 billion (€1 billion) by 2020.

“Amazon Prime Video remains the market leader, but Netflix continues to make strong gains, with 50 percent growth of subscriptions in 2018,” said Tristan Veale, a market analyst at Futuresource. “The two services are mostly complementary, and there is room for both to thrive (in the territory).”

Veale notes that Germany is also bucking the trend in many European pay TV markets, which “are seeing stagnation or even declines. However, in Germany there is increased dynamism in the market, with an increased number of providers offering low cost, “pay TV lite” services.”

Both pay TV and subscription VOD in Germany have been helped by the rollout of Internet-connected smart TVs, which now account for 82 percent of the market, one of the highest levels in Europe. Veale calls smart TVs “the springboard to premium digital video,” noting that “these devices are central to the relationship that German consumers have with digital video. As Amazon Prime and Netflix are two of the most prominent services on television sets, this ownership is clearly translating into uptake, with almost half of German Netflix users watching the service directly on a smart TV.

The report, published Wednesday, also puts to rest one of the enduring myths of the German home entertainment market: that German consumers have a particular fetish for physical DVDs and home video. While packaged media accounted for 90 percent of consumer spend on home entertainment video just five year ago (excluding pay-TV subscriptions), by the end of 2018, the figure fell to 50 percent, the study found. The MegStar Wars: The Last Jedi and The Equalizer were among the home entertainment hits in Germany in 2018.

While the digital sell-through and rental market is growing in Germany, the report says it will not make up for the steep decline in the analog business.

“By 2021, we expect consumers to spend more on renting or purchasing digital movies and TV shows that they will on DVDs and Blu-rays,” says Veale. “However, transactional home video sell-through and rental is a declining market segment overall; spend is expected to fall by an average of 9 percent per year between 2018 and 2022.”―Hollywood Reporter

Share this:

Leave a Reply

Your email address will not be published. Required fields are marked *

Stay Updated on Broadcast and CableSat.
Receive our Daily Newsletter.