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Statistics - 2014

Digital Business

The digital home entertainment market (EST and VoD) continues to perform strongly and IHS has forecast that it will grow to A$277 million by end of 2018 off the 2014 base of A$160 million.

Supporting the development of the digital home entertainment market in 2014 was growth in the number of broadband–connected devices, albeit at a slower rate compared with 2013. The installed base of connected devices grew 11% to more than 100 million by year–end 2014 compared with the previous year.

The penetration of smartphones is expected to reach more than 70% in 2014, similar to most western markets. Mobile 4G subscriptions have reached relatively high rates of adoption with 35% of total subscriptions now being sold with high speed mobile internet access.

AHEDA data shows that digital movie rentals (movie VoD) continue to outperform the remaining digital video market growing by 8% to A$83.4 million at the end of the financial year. When combined with movie EST transactions, the total movie genre equates to 75.5% of transactions or 73.1% in revenue at A$119.8 million over the financial year.

TV content consumed on a rental basis (TV VoD) remains niche in part because many major titles are only offered as EST. TV VoD has less than 0.5% of the digital video market in terms of transactions despite growing by 29.3% in 2014 and 46.5% in consumer revenues year–on–year, ending the year on A$0.6 million. TV EST transactions in H1 2014 fell by 12% year–on–year but consumer revenues grew by 5%, although this was a decline on the previous year’s growth of 14%.

Although TV content transactional volumes are significantly lower than movies, the purchasing of complete series of TV shows as a single transaction has meant that the average revenue per transaction is higher on average. This has resulted in movies share of revenues in the digital video market being 1.5 percentage points lower than in terms of transactions.

AUSTRALIA: MONTHLY CONSUMER TRANSACTIONS (M)

The AHEDA data on consumer pricing is interesting as it shows that movie VoD prices decreased by a total of A$1.22, a decline of 21% and that movie EST prices show stark fluctuations throughout the year due to seasonal promotions.

There was three consistent periods of decline appeared throughout the calendar year: late June into early July, September, and December. The graphic below shows that Australian consumers are well served by international standards on average pricing of digital content with some of the lowest movie VoD prices in the world.

2014: AVERAGE TRANSACTIONAL MOVIE PRICE (US$)


AHEDA data also shows that the Pay TV–VoD market grew steadily in 2014 in both transactions and revenues. Revenues increased by 10% and transactions by 11% with new release titles remaining the dominant genre accounting for more than 90% of the market. IHS predicts on the back of the AHEDA data that this market will grow at a compound annual growth rate of 5.6% between 2014 – 2018.

Physical Business

In 2014, the physical DVD and Blu–ray retail channel sold nearly 54 million discs, for a total value of A$0.98 billion. This represented a 10% year–on–year decline in value, with an equal rate of decline for both the DVD and Blu–ray formats. Volume was also in decline, with 2014 being the first year that the Blu–ray format recorded a drop in volume.

Blu–ray generated A$146 million in value in 2014, with nearly 7 million discs sold. The Blu–ray format registered a decline in volume for the first time in 2014, down 11% year–on–year. This was also the first time that the Blu–ray decline was equal to DVDs in both value and volume. Blu–ray generated 16% of the market value and 14% of the market volume in 2014, reflecting the slightly higher price of the average Blu–ray disc.

The TV Series format grew to represent 15% of all Blu–ray sales. This is still a low percentage of overall TV Series sales, but it reflects a steady growth in sales of TV Series on the Blu–ray format. The titles that perform well on Blu–ray are movie titles from the action, adventure and sci–fi genres with TV series, while behind the DVD format, is also growing in popularity on Blu–ray.

TV series again has seen strong category growth on physical disc sales with TV series accounting for 36% of value in 2014. What is also interesting, but perhaps not surprising, is that certain TV series generated a significant portion of the TV disc sales with Game of Thrones seasons 1 to 3 taking out the top 3 positions on best selling TV titles in 2014. It is clear from the data that catalogue movies struggled in 2014 with GfK attributing this to “catalogue fatigue” where consumers have already populated their libraries.

Physical disc sales will continue to generate over 80% of the total value of the industry and given the strong reliance on TV series and new release movies on DVD and BD the industry should have a strong retailing year in 2015 given the slate coming such as: Hunger Games, Terminator, Mad Max, Star Wars, Jurassic Park, Avengers franchises along with another series of Game of Thrones.

Hardware trends

The chapter on hardware trends gives pointers tohow consumers may behave in the future based on device preference for watching video content. Encouragingly, TVs remain the key device for watching video entertainment and act as a hub for a myriad of other devices. GfK analysis and data shows that video entertainment is consumed nearly 60% on the TV, followed by PC at 27% and mobile devices (tablets and smartphones at 14%).

Top 5 DVDs (MAY)

1. AQUAMAN
2. INSTANT FAMILY (2018)
3. THE MULE (2018)
4. STORM BOY (2019)
5. BOHEMIAN RHAPSODY (2018)
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Digital Content Guide