The number of subscriptions to online video streaming services around the world reached 1.1 billion in 2020, according to data released by the Motion Picture Association on Thursday—a new milestone marked amid the Covid-19 pandemic that kept people locked down, seeking their entertainment at home.
Meanwhile, global box-office revenues plunged by more than $30 billion in the year to $12 billion, as movie theaters were shut in the U.S. and in other parts of the world, according to the association. The drop comes after box-office revenues reached a record $42.3 billion in 2019, the MPA also said. And China passed the U.S. last year as the top country for box-office revenues, it said.
Moviegoing in the Pandemic
The shift in consumer and Hollywood’s behaviors last year spurred historic growth at companies like Netflix Inc. NFLX -3.55% and Walt Disney Co. DIS -1.22% ’s streaming services. As people turned to the digital options available to them at home and on mobile devices, streaming subscriptions rose 26% from the previous year. In the U.S. alone, the number of streaming subscriptions rose by 32% last year to a total of 308.6 million, the MPA said.
Even now, as movie theaters in many parts of the world have reopened, the direct-to-consumer streaming model is the dominant growth strategy at Hollywood’s biggest studios and at the Silicon Valley technology giants that compete with them. The world’s largest streaming service, Netflix, recently surpassed 200 million subscriptions globally. Disney boasts more than 100 million subscribers to its Disney+, which isn’t even two years old.
While box-office revenues sank globally, gains in digital home entertainment revenues helped offset those losses, according to the MPA. Revenues from direct-to-consumer offerings, which includes streaming and online rentals, jumped to $61.8 billion last year, up from $47.2 billion in 2019, it said.
Mirroring the industry at large, the substance of the Motion Picture Association’s annual report has evolved in recent years as the revenues generated by digital, direct-to-consumer distribution now dwarf global box-office revenues. In 2019, the MPA, which is considered the top advocate for Hollywood’s biggest movie studios, welcomed Netflix to its ranks even though the company doesn’t rely on movie theater ticket sales as part of its business model.
With the number of subscribers and streaming services swelling, Hollywood is churning out more content, especially episodic series, which engage customers for longer than feature films. In 2020, the number of scripted and unscripted series created by American production companies and distributed to online platforms soared to a total of 537 shows, compared with 381 the year before, the MPA said.
As new streaming services enter the U.S. market— Comcast Corp. CMCSA -2.70% and ViacomCBS Inc. VIAC 3.93% have also launched platforms— Amazon. AMZN -3.01% com Inc. and AT&T Inc.’s T -0.20% HBO Max are following in Disney and Netflix’s footsteps by ramping up efforts to boost their share of international markets.
During the past year’s widespread lockdowns, some of the nation’s biggest movie theater chains struggled to stay afloat as box-office revenues in the U.S. and Canada plummeted to $2.2 billion in 2020, down from $11.4 billion in 2019, according to the MPA report.
In 2020, China surpassed the U.S. for the first time as the world’s top box-office market, generating $3 billion in ticket sales, the report said.
U.S. theaters are reopening in key states like New York and California, but so far attendance has been sluggish as many Americans appear hesitant to return to indoor public spaces en masse.
As of Friday, the world’s largest theater chain AMC Entertainment Holdings Inc. AMC 2.77% says it will have 98% of its U.S. theaters operational. That is a big turnaround after the pandemic nearly forced the company to file for chapter 11 bankruptcy protection.
Hollywood’s biggest studios are hoping moviegoing will rebound this summer. Would-be blockbusters like Disney’s Marvel film “Black Widow,” and the latest installment of the Fast & Furious franchise, “F9”—distributed by Comcast’s Universal Pictures—will test U.S. moviegoers’ willingness to once again head to the multiplex. “Black Widow” is slated for May while “F9” is out in June.
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