|In five years VR will play much larger role|
Choice is good and distribution channels feed one-another - consumers will often go to the cinema and then purchase the video for re-viewing. Cinemas still remain king in terms of 'quality viewing' but home entertainment has seen huge improvement in content presentation. To compare, for the first nine months of this year, home entertainment spending totaled $13.1b vs.$8.3b at the box office. Of the $13.1b home number 60% represented revenue from streaming services with only 7% from physical disc sales.
Advances in technology and a wide choice of viewing options have placed the consumer firmly in command. They expect quality, simplicity of use, and great value from their movie entertainment. Although the bulk of viewing is from well known streamers like Netflix, Amazon Prime, Hulu, many others are now entering the marketplace. CMG recently posted on a new on-line movie service from the Turner Movie Classic channel called FilmStruck - which for $10.99/month serves up a menu of classic, foreign, and indie films. Another is Brown Sugar, a service from Bounce TV, that concentrates on '70s-era blaxploitation and cult films for $3.99/month - there will be many others to come.
CMG believes that within five years the sale of video discs will be extinct, as more and more consumers will become less interested in having any form of physical ownership of movies because they will be able to access titles on a streaming service. Virtual reality (VR) will also be playing a much larger role in five years.
Cinemas need to maintain their superior presentation qualities while broadening and enhancing their services. To maintain growth in the face of increased competition, cinemas will be required to improve their sound, expanded concession selections, and seriously consider the introduction of the 4k digital projection format that delivers four times the resolution of current 2k projectors. 4k will also find its way into the home.
The battle is on and it's going to be waging for some time to come. There will be winners and losers and the survivors will be those that recognize their shortcomings and address them. The key being to always keep the consumer center-stage.