Netflix (NFLX) and Amazon (AMZN) Pay for T.V. content will Overtake UK Box office (NASDAQ)

Netflix (NFLX) and Amazon (AMZN) Pay for T.V. content will Overtake UK Box office (NASDAQ)

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Netflix and Amazon Pay for T.V. content will Overtake UK Box office

On demand TV. services may overtake Box office in the U.K. by 2020; that is just in three years. The revenue growth will be more than 30% in that time to reach a height of GBP 1.42 billion at the turn of the decade.

The rating and consultancy firm called Price Waterhouse Cooper has said that the rise in revenue from the Pay per watch service will edge out the revenue from cinema goers at an estimated GBP 1.41 billion by that time. PwC has been keeping an eye on the cinema industry and streaming services and by now it is obvious that they are mutually exclusive. The rise of streaming means the fall in box office sales; the cinema industry has no doubt consider it a tremendous challenge to counteract the rise of streaming and based on an analysis by PwC it shows no sign of slowing down.

Box Office Won’t Necessarily Die.
Phil Stokes, UK head of entertainment and media at PwC has retort that Box Office won’t necessarily die. He said “The figures do not signal the death of film. Look at the box office performance of films such as Star Wars: Rogue One or Fantastic Beasts and Where to Find Them to see the significant amount of enthusiasm for blockbuster movies out there.”

It seems that only big budget blockbuster films will still have the sway to carry decent profit margins for cinemas and that It may be highly likely that lower budget films will have to look elsewhere.

Stokes further went on to assure that the UK film industry will remain “pretty healthy” in his opinion.

The On-Demand Market
This market According to Stokes will be dominated primarily by Netflix and Amazon. He is estimating that at a rate of around GBP 7.99 per month or GBP 79 per year these two industry giants will be able to dominate two thirds (2/3rds) of the UK streaming market. The rest of the streaming market will be made up of smaller content distributors and competitors such as Apple.

Market Losers
DVD’s and DVD retailers will be in what Stokes calls “Terminal Decline”. The drop is expected to be dramatic from GBP 1.2 bn in 2016 to GBP 500mil by 2021 for the UK market. A greater than 50% drop in revenue. Stokes has made it clear that it is unlikely that DVD and Blu-ray will be able to survive such a drop and that their end is near. The shift will be Digital.