STREAMING SERVICES Netflix and Amazon Prime Video are set to overtake revenues from cinemas in just three years.
A new study by PwC says that, by 2020, video-on-demand services will grow by over 30 per cent, reaching £1.42bn, nudging out the multiplex at £1.41bn.
While the rise of streaming seems unstoppable, it doesn't necessarily mean the end of cinema. Recent Julian Barratt comedy 'Mindhorn' was simultaneously released to the UK cinema, but straight to Netflix in the US, while cult programmes such as Doctor Who often get premieres on cinema screens.
Then there are linear shows such as AMC's Better Call Saul that are put straight onto Netflix outside the US, giving them first run rights.
Then there are deals like the one Netflix has signed with Adam "bloody" Sandler for films that will go straight to Netflix and we're powerless to stop it.
Phil Stokes at PwC told the Guardian that the state of the cinema industry in the UK is "pretty healthy", citing the box office success of the Star Wars franchise as one example of why there's continuing demand for the big screen.
But the news is slightly worse for the likes of Virgin Media and Sky, with the expectation that Netflix and Amazon will command two-thirds of the streaming market. Virgin Media and Sky will, however, continue to excel at one-off "Box Office" events such as Boxing matches.
Meanwhile, older physical formats DVD and Blu-ray are predicted to be in "terminal decline" dropping from the current £1.22bn in 2016 to £533bn by 2021. The tipping point where streaming overtakes physical media is predicted for this year, but other reports suggest this has already happened.
This is particularly bad news for the high street, who have no means of capitalising on streaming, and so far companies like Tesco (Blinkbox) and Sainsburys Entertainment have failed to attract more than a small market share. The former is now in the hands of TalkTalk who are in a somewhat better position to capitalise on it, but both operate a "buy or rent" model, as does Google Play, rather than a one-off subscription.
Some linear channels are beginning to show early series of original streaming programming like recently leaked Orange is the New Black and Mr Robot, but audiences are relatively small compared to those subscribing to Netflix and Amazon. µ
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