The rise of streaming services and its impact on box office revenue

Understanding the Changing Landscape of Movie Consumption

We have been witness to the fact that the landscape of the entertainment industry had undergone a sea change. The entertainment industry had completely revolutionised. Streaming services like Netflix, Hulu, and Amazon Prime Video, have outdated the traditional cable and movie theatres and there has been a significant reduction in their viewership. In this article, we at Moris Media, India’s leading digital marketing agency will examine the rise of streaming services and its impact on box office revenue.

Rise of Streaming Services:

The streaming platforms like Netflix, Amazon Prime, Hulu, Hotstar etc, are providing cheap options to the viewers, with a huge amount of content to watch. This has completely changed the way entertainment industry operates. Movies and TV shows has seen a tremendous decline in their viewership over these years. Streaming services offer a wide range of content to its viewers and too just by sitting at the comfort of their homes. Anyone can each unlimited shows just by sitting at their homes, in their comfort zones. They do not need to pay separately for the shows.

As per a survey report shared by Deloitte, the number of families having at least one streaming subscription has gone up to 55% at present, which was just 10% in 2019. This has really propelled up box office numbers in the last few years, specifically in terms of revenue earnings.

Impact on Box Office Revenue:

There has been a tremendous drop in the box office revenue. A report was shared by Motion Picture Association of America (MPAA) and according to that report the Box office revenue has reduced by 4% in 2019 to $11.4 billion and the viewership reduced by 4% and came down to 1.2 billion. This trend is expected to continue as more people opt for streaming services over traditional movie theater attendance.

There could be many factors responsible for this drop: 

First, these streaming services provides a lot of convenience to their viewers. The viewers can watch whatever they want to watch and there is no time or place constraint to it. There is no need to fix up your schedule as per the movie release or the time at which the shows will be broad casted. Even while travelling, viewers can enjoy watching their favourite shows in their smart phones, utilizing the travel time. Movie theatre attendance has decreased as a result of this convenience aspect, especially for mid-budget films that do not have the same attraction as big-budget blockbusters.

Second, increased piracy brought on by the growth of streaming services has reduced box office receipts even further. Viewers no longer have to pay to see the newest films and TV series thanks to the existence of illicit streaming websites. This had led to the reduction in the box office collection, especially for smaller independent films that are more vulnerable to piracy.

Thirdly, there is more competition for viewers because streaming services have a broader selection of content than conventional movie theatres. Viewers have access to a wider variety of content than what is provided in movie theatres because to streaming services like Netflix and Amazon generating their own original films and TV shows. Movies usually don't have the same wide approach as these other franchise pictures do, so they are not able to compete with them on these terms.

Future Implications:

Future predictions indicate that streaming services will only grow, with a major effect on box office revenues. Movie theatre attendance and box office receipts are projected to continue declining as more individuals choose the comfort and affordability of streaming services. But despite of all of these advantages, it still cannot beat the movie- going experience. People go out to watch movies not just for the sake of watching the movie, but it’s a good outing activity for them.

The impact of streaming services has prompted movie theatres to up their mantle in terms of benefits being transferred to draw in moviegoers. Unique experiences that are offered now include  luxury seating, advanced sound systems, and food and beverage options. As the technology is advancing, there are various other experiences that attract the customers like: virtual reality and augmented reality, 3D, 4D etc. These technological advancements have helped in attracting more viewership for the movies.

The old entertainment industry paradigm has been upended by the growth of streaming services, which has also significantly affected box office receipts. As more individuals choose to view films and TV episodes from the comfort of their homes thanks to the affordability and convenience of streaming services, movie theatre attendance and income are falling.

However, with the ability to adapt and offer unique experiences, movie theatres can still compete with streaming services and provide an immersive entertainment experience. The need of the hour is to create an appropriate balance so that both the conventional movie theatres and streaming services can co-exist and not intrude too much into each other’s space. While streaming services offer convenience and a broader range of content, movie theatres provide a unique social and immersive experience. It is also necessary for the cinema business to adapt to the changes going on. They should try to keep up with the streaming services as they provide wide variety of options for their viewers. By keeping up with the latest trends and following the digital era, even the traditional industry can flourish.