Online video poised to overtake physical home entertainment market in Ireland
Video-on-demand revenues will reach €48m by 2021, as DVDs continue ‘terminal’ slide
Princess Margaret (Vanessa Kirby) unites with Antony Armstrong-Jones (Matthew Goode) in Netflix’s “The Crown”. Online video revenues in Ireland will soon overtake those from physical home video, according to PwC.
Online video streaming revenues will overtake the physical home video market by 2019 in Ireland, having already done so globally this year, a report by accountancy firm PwC suggests.
In its latest global entertainment and media outlook, PwC forecasts that online video revenues in the Irish market will reach €48 million by 2021 as more subscription services launch and improve their offering.
Subscription video-on-demand – or monthly payments for access to services such as Netflix and Amazon Prime Video – will account for three-quarters of the revenues in the online video market segment, PwC said. They will dominate over transactional video-on-demand (once-off payments for movies or pay-per-view events).
Although neither Netflix nor Amazon publishes the number of subscribers they have in the Irish market, both services are understood to be growing, with Netflix’s more established position boosted this year by Virgin Media’s promotion of its service on its platform.
Amazon Prime Video, which only launched in Ireland a year ago, is marketing an introductory offer through direct mail to householders. The company intends to popularise its service by bidding for sports rights, adding to the tennis tournament rights it has recently acquired.
In another sign of market change, Sky Ireland also marked 2017 by launching its Now TV streaming service.
Globally, online video revenues are projected to reach $36.7 billion (€31 billion) by 2021, by which point the “terminally declining” market for DVDs and Blu-ray discs will have dropped to $13.9 billion (€11.8 billion).
“To thrive in a market that is increasingly competitive and dependent on personal recommendations, companies must develop strategies that engage, grow and monetise their most valuable customers – their fans,” said Amy Ball, a partner in PwC Ireland’s entertainment and media practice.
The wider Irish entertainment and media industry will grow 3.3 per cent annually to 2021, PwC forecasts, with the expansion – equivalent to revenues of €4.8 billion – mostly fuelled by rising revenues for telecoms companies and growth in digital advertising.
Internet access is the largest revenue stream in the Irish market and will grow 33 per cent to €1.3 billion by 2021.
PwC’s forecasted rate of growth for the Irish market for 2017-2021 is lower than the 3.8 per cent annual growth rate it projected this time last year for the 2016-2020 period. Growth in the global market is also expected to outpace future gains in the Irish market.
The accountancy firm had no good news for the Irish newspaper market, predicting that print newspaper circulation will plummet further from 525,000 copies a day in 2016 to 392,000 by 2021, while total revenues will drop from €571 million in 2016 to €441 million in 2021.
“We see traditional newspaper publishing continuing to lose ground with a decline of 5 per cent annually over the period,” said Ms Ball.