The new PricewaterhouseCoopers (PwC) Entertainment and Media Outlook 2014-2018 report shows that revenue from online video services is set to overtake box office revenue in 2018. The report actually predicts that box office sales are going to slightly grow this year to $11.4 billion, up from $10.8 billion in 2013, and after being more or less flat since 2009. PwC predicts that box office revenue will keep an annual growth rate of 3.1 percent in the coming years, which means that people will spend $12.5 billion on movie tickets in 2018.
But revenue from subscription video services like Netflix in particular is growing at a much faster rate, from $3.3 billion in 2013 to a projected $10 billion in 2018. Add transactional video services like iTunes and Google Play, where you pay to rent or buy a digital copy of a movie or TV show, and you arrive at a total of $14 billion in revenue in 2018.
This is nothing new — DVDs sales used to outpace box office sales as well. And this will undoubtedly lead Hollywood to pour more resources into supporting these newer services, which is good.
The difference here is that it’s hard to see a world where the box office regains the crown — as it did against DVDs way back when. Hollywood literally cannot raise ticket prices fast enough to offset the mediocre film lineups they continue to pump out.