• by Karlene Lukovitz  @KLmarketdaily, November 14, 2022

Despite general inflation and significant price hikes by some streaming services in recent weeks, U.S. streaming subscription revenue rose 17.3%, to $7.7 billion, in this year’s third quarter, according to data from Digital Entertainment Group (DEG). 

Subscription revenue was also up 17.5% year-to-date through Q3, to total $22.3 billion. That growth was only slightly down from a YTD increase of 19.5% at the end of last year’s third quarter. 

Total spending across digital entertainment formats, including subscription video-on-demand (SVOD) subscriptions, video-on-demand (title rentals) and digital purchases of titles (electronic sell-through/EST), rose 13.1%, to $9.1 billion, in Q3 compared to the year-ago quarter.

Growth in the first nine months of 2022 was more than 12%, with consumer spending approaching $27 billion. 

The growth has been driven by the continued growth of SVOD, the increasing quality of theatrical releases, and a favorable shift in windows for transactional formats, according to DEG. 

VOD rental revenue actually saw an 11% decline in Q3 and a 12.5% decline YTD. 

Fueled by stronger release slates and favorable release windows, EST purchases of theatrical titles rose more than 27% in Q3, and 21% in the first nine months. 

This year, some studios have begun pricing new theatrical  releases for sale (EST) as well as rental (VOD) in the premium window, and others have stopped releasing new movies day-and-date to theaters and their direct-to-consumer streaming services, bolstering demand in transactional windows.

The top three EST titles in the first nine months—"Top Gun: Maverick,” “Spider-Man: No Way Home” and “Jurassic World Dominion” — all had later windows to streaming. 

Box-office spending on the titles released to the home in Q3 jumped more than 85% from the year earlier period.

The share of box-office value where titles were released simultaneously on SVOD and transactional decreased from 32% in the quarter and 19% year-to-date, according to studio reports.

The share of box-office value that was released using a premium model increased from 37% in Q3 2021 to 45% in Q3 2022.

The surge in theatrical releases also benefited sales of physical formats, with spending on 4K UHD Blu-ray titles growing 33% for both the third quarter and the first nine months. The top 4K UHD titles of the third quarter include some of the year’s biggest titles overall, led by “Spider-Man: No Way Home.”

The top titles rented and purchased by consumers in Q3 “demonstrated viewers’ appetite for franchise blockbusters coming from theaters,” notes DEG.

Among the top transactional (EST and VOD) titles in Q3 were: “DC League of Super-Pets,” “Dog,” “Dr. Strange in the Multiverse of Madness,” “Elvis,” “Everything Everywhere All at Once,” “Jurassic World Dominion,” “Minions: The Rise of Gru,” “Sonic the Hedgehog 2,” “Spider-Man: No Way Home,” “Thor: Love and Thunder,” “Top Gun: Maverick; Where the Crawdads Sing” and “The Unbearable Weight of Massive Talent.”