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21 January 2021

Nielsen’s D2C movies marks another death knell for cinemas

In response to OTT platforms seizing blockbuster releases, Nielsen has announced that it will start measuring direct-to-consumer (D2C) movie releases as a standalone category. The last thing that movie theatres needed was yet another badge of legitimacy for this new distribution format, and the fact that a typically slow Nielsen has cottoned on so quickly is just another loop in the noose.

The news is further evidence of the wake-up call that the pandemic has provided Nielsen. Agile and accurate measurement of media consumption has never been more vital, and as other stories in this week’s issue have highlighted, many have got their claws out to challenge its slow and blunt maneuvering.

Confusingly, Nielsen has chosen the acronym TVoD (theatrical video on demand) for this category. Not only has this created a division in terminology, as premium/paid video on demand (PVoD) is already used by many to describe D2C movie releases, but TVoD already exists as transactional video on demand, although a quick search of our archives would suggest that this term has nearly died over the past year.

At least ‘theatrical’ (TVoD) provides better delineation from ‘subscription’ (SVoD) than ‘paid/premium’ (PVoD) did. To avoid any confusion, the rest of this article will use TVoD according to Nielsen’s definition.

Our industry should hurry up and decide on an acronym soon, as the content ecosystem has been kicked into overdrive since AT&T opted to premiere blockbusters on HBO Max in December. Four of the ‘Big Five’ Hollywood studios own SVoD outlets (Sony is the exception), meaning that TVoD is very quickly becoming an entrenched channel of distribution that will stick around after the pandemic, especially if ailing box office revenues do not make a recovery.

Nielsen’s new service will shed light on TVoD’s impact upon consumer viewing behaviors, promising data on viewers’ age, gender, ethnicity, and geography. This data will be valuable across the media food chain, as studios, cinemas, broadcasters, and OTT platforms will want granular statistics on which demographics are embracing TVoD, and at what speed they are doing so. Content owners will then also be able to compare how TVoD is racking up against AVoD and traditional SVoD.

In the press release for the announcement, Nielsen noted that streaming now accounts for 23% of total TV usage among OTT capable homes, up from 21% year on year. When considering that the past year has undoubtedly grown the amount of OTT capable homes, the impact of this growth in real terms is even greater.

“As this unprecedented pandemic continues to influence consumer behavior, perhaps even through a prolonged state of recovery waves, being able to measure and help clients appropriately monetize new revenue streams has never been more crucial,” said Scott Brown, GM of Audience Measurement at Nielsen.

So what do we know so far about the value of TVoD services? Some surveys from Screen Engine have indicated that the pull of D2C movies is far from negligible, especially in an age of subscription fatigue.

According to the research firm, 23% of those that watched Wonder Woman 1984 on HBO Max had specifically signed up to the service to do so, while 19% of subs on the service said they would have cancelled their subscription if it were not for that release. Another survey found that 13% of those watching Pixar’s Soul on Disney+ had subscribed solely to watch that title.

Last year saw global box office revenues barely scratch $12 billion, a colossal 70% fall from the $42.5 billion taken in 2019. North American box office revenues of $2.3 billion marked the lowest result in forty years. Even if you believe in some resurgence post-pandemic, there is no hiding from the fact that movie theater revenues have been in a death spiral for years. Any comeback is likely to be temporary.

TVoD has proven a bit of a spanner in the works for the rise of AVoD platforms. While 2021 looked set to be a year where the gradual growth of the format across 2020 was set to continue at a steady pace, instead the SVoD platforms have found a new way to put a refreshing spin on their services.