International consumer research uncovers emerging opportunities for entertainment industry

In the wake of financial unrest, inflationary tension and conflict, post-pandemic attitudes are beginning to shift. A new international wave of Living with Digital research from Futuresource Consulting shows that consumers in many countries are starting to feel financially less vulnerable. This has the power to make a positive impact on the entertainment choices they make.

Across the seven markets surveyed (France, Germany, UK, USA, Canada, Italy and Spain), Europe has experienced the greatest uptick in fortunes. All five countries in the region saw a decrease in respondents who felt they were somewhat or significantly worse off than they were six months before. In North America, the USA has stabilised, although Canadian financial strain continues.

“As Europe turns a corner, we’re seeing clear signs of renewed consumer engagement,” says James Duvall, Head of Entertainment, Futuresource Consulting. Cinema attendance continues to grow year on year. Subscription video on demand users are seeking more and more content, although service stacking is beginning to reach its peak, while its advertising-based sibling, AVoD, is attracting new active users in a number of markets. As we look out across the landscape, we’re seeing a complex international situation that presents some major strategic opportunities for entertainment brands and the wider industry.”

A world of differences for cinema

According to this 27th wave of consumer research, cinema attendance across all countries surveyed shows a higher attendance rate than a year ago.

“Box office is moving in a positive direction,” says Duvall. “Globally, revenues still sit around 15% less than the three-year pre-pandemic average, but they are gaining ground, and the reasons for staying away aren’t always centred around cost. Factors include changes in circumstances, and a good entertainment setup in the home.

“We also need to remember that previous surveys were in the field when exceptional releases were being shown. A year ago, it was Avatar: The Way of Water, while six months ago, Barbie and Oppenheimer had just been released. During this latest wave of research, no title has been able to match that level of reach.”

TVoD opportunities in UK and USA

Transactional VoD (including buying or rental) is a monetisation model that continues to confuse certain segments of the market. Many consumers now expect movies to be released digitally almost immediately after the cinema release. As a result and alongside a varying release approach across content owners the value of transactional content is not being realised.

In this latest wave of research, two-in-five respondents weren’t even aware of premium early digital releases. However, there was a large amount of variance at the country level, with Canada and Italy having the lowest potential demand, and the UK and the USA occupying the high-awareness end of the spectrum.

“Consumers have now settled into a solid pattern of either buyer or renting content,” says Duvall. “We’re seeing distinct socio-demographic and geographic patterns emerging. Of those who buy, the majority are making the decision based on content-related factors rather than cost. We’re also seeing that those with a higher number of subscription services are also likely to be more engaged across transactional content.”

SVoD service hopping on the rise

After many consecutive years of expansion, SVoD is beginning to come up against growth barriers. This latest wave of Futuresource research builds on the consumer sentiment from last time, with more than half of SVoD users happy with the number of services they currently subscribe to.

“Although there’s a lot of variation between countries, on average our respondents were subscribed to 2.2 services and have access to another through someone else’s subscription,” says Duvall. “And while SVoD subscribers told us they are happy with the number of subscriptions they have, we expect service hopping to increase. One-in-three are planning to do more of it during the next 12 months.”

Ad-supported tiers have become an essential part of SVoD service offerings, with all leading global players except Apple TV+ offering this. Consumer resistance is also beginning to fall away, with a marked increase in those ready to watch ads in exchange for a lower-priced subscription. Of the countries surveyed, the UK has seen the highest uptake of ad-supported services.

AVoD breaking new ground

As SVoD makes inroads into ad-supported territory, pure AVoD players have also seen their monthly active users increase in some of the markets surveyed by Futuresource. Native English-speaking countries have led the charge, with Canada experiencing the largest percentage increase since the last wave of research.

Germany is the leading non-English-speaking market for growth, thanks to Freevee, which has quickly become the most used service in Germany.

With a high proportion of Freevee users also being Prime Video subscribers, there is already a crossover in advertising to audiences. Yet Freevee acts as a gateway platform for Amazon, allowing it to launch into markets where it doesn’t have a strong SVoD foothold.

Local content is king

“Subscription services are holding a lot of sway with consumers,” says Duvall. “When viewing movies, subscription takes the top spot in three of the seven countries we surveyed. Live TV also ranks top in three of the markets, although Spain still favours the cinema.

“In addition, local content remains key to the viewer offering in all countries. Plus, if it’s filmed in-country that gives it even more momentum with consumers.

“With households becoming less financially vulnerable, we’ll continue to see a growing appetite for movies and TV shows as we move forward. From younger viewers seeking out the widest variety of content, through to family groups making the most of their in-home viewing, and older audiences more likely to buy first and view later, our latest Living with Digital report dives into the vast array of nuances as audiences re-evaluate and adjust their content consumption.”

Futuresource Consulting’s Living with Digital 27 report brings together audience and consumer habits and behaviours across all entertainment categories. The survey was in the field during December 2023. It covers France, Germany, UK, USA, Canada, Italy, Spain, and was completed using a nationally representative online sample, with 2,000 respondents targeted in each country. For more information on this report or to make a purchase, please contact James Duvall at james.duvall@futuresource-hq.com.

About the author

James Duvall

James Duvall joined Futuresource as the Principal Analyst for Entertainment in November 2022. He is responsible for the delivery of all consumer research and projects across Home Entertainment, covering over twenty regions for Futuresource’s Video Insight reports, the bi-annual Living with Digital survey, and the bi-annual Music Streaming report. Before Futuresource, James spent six years leading the insight and research programme at the British Association of Screen Entertainment and the Digital Entertainment Group International (DEGI), building upon his wealth of experience within insight teams for US Studios.