Screen Engine / ASI : Transactional Home Entertainment Consumers Most Attracted by PVOD, but Theaters Still Beckon

Screen Engine / ASI : Transactional Home Entertainment Consumers Most Attracted by PVOD, but Theaters Still Beckon

Above:  Satisfaction scores peak at major PVOD releases, such as Trolls World Tour and Scoob! (pictured).

 

Mark Orne | Screen Engine/ASI

August 3, 2020 | As theaters closed in March at the start of widespread stay-at-home orders, and early in-home releases premiered, many digital movie buyers and renters gave early window releases a try.  As visiting a theater became virtually impossible, digital movie transactions (buying and renting) rose, largely due to the introduction of early window PVOD (Premium Video-On-Demand, aka digital rental) at $19.99.  Heavy home entertainment transactors (movie buyers and renters) were among the strongest users of PVOD, with a core demo of males ages 25 to 44. These early adopter PVOD users are more like home entertainment (HE) transactors than theatergoers or subscription (SVOD) movie streamers.  These viewers love watching movies at home, are used to paying $19.99 for digital purchases, and as a result are willing to pay the relatively high price for PVOD to be able to watch movies earlier than they ever could before. 

When consumers were asked how they would have viewed the movie if PVOD wasn’t available, almost half said they would normally wait to watch the movie at the HE window (usually about 3 months after theatrical release), but given the opportunity were willing to pay $19.99 to see it sooner.  Some of the top motivators for PVOD rentals, besides the movie elements, are about being able to watch instantly, preferring to watch at home, and not having access to the movie in theaters nearby.

Value for group viewing

For economic reasons, the value of PVOD is much more attractive to parents and families when comparing it against a movie night out for a large group. With a premium price-point, consumers’ interest in the service depends on the type of movie they perceive is worth it. Big event movies in the action/adventure, comedy, and animation genres (especially for parents) are seen as having the most value.  Even though many of the bigger action movies haven’t been released on PVOD yet, due to risk to their expected large box office, there is potential, perhaps with a 17-day window, as allowed by the agreement reached by AMC Theatres and Universal Pictures last month, to bring in those who wouldn’t have made it to the theater or prefer to rent movies at home.

 

As habits form around PVOD, and as more consumers see the value, there could be some real competition for viewers when theatrical fully returns. While data shows many PVOD users could be drawn back to theaters, there is a growing number of residual consumers who would continue using PVOD, even with theatrical options.

At $19.99, the majority of renters watch PVOD with multiple viewers, mostly with family, some younger viewers with friends, with almost no one watching alone. Parents, especially moms, are most likely to watch with their kids. Additionally, PVOD movies are viewed about two times, as viewers are eager to get value from them during the 48 hour viewing period.

 

As PVOD movies have a high price point, viewers are more likely to only rent movies they are really interested in.  As a result, these consumers give higher satisfaction scores to PVOD releases compared to SVOD original movie premieres (which are viewed at no cost with a subscription).

Appeal grows with consistent schedule, big titles

Audiences’ perceived value of PVOD is tied to a regular flow of high-profile PVOD new releases.  This perceived worth is strongly linked to the quality of the movie (which is seen from ratings and recommendations scores). These satisfaction scores peak at major PVOD releases, such as Trolls World Tour and Scoob!, then drop after (especially likelihood to do again) during periods without any major PVOD releases, as consumers don’t know when the next big PVOD movie may be coming out. Paying high PVOD pricing for smaller and/or lesser quality movies also decreases the perceived value of PVOD overall.  A more regular flow of major PVOD releases could generate habitual checking for new releases, and lead to a perception of PVOD as a mainstream movie platform.

Desire to return to theaters is complicated

Despite the convenience and budget appeal of PVOD, nearly half of consumers surveyed in May 2020 said they would return to the theaters within three months after public restrictions are lifted. However, almost four in 10 would wait three months or even a year or more before they returned to theaters, with 15 percent saying they would never return.  This was just a couple months into safer-at-home guidance around the country that shut theaters.  In recent weeks we see evidence that this feeling may now be slightly worse.

As new cases continue to rise and studios pull back their theatrical release schedules, we are seeing shifts in both the desire to go to theaters as well as the likelihood of a return. Screen Engine/ASI’s COVID-19 tracking, as recently as last week (7/25-31), shows that 60 percent of Americans strongly agree that they would rather watch TV and movie content at home than go to a theater (up six points from over a month ago). The percent of those who say they will wait until the pandemic is completely over, which could be a year or more, before returning to theaters (37 percent), has grown six points in that same time frame in June.

These consumers’ new attitudes and behaviors for viewing movies via PVOD may become habit forming, so that when theaters do fully open there may be enough of a demand that PVOD may still be offered. In that scenario, for the growing number of consumers who don’t have a chance to get to the theater, don’t feel it’s safe, or just prefer the convenience of instantly watching movies at home, they would now have the option to pay the relatively high price to rent major movies on PVOD while they are still in theaters.

 

Mark Orne is EVP, Cross Platform Group for Screen Engine / ASI,
a full-service entertainment market research agency.
For more information, please email morne@screenengineasi.com.