By R.T. Watson 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (March 12, 2020).

More than ever, the fate of the movie business has become dependent on its prospects online and internationally.

While theatrical ticket sales plateau and DVD sales continue to plummet, strong growth in international streaming revenues powered global entertainment spending past $100 billion for the first time in 2019, according to data released by the Motion Picture Association.

The international digital entertainment market -- including digital rentals or purchases of television and movies, plus money spent on subscription streaming services -- jumped 29% to $28.2 billion from $21.9 billion in 2018. Last year, spending on digital entertainment in the U.S. grew by 18% to $20.5 billion.

Netflix Inc., the world's leading streaming service, has experienced booming international business as domestic gains waver amid greater competition. In January, when the company announced its fourth-quarter earnings for 2019, it had added 8.3 million subscribers in overseas markets, while domestic subscriptions fell short of expectations for the third straight quarter.

At the time, Netflix said nearly two-thirds of its 167 million subscribers world-wide are from outside the U.S., where it had 60.4 million customers. More rivals are aiming to compete with Netflix, as AT&T Inc. and Comcast Corp. prepare to unveil their own streaming services. Walt Disney Co., Apple Inc. and Amazon.com Inc. already have their own platforms.

Online content is growing, and it is increasingly being consumed on mobile devices -- at nearly four hours a day for Americans, who spent more time on their phones, excluding voice activities, than watching television in 2019 for the first time ever, according to the MPA.

Additionally, more than 85% of children between the ages of 2 and 17 watch TV shows or movies on mobile devices, the association said.

Seeking to meet the growing demand, television producers created 532 original scripted series in 2019, up from 496 the previous year, according to the MPA.

The banner year for digital consumption stood in contrast to global box office revenues, which ticked up just 1% to $42.2 billion. International ticket sales grew by 3% in 2019. They dropped 4% in the U.S. and Canada, as attendance fell by 5% and ticket prices increased by 1%.

The global box office stagnated even though Disney released six films that each grossed more than $1 billion, including "Avengers: Endgame," whose $2.8 billion global haul surpassed 2009's "Avatar" as the highest-grossing movie of all time.

In early 2020, many predicted China would pass the U.S. as the world's largest box-office market. That was before the coronavirus outbreak, which caused the government in China to shut the nation's nearly 70,000 theaters last month. Theaters in Japan and South Korea have also experienced disruptions.

This year is all but guaranteed to see box-office declines as theaters outside the U.S. close amid concerns of the spreading virus. The high-profile productions affected by the outbreak have been piling up.

MGM Holdings Inc. postponed its planned April release of the James Bond film "No Time to Die" until November. Disney hasn't been able to release family-friendly titles like "The Call of Wild" and Pixar's "Onward" in China. Sony Corp. said Tuesday it was delaying the release of "Peter Rabbit 2: The Runaway" until August.

While domestic ticket sales disappointed, international box office revenues grew slightly in every other region, led by Asia Pacific which rose 4% in 2019. China, Japan and South Korea ranked as the top three international box office markets.

A strengthening U.S. dollar dented box-office revenues in some key international markets, according to the MPA.

Revenues from the rental and sale of DVDs and Blu-ray discs continued a long slide, to $10.1 billion in 2019, from $19.7 billion in 2015.

 

(END) Dow Jones Newswires

March 12, 2020 02:47 ET (06:47 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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