Going to the movies is far from a dead pastime, but according to recent reports, online video-streaming revenues are expected to surpass the box office within five years.
Netflix, the streaming video market’s leading service, announced they’ve surpassed 50 million subscribers in this week’s quarterly earnings report. The company reported $838 million in domestic streaming revenue, up from $671 million a year ago. They expect that number to rise steadily in the third quarter of 2014, according to a letter to shareholders.
Rivals in the streaming video business are also seeing a rise in profitability, showing the market’s potential for strong competition.
Amazon has never released specific numbers in terms of Prime subscription statistics but Business Insider reported that the company had at least 20 million members in January. Meanwhile, Hulu announced in April that they had reached 6 million Hulu Plus subscribers, a new high for the company.
A recent report from PricewaterhouseCoopers predicted streaming home video revenue would surpass physical home video (DVD, Blu-ray Disc) in 2015, and pass the American box office in subsequent years.
The in-depth “Global Entertainment and Media Outlook 2014-2018” forecasted streaming service earnings to surge to more than $17 billion in 2018, while the box office will top out at $12.5 billion. In 2013, streaming services made $7.34 billion, compared to $10.8 billion at the box office.
In Netflix’s letter to shareholders, the company also announced they would begin selling gift cards at stores in the U.S., Canada, Mexico and Germany later this year. The company hopes the gift cards will “provide an easier alternative for consumers to join Netflix in markets with developing online payments.”
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