The film industry is on the precipice of a fundamental shift

Revenue generated from electronic home video is expected to surpass that of the US cinema by 2018, making it the lead revenue generator in the filmed-entertainment market, according to a new report from PricewaterhouseCoopers LLP (PwC).

Electronic home video — which encompasses video streaming services like Netflix and Hulu, premium-cable channels like HBO and Starz, and on-demand programming — will generate $13.8 billion in revenue in 2018 in the US, compared to $13.1 billion in revenue for the cinema industry.

Electronic home video revenue includes rentals and subscriptions to premium-cable services and streaming platforms, while cinema revenue comprises the box office and advertising.

Overall, electronic home video service is expected to double in revenue from $8.4 billion in 2014 to $16.54 billion in 2019, making the annual growth rate 14.6%. Over that same time, cinema revenue is expected to grow at a more modest rate of 3.9%, from $11.2 billion in 2014 to $13.5 billion in 2019.

PwC determined these numbers in their Global Entertainment and Media Outlook for 2015 to 2019, released on Tuesday. In it, the firm forecasts what will drive consumer spending and advertising revenues directly related to entertainment and media content over the next five years.

“Film’s status as the prime storytelling medium in pop culture is still acknowledged but, in an era of Netflix, HBO and Showtime, high-end TV drama is making inroads into cinema’s dominance, and many OTT services (services that provide content through the internet) have announced they will start making films,” said Todd Supplee, Senior Director with PwC’s Entertainment, Media & Communications practice.

Deadline Hollywood film critic Mike Fleming recently wrote that watching the HBO drama “True Detective” and the critically acclaimed Netflix series “House of Cards” got him “really depressed” about the movie business.

“Those series and 10 more like them are better than anything I see on a movie screen,” Fleming said. “Movies seem at a low creative ebb, compared to pay and basic cable outlets soaring with boldness and creativity.”

The PwC data is below:

Screen Shot 2015 06 05 at 9.10.56 AMPwC

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