Online entertainment is something that we have all taken part in. From Netflix and paid-for TV subscriptions through interactive online video gaming, to online casinos and sports betting apps – in-home and online entertainment revenues are flourishing in the States.
The recent ‘THEME’ report by the Motion Picture Association (MPA) demonstrated a huge increase in revenue in the theatrical and home entertainment industry. This can be put down to a change in habits brought on by the COVID-19 pandemic which has now lasted beyond that, into a post-pandemic world.
Simply put, more people are staying in and using their screens and devices to entertain themselves.
The MPA’s report used various sources to compile its data and discovered that revenues in the industry are outpacing the economy. For example, their report found that the home and mobile entertainment market in the U.S. brought in $36.8 billion in revenue for 2021 – the inclusion of digital sales and disc sales no doubt contributing a significant amount during lockdowns.
Boom in online-centred entertainment
Digital sales alone amounted to a huge $29.5 billion (80% of the revenue), garnering a 19% increase on the previous year and a record-beating figure. Clearly, the digital market’s growth has been huge since the pandemic began – and has impacted on physical sales and pay-TV subscriptions which have suffered a decline in revenue generation.
As the public turn to streaming services and opt to watch full-length TV shows and movies on their smartphones, tablets, and laptops whilst at home or even commuting places, the “new normal” seems to be all about online entertainment taking over from traditional methods.
Not only has video streaming boomed over the past two years (it is now an $81 billion industry and its growth trajectory is expected to continue), but music and video gaming/eSports have also enjoyed a rapid ascent since 2020.
Music revenue growth is being fueled by digital streaming in what is believed to be a $30 billion business, whilst video game and eSports revenues already hit $147 billion in 2020 and are projected to surpass the $200 billion mark within the next three years.
Elsewhere, VR has rapidly become the fastest-growing segment of the entertainment industry -seeing Its revenues surge by over 30% in 2020 to $1.8 billion, projected to reach almost $7 billion over the next three years. And as internet access becomes far more widely available, spending on online advertising is also rocketing.
In fact, 2020 saw online advertising spending usurp more traditional methods of advertising for the first time ever, with around $336 billion being spent. Again, this is another field where growth over the next few years is expected to be powerful.
Online gambling is also taking advantage
Thanks to relaxed regulations across all industries and a strong focus on attracting younger audiences by various businesses, this trend mentioned above has also been extended to the gambling scene.
It is not a real surprise that most younger consumers are not driven by traditional forms of media and entertainment. In a world of on-demand and smartphones, gaming has now become a significant driver of data usage. Indeed, this section of the industry is predicted to grow from 4.7% of worldwide total data consumption in 2020 to 6.1% by 2025.
It also comes as no surprise that revenues are rocketing at the same time that younger and younger audiences are taking part directly because more and more states are beginning to open up online gambling and sports betting – all available on mobile devices.
Combine these factors with the forced quarantining of traditional gamblers over the past two years of the COVID-19 pandemic and you can see why there has been a major increase in online gambling as a form of entertainment.
Online gambling is not fully legalized across the U.S., but in those states that have legalized the practise – such as New York, Illinois, Michigan and Maryland – businesses have been making the most of the opportunities afforded to them.
And in those states that are yet to legalize online gambling and sports betting, they are seeing the benefits being brought to the economy elsewhere and it will only be a matter of time before further states join the ride.
One outlier state looking to cash in…
Those states that are yet to legalize online gambling and sports betting are keeping a close eye on the benefits being brought to the economy and it seems that it will only be a matter of time before further states join the ride.
One such state is currently on the cusp and somewhat stuck in the middle. Indeed, online gambling in Maryland is not quite open for business despite having been legalized last year.
Although retail sports betting went live in December, state officials are earmarking this fall/winter for the opening up of online sports betting – though that may be subject to change still.
Meanwhile, online casinos and poker are currently restricted to local businesses operating social gaming websites. One example of this is Maryland Live! operating a Live! Social Casino which allows free slots, table games and tournaments to be played.
It’s a small step at least, but the people of Maryland are eager to push the state for full legalization of online play. And we can see why…
Huge revenue-generator for U.S. states
There has already been over $3 billion in wagers for sports betting alone in 2022 – before we even get to look into online casinos and poker. It is a big money-spinner for those states that allow it, with revenues generated being spent on infrastructure projects across a whole manner of fields.
The sheer numbers of billions of dollars involved are a major reason behind the relaxation of gambling laws. Let’s take a look at just some of those states where the millions and billions are rolling in thanks to legalization…
Michigan has opened up all three types of online gambling – casinos, poker and sportsbook betting. It became the third state in history to bring $1 billion plus in annual revenue from online casino games and poker, whilst in its first full month of online sports betting it took over $300 million in online wagers.
Illinois is now the third-largest sports betting market in the U.S. Sportsbooks in the Prairie State enjoyed three consecutive months of $780m+ in betting revenues to total nearly $7bn in wagers for the year.
In January alone, $564 million was wagered in Arizona, the vast majority of that coming via online apps thanks to the state’s 12 online platforms having made over $40 million in after-tax profits that month.
New Jersey saw a 29.5% year-on-year increase in revenue and gambling revenue in the first couple of months of this year totalled $755m across sports betting, iGaming and casinos. Sportsbooks in the state alone have generated over $1bn in revenue.
Neighbouring New York also reported its largest amount in a single month when over $1.5b was wagered in January.
As gambling sites and mobile apps brought in some $53 billion in revenue last year, according to the American Gaming Association, we expect more states to speed up legalization over the next year or two. And that means more record-busting revenues being generated state by state in the online entertainment industry.
The figures we have highlighted above could well be a small insignificance soon enough.