Consumer spending on home entertainment technology is estimated at about one quarter of a trillion dollars in 2021. Spending for both hardware and services has grown consistently, though is expected to increase even more rapidly vs historical estimates, with an overall annual increase of 11.2% for 2021 for the category, overall. The COVID-19 pandemic has changed consumer priorities and altered consumer behavior that is driving overall spending on the category.

Growth in home entertainment hardware spending for 2021 will be driven largely through spending on new televisions. More than half of consumers say their households purchased a new TV within the past two years, and there has been an increase in high-end TV purchases. Young adults are a key segment as these more tech-savvy consumers are embracing the suite of tech products available to elevate the home entertainment experience, whether it is high-end TV models, next-generation video game consoles or wireless speakers.

Services spending has also grown significantly as consumers shift toward more digital-based entertainment like on-demand video and audio streaming, as well as vMVPD services like YouTubeTV and Sling. Even as the economy recovers, businesses reopen and outside the home leisure activities return, the growing consumer focus on the home will continue to drive overall growth in home entertainment spending.

For the purposes of this Report, home entertainment technology includes both hardware and services with spending data sourced from the BEA and defined as:

Hardware: includes video and audio equipment (including televisions), recording media (including discs, tapes, vinyl and permanent digital downloads).

Services: includes live television services (cable, satellite, and other services), as well as video and audio streaming spending.

The US has been widely open for business as vaccinations for COVID-19 are administered, and lockdowns, social distancing and mask mandates have dissipated. However, the Delta variant has begun to emerge, threatening to cause a fourth surge of the COVID-19 pandemic, given its significantly higher rate of transmissibility. Since the pandemic took hold in the US in March 2020, consumers adhered to mask mandates and stayed at home to varying degrees, but the willingness to do so will be unlikely to return barring catastrophic consequences from the Delta variant surge, such as worse outcomes for children or adults with no underlying health conditions. Businesses will also be unlikely to shutter, and more businesses and gatherings are requiring proof of vaccination for patrons.

Mintel data indicates that consumers have spent significant amounts of money on their homes and their home entertainment through 2021, driven primarily from restrictions from COVID-19, but also new behaviors established since the pandemic. New behaviors like remote work, digital movie rentals, and ecommerce shopping taken up during the pandemic will remain to some degree and become permanent facets of consumer behavior moving forward. Even as the country progresses through the pandemic, many consumers will likely spend more time in their homes, embracing the additional investments made into their home entertainment rooms and devices.

Consumer research for this Report was fielded in May 2021, and the Report was written in August 2021.

Mintel’s economic assumptions are based on forecasts released by the CBO on July 1, 2021. The CBO expects US real GDP to increase 6.7% for the year (vs the 3.5% negative annual growth for 2020). The CBO projects the unemployment rate to average 5.5% for the year, down from earlier projections of 8.4% and in contrast to the 8.1% average rate for 2020.

The first COVID-19 case was confirmed in the US in January 2020. It was declared a global health pandemic and national emergency in early March 2020. Across the US, various stay-at-home orders were put in place in spring 2020, and non-essential businesses and school districts closed or shifted to remote operations. The remainder of 2020 saw rolling orders, as states and local governments relaxed and reinforced guidelines according to the spread of the virus in each region.

Vaccine rollout began in December 2020, and has continued throughout 2021. Mintel anticipates business operations in the US will remain in a state of flux through 2021 as vaccines are administered and social distancing restrictions and capacity limitations are relaxed. The rapid spread of the Delta variant may result in increased restrictions in some areas of the country.