Video-Related Spending Still Flowing to DVDs Over Online, Mobile

MENLO PARK, July 2: A new
study from Knowledge Networks indicates that while consumers are certainly
seeking out content online and via mobile, the bulk of their video-related
spending continues to flow to DVD rentals and purchases and pay-TV
subscriptions.

The How People Use the
Video Marketplace research
indicates that 13- to 29-year-olds and, to a lesser extent, 30- to
43-year-olds, are much tech savvier than those in the 44 to 54 “Young Boomers”
demo. Those Generation X and Y members, however, are not spending all that much
more money on new-media content, as compared with the Young Boomers.

Some 67 percent of
Generation Y (13 to 29) respondents said they bought DVDs every month, versus 71
percent of Generation X (30 to 43) respondents and 51 percent of Young Boomers.
Sixty-seven percent of Gen Yers rented DVDs every month, with 65 percent of Gen
Xers and 44 percent of Young Boomers. The discrepancy between demos is wider
for streaming video users: 52 percent of Gen Y, 37 percent for Gen X and just
21 percent of Young Boomers. For monthly streaming video buyers, however the
usage rates were much lower, and similar across the three age groups: 3 percent
for Gen Y and Young Boomers and 4 percent for Gen X. Thirty-seven percent of
Gen Y members download video, yet just 2 percent pay for downloadable video.
Only 18 percent of Gen X members report to have downloaded video, and again
just 2 percent pay for downloadable content. While 11 percent of Young Boomers
download video, a negligible number pay for downloadable video. In the case of
mobile, only 1 percent of all demos pay for monthly cell-phone content, with 10
percent of Gen Y respondents and 2 percent of Gen X and Young Boomers claiming
to be cell-phone video users.

The findings, part of The
Home Technology Monitor, show that
the average person aged 13 to 54 spends roughly $31 per month on video-related
content. Of this, about $13 goes to a pay-TV service and $13 to buying and
renting DVDs. Spending on emerging video distribution channels accounts for
less than $5—61 cents for pay-per view, 44 cents on VOD, 37 cents on
streaming video, 26 cents on mobile video and 25 cents on downloaded video.

"DVDs are the bread
and butter of content providers," said David Tice, the VP and group
account director at Knowledge Networks and director of The Home Technology
Monitor. "But the growing availability of video in digital forms is
impacting peoples' expectations; we found, for example, that 84 percent of
consumers expect to be able to watch video on the device of their choice. The
question is, will consumers be willing to pay for the convenience of access in
the digital world? And how can content and service providers encourage repeat
use and buying in the new media?"

—By Mansha Daswani