Online Video May Not Be The End of DVD Sales, Study Says

PORT WASHINGTON, New York — Tube sites show no signs of slowing down. And that may not be such a bad thing. A recent study finds that the adoption of streaming video and tube sites among the general public is growing at a faster pace than other content delivery methods. A lot faster. The good news? Older boomers are now watching it, and they're actually buying the content offline.

The study, conducted by New York-based marketing research firm NPD was based on 11,000 consumers. The study results were published this month and it outlines a demographic shift in online video's adoption rates. It also reveals consumer behavior that may run counter to what many people in the adult industry see as a trend for online content overtaking physical product sales.

Results showed that older audiences who use video convert into traditional brick-and-mortar consumers. Of the study participants who identified as baby boomers, 15 percent of those who streamed video content were "more likely" to purchase a CD, DVD or movie tickets. Further supporting an online-to-purchase link, NPD found that 80 percent of the study's participants used the web to purchase goods or services, a significantly higher percentage than their younger counterparts.

Once the domain of younger users, survey results also indicated that boomers are becoming heavy users of streaming video.

NPD defines baby boomers as those aged 44 to 61. “There’s an ongoing misperception that certain web activities are the exclusive domain of young people,” said Russ Crupnick, entertainment industry analyst for the NPD Group. “That misperception could cost the entertainment industry, in terms of lost opportunities to target valuable consumers.”

Other interesting findings of the study include the fact that over half (57%) also visited social networking sites in the past three months logging eight visits over the three months of the study. Good news for sites like XTube and YouPorn that have combined both online video and Web 2.0 conventions like chat and social networking capabilities.

The study highlighted other findings that refute widely held beliefs in adult entertainment.

“Everyone is guessing when video on demand and digital downloads will spell the end for packaged media” NPD's Crupnick said. “At this point, though, digital video is still an extremely small part of overall consumer entertainment spending.”

According to information from NPD’s recent “Entertainment Trends in America” report,

  • On average, U.S. consumers spend $8 out of every $10 of their budgets buying or renting DVDs
  • Less-than one percent of Americans’ movie budgets are currently spent downloading movies and TV shows from the Web.
  • 41 percent of dollars budgeted for movies and video was spent on DVD movie purchases, 11 percent for purchases of TV programs on DVD, and 29 percent on DVD rentals (including Netflix and other video-subscription services).
  • 18 percent is spent on movie tickets, but just 0.5 percent is currently spent on renting or purchasing TV shows or movies in digital format from the web.
  • When asked how they watched a full-length movie in the past three months, 67 percent of respondents said they viewed a DVD they own themselves, while half watched a rented DVD, and 18 percent opted for a video-on-demand (VOD) movie.
  • Eight percent reported viewing movies on their portable media devices (e.g., digital music/video player or mobile phone),
  • Six percent downloaded a movie from a free file-sharing service and watched on a computer or television.
  • Just 2 percent paid for a digital video download from the web; however, more than half (52 percent) reported visiting sites like YouTube, in order to watch streaming video.

“A growing number of Americans are going to YouTube and other sites for streaming video, but when it comes to paying for video content, they’re still focused on DVDs,” Crupnick said. “Though the near-term talk of a digital revolution is probably overblown, as we’ve seen previously in the music industry, new content delivery sources can quickly take root among consumers. That’s why many home video companies are aggressively pursuing digital strategies, because the inflection point will come -- it’s just not coming tomorrow."

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