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NPD: Packaged Media Trounces Internet Downloads

A new report from NPD revealed that the average U.S. consumer spends eight out of every 10 entertainment dollars renting or buying DVDs. Only 0.5 percent is spent on downloading or streaming movies.

The study, presented at the DisplaySearch 2008 Conference, was based on a survey of more than 11,000 consumers.

"Everyone is guessing when video on demand (VOD) and digital downloads will spell the end for packaged media," said Russ Crupnick, senior industry analyst for entertainment with The NPD Group. "At this point, digital video is still an extremely small part of overall consumer entertainment spending."

The breakdown of the entertainment spending was found to be as follows:

  • DVD Purchases: 41%
  • DVD Rentals: 29%
  • Movie Tickets: 18%
  • TV shows on DVD: 11%

Mr. Crupnick, in a report by Home Media Magazine said that the talk of the digital revolution in movie distribution is overblown right now, but history has shown that new delivery mechanisms can take root quickly. "That’s why many home video companies are aggressively pursuing digital strategies," Mr. Crupnick said. "The inflection point will come — it’s just not coming tomorrow."

Apple has placed its bet on digital downloads with iTunes and the Apple TV because it doesn’t have the products and channels to do otherwise. In contrast, the movie studios and home electronics manufacturers are furiously cashing in on the trend, at least for now, that consumers still want to own, touch, feel and gaze upon those beautiful, multi-colored plastic discs and artistic cases.

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