Online video catching on, but DVD consumers' favorite

Study says most downloaders don't pay for content

By Susanne Ault -- Video Business, 7/7/2008

JULY 7 | Generations X and Y are far ahead of their parents in the consumption of emerging Web-based video, but DVD remains the most popular home entertainment choice among all demographics, according to new research from Knowledge Networks.

In Knowledge Networks’ “How People Use the Video Marketplace” report, 98% of the 30- to 43-year-old Gen X and the 13- to 29-year-old Gen Y groups, and 88% of 44- to 54-year-old Young Boomers said they use DVDs.

Sixty-seven percent of Gen Y said they buy DVDs at least once a month; 71%, Gen X; and 51% Young Boomer. Additionally, 67% of Gen Y said they rented at least once a month; 65%, Gen X; and 44%, Young Boomer.

The pattern starts to diverge with Web-delivered content, with 52% of Gen Y, 37% of Gen X and just 21% of Young Boomers saying they stream video. With downloading, the breakdown is 37% Gen Y, 18%, Gen X and 11%, Young Boomer.

However, both younger and older generations indicate they normally do not pay for this new media video usage. With video streams, 3% of Gen Y said they bought monthly; 4%, Gen X and 3%, Young Boomers. With video downloads, 2% of Gen Y said they bought monthly; 2% Gen X and N/A for Young Boomers.

“DVDs are the bread and butter of content providers,” said David Tice, VP and group account director at Knowledge Networks. “But the growing availability of video in digital forms is impacting peoples’ expectations; we found, for example that 84% 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?”