Consumers watch VOD more, visit theaters less

Report cites economy, HDTVs for keeping more people at home

By Danny King -- Video Business, 12/16/2008

DEC. 16 | Many U.S. consumers are watching video-on-demand instead of going to the movie theater as more try to save money and take advantage of both high-definition content and a wider range of content that can be delivered to the home, according to a report released by Parks Associates. Additionally, more people appear to be getting their TV content through either primetime viewing or over the Internet instead of from DVDs, while the number of people renting films on DVD appears little changed.

The number of people who watch more VOD content than they did two years ago, either through subscription, pay-per-view or free, outnumber those who watched less VOD by more than a two-to-one ratio, Parks Associates said late last week. Meanwhile, the number of people who said they’re less likely to watch movies at a theater than they were two years ago outnumbered those who are going to the theater more often by almost four to one, Parks said.

Though financial downturn is less likely to impact pay-TV and Internet TV than movie theater visits, the higher percentage of households with an HDTV also has caused more people to get their entertainment at home, according to Kurt Scherf, principal analyst at Parks.

“Since the trends reflect changes in the past two years, I wouldn’t put them entirely on the economy,” said Scherf. “As we’re seeing high-definition TV penetration reach 50% of households and home theater penetration well over 20%, we’re seeing consumers want to enjoy those investments as much as possible.”

Meanwhile, the number of people who were more apt to rent movies on DVD than they were two years ago was about the same as those less likely to do so, while people appeared less likely to buy films on DVD than they were in the past, according to the Parks report. Additionally, people were less apt to either rent or buy TV DVDs than they were two years ago, likely reflecting the effect of more TV series being available for viewing online.

Such trends are echoed by DVD rental and sell-through numbers for this year. Through the end of September, U.S. DVD spending fell 2.4% to $14.25 million, with sell-through sales dropping 3.5%, according to data compiled by Video Business and Rentrak.

Video content sources that have increased in use in the last two years

Video content sources that have decreased in use in the last two years