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NPD: Disc Spending Still Tops VOD

4/18/2011 11:15:06 AM Eastern

Port Washington, N.Y. - Despite the buzz about digital delivery, DVDs and Blu-ray Discs (BD) continue to rank among consumers as the most popular formats for home video entertainment, according to a new study from the NPD Group.

The NPD's "Entertainment Trends in America" report found that over the past three months, 77 percent of consumers watched a movie on a DVD or BD, which is unchanged from a year ago.

Those who viewed movies from physical discs reported watching an average of four hours per week, also unchanged from last year.

By comparison 68 percent watched a movie on a TV or cable network channel, 49 percent at a theater, and 21 percent used paid video on demand through their TVs.

When asked about their recent spending on home video, consumers reported that 78 percent of their home video budgets went to the purchase and rental of DVD and BD, including online and in-store retail purchases and rentals, while 15 percent was spent on video subscription services like Netflix that offer a mix of physical and streaming rentals, NPD said.

Digital video downloads, paid streaming, paid transactional video on demand (VOD), and pay per view (PPV) comprised the remaining 8 percent.

Overall per-capita spending on home video fell by 2 percent, according to the report.

"With the well publicized struggles of Blockbuster and retail video stores closing around the country, and with media attention increasingly focused on the newest digital home-video offerings, the value and importance of physical formats to the home video industry and to consumers is often overlooked," stated Russ Crupnick, NPD Group entertainment industry analyst.  "Even though DVD sales and rentals are slowing, there is no evidence that consumers are abandoning physical discs for watching movies, even as the choices for viewing are expanding."

In addition to video store closures, many consumers have already built DVD collections of their favorite catalog video titles and are becoming more comfortable using various digital video options. Year-over-year physical disc purchases and rentals fell 9 percent (not including rental subscriptions).

As with CDs in the music industry, physical discs are not expected to disappear anytime soon, Crupnick said.

"We expect strong growth from many digital sectors, driven by connected devices, improving selection, and the consumer's endless quest for convenience," said Crupnick. "For now, though, physical discs continue to lead overall engagement and spending by home video viewers; and even with increasing use of VOD and other digital formats, the primacy of DVD and Blu-ray in home video will continue for the foreseeable future."

The findings came from an online consumer tracking study conducted in March. It was based on 9,636 completed responses from U.S. consumers, and final survey data was weighted to represent U.S. Web users age 13 and older.

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