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The NPD Group released numbers yesterday that made clear DVDs still dominate the movie landscape while consumers are spending just a teeny, tiny sliver on digital downloads. But don’t sound the alarm — downloads are not dead in the water.
NPD found that 41 percent of dollars budgeted for movies and video went to DVD purchases, 11 percent went to buying TV shows on DVD, 29 percent to DVD rentals, and 18 percent on movie tickets. The caboose for this entertainment train, meanwhile, is the digital format, which only attracted .05 percent of consumer spending.
But this number doesn’t matter too much. DVDs are firmly entrenched in the U.S. entertainment scheme; people have been using them for years and are comfortable with the format. Downloads are a new idea for most people; it was only this spring that digital versions of new releases came out on the same day as DVDs. Plus the studios, which provide all that entertainment content, know that it’s not a big market. Variety wrote in April that studios knew the digital business would be small this year, but anticipated big growth by next year.
The technology and consumer electronics side of the equation is placing bets on digital downloads as well. Apple, Amazon and Netflix are all pushing digital delivery of films, while Sony and Panasonic are building Internet connections directly into their TVs to receive digital content.