DVD Tops for Entertainment; Online Delivery Small But Growing

People are sticking with physical media for their home entertainment right now, with DVD and Blu-ray disc sales and rentals representing 88 percent of consumer spending on home video content, according to a new survey from NPD Group. And though the number of people using newer online direct distribution methods is small, it is growing.

NPD broke down where the consumer’s money is going:

[T]he average U.S. home video consumer reported spending an average of $25 per month on all types of home video purchases and rentals. When it comes to spending on home video content: 63 percent was spent on DVD purchases; 7 percent on BD purchases; 18 percent on DVD/BD rentals from retail stores, subscriptions or kiosks; 9 percent on video on-demand (VOD); and 3 percent on digital downloads and online streaming.

When asked about how they watched full-length movies in the past three months, NPD found that just 9 percent of consumers with home Internet connections said they watched movies streamed online (last year that number was 5 percent), and 8 percent rented a digital movie download (up from 4 percent last year). Less than 5 percent of consumers said they watched movies through a game console.

But even digital downloaders have not abandoned those shiny little discs. Eight out of 10 who downloaded movies also said they bought or rented a DVD, compared with 50 percent of the population as a whole; and 25 percent said they bought or rented a Blu-ray disc, compared with 5 percent overall.

The growth in online streaming and downloads NPD Group saw from this report is bound to accelerate this year as more services pipe content directly to televisions. More Netflix-enabled devices are heading to market, Amazon offers HD rentals and purchases, and newcomers like ZillionTV will try to crack open the market.