Table of Contents
- Scope and Themes
- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
- Executive Summary
- Market for recorded media has suffered from online migration
- Music exploration sites a potential peril to music sales
- Piracy through P2P networks is still rampant
- DRM
- Other entertainment channels vie for share of leisure time
- Economic recession has several negative impacts
- DVD rental is a bright spot in dark economy
- Leading players race to direct-to-TV movie download
- PCs still the center of digital life but playback methods are diversifying
- Consumers need to be convinced of value proposition of new technologies
- Under 35s and Asians are key targets but harder to please
- Teens are even more avid consumers of recorded media
- Market Size and Forecast
- Market for recorded entertainment continues to shrink
- Figure 11: Total U.S. sales and forecast of recorded entertainment,
2003-12
- Figure 12: Total U.S. sales and forecast of recorded entertainment, at
inflation-adjusted prices, 2003-12
- Competitive Context
- Strong competition from the internet
- Figure 13: Growth in indexed hours of filmed entertainment consumption
per person per year, 2003-07
- Figure 14: Indexed of change in hours of music consumption per person
per year, radio vs. recorded music, 2003-07
- Internet
- Social networking sites based around consumer-generated content
- Personalized internet radio sites
- Network sites
- Cable TV: The peril posed by free VOD
- Box office
- Video games
- Segment Performance
- Video market holds ground as music industry shrinks
- Figure 15: U.S. sales and forecast of video and audio recorded
entertainment, 2003-11
- Sales growth led by digital segments
- Figure 16: U.S. sales and forecast of recorded entertainment, by
segment, 2003-08
- Figure 17: U.S. sales of recorded entertainment, by segment, 2005 and
2007
- Segment Performance--Video
- Blu-ray fails to make up for digital cannibalization and faltering economy
- Figure 18: U.S. sales and forecast of video entertainment, 2003-12
- Figure 19: U.S. sales of physical video entertainment, 2003-08
- Economic downturn boosts video rental sales
- Figure 20: U.S. sales of video rentals and subscriptions, 2003-08
- Segment Performance--Audio
- Weak economy makes problems worse for sales of CDs
- Figure 21: U.S. sales and forecast of audio entertainment, 2003-12
- Figure 22: U.S. sales and forecast of physical music entertainment,
2003-08
- Music downloads: Online sales explode but shrink music sales overall
- Figure 23: U.S. sales and of digital music downloads, 2004-08
- Music subscriptions showed promise but failed to pop
- Figure 24: U.S. sales of digital music subscriptions, 2005-08
- Retail Channels--Music
- Online has grown to become leading music retail channel
- Figure 25: Where music is purchased, by type of store/channel, 2004 and
2008
- Online channel shows strongest skew with age
- Figure 26: Where music is purchased, by type of store/channel, by age,
April 2007-June 2008
- Online and A/V stores skew with income
- Figure 27: Where music is purchased, by type of store/channel, by
household income, April 2007-June 2008
- Blu-ray discs more commonly purchased online than DVDs
- Figure 28: Where physical discs are purchased, by type of disc, April
2007-June 2008
- Retail Channels--Video
- Big box mass merchandisers attract a majority of DVD buyers
- Figure 29: Where DVDs are purchased, April 2007-June 2008
- Best Buy and Target positioned for higher earners
- Figure 30: Where DVDs are purchased, by household income, April
2007-June 2008
- High frequency DVD renters go online, while youngest respondents opt for
bricks and mortar
- Figure 31: Where DVDs are rented, by age, April 2007-June 2008
- Online rentals and Blockbuster skew toward higher earners
- Figure 32: Where DVDs are rented, by household income, April 2007-June
2008
- Leading Retailers
- Dramatic revenue growth in online distribution models
- Figure 33: U.S. sales of publicly traded recorded media distributors,
2005 and 2007
- Brand Qualities
- Blockbuster' s brand expansion focuses on key values
- Netflix
- iTunes
- Amazon
- eMusic
- Wal-Mart
- Best Buy
- Innovation and Innovators
- The race to own movie downloading
- Netflix and Amazon
- Vudu
- AppleTV
- Blockbuster
- HDTV with built-in internet
- Any PC is a media PC
- New sites facilitate exploration of new music
- Pandora
- Last.fm
- Slacker
- Imeem.com
- Advertising and Promotion
- Overview
- Figure 34: Media spending by recorded media brands, 2006-07
- Television advertising
- Netflix
- Figure 35: Netflix--late fees, December 2008
- Figure 36: Netflix--family viewing, April 2008
- Figure 37: Netflix--customer interviews, December 2008
- Blockbuster
- Figure 38: Blockbuster Total Access, June 2008
- Figure 39: Blockbuster Imaging Service, December 2008
- Online Advertising
- Search engine advertising
- Search term: DVD RENTAL
- Search term: BUY DVD
- Search term: DARK KNIGHT DVD
- Market Drivers
- Piracy through P2P networks is rampant
- Economic recession hits shiny discs
- Online distribution facilitates piracy and decreases price points
- Internet penetration facilitates download purchases, piracy, free content
- Figure 40: U.S. household penetration of PCs, DVDs, and broadband
internet, 2003-07
- Recession and confusion slow consumer investment in video technology
- Consumer confusion
- Growth of 12-34 year olds increases potential consumer base
- Figure 41: Total U.S. population, by age, 2003-13
- Incidence of Media Purchase
- Migration from discs to downloads spreads to video
- Figure 42: Incidence of media purchases in previous year and average
number purchased, 2004, 2006 and 2008
- Adoption of digital downloads skews strongly toward youth
- Figure 43: Incidence of media purchases in previous year and average
number purchased, by age, April 2007-June 2008
- Lower-income segment may present opportunity for digital vendors
- Figure 44: Incidence of media purchases in previous year and average
number purchased, by household income, April 2007-June 2008
- Single song downloads most popular by large margin
- Figure 45: Incidence of media purchases in previous month and average
number purchased, by age, October 2008
- Incidence of Media Rental
- DVD renters decline in number but increase in frequency
- Figure 46: Incidence of DVD rental and average number rented, 2004, 2006
and 2008
- 25-34s most important to DVD market
- Figure 47: Incidence of DVD rental and average number rented, by age,
April 2007-June 2008
- DVD rentals more common among higher earners
- Figure 48: Incidence of DVD rental and average number rented, by
household income, April 2007-June 2008
- Rental of digital downloads nearly as common as purchase
- Figure 49: Incidence of movie rental and average number rented, by
format/type, by age, October 2008
- Use of Peer-to-Peer Networks
- P2P download is widespread and devastates download revenues
- Figure 50: Use of P2P networks and average items acquired, by media,
October 2008
- Piracy begins in the 18-24 age group
- Figure 51: Use of P2P networks and average items acquired, by media, by
age, October 2008
- Playback of Physical Discs
- Ways to playback media are diversifying
- Figure 52: Playback medium for shiny discs, by type of disc, October 2008
- Younger respondents find more ways to watch their DVDs
- Figure 53: Medium used to playback DVDs, by age, October 2008
- Digital Download Practices
- PCs are still primary method of media download
- Figure 54: Method of digital download, by type of download, October 2008
- Disc burning performed by a third of respondents for both music and video
- More than a fifth of respondents delete video downloads after viewing
- Figure 55: Storage of digital downloads, by type of download, October
2008
- Adoption of Technologies
- Interest/ownership rate measures maturities of media technologies
- Figure 56: Adoption of new technologies, ownership and interest in
ownership, October 2008
- Consumers need to be convinced of value proposition
- Figure 57: Lack of interest or awareness in new technologies, October
2008
- Younger and higher-earning respondent are earliest adopters
- Figure 58: Ownership of new technologies, by age, October 2008
- Figure 59: Ownership of new technologies, by household income, October
2008
- Attitudes and Motivations
- Preferences indicate different video distribution models are viable
- Figure 60: Attitudes toward video entertainment, October 2008
- Under-35s are more passionate but harder to please with movie downloads
- Figure 61: Attitudes toward video entertainment, by age, October 2008
- DRM a barrier to audio growth
- Piracy still condoned
- Figure 62: Attitudes toward audio entertainment, October 2008
- Younger respondents critical of download quality
- Youngest respondents most likely to condone piracy
- Figure 63: Attitudes toward audio entertainment, by age, October 2008
- Higher earners more likely to buy and prefer MP3 format
- Figure 64: Attitudes toward audio entertainment, by household income,
October 2008
- Race and Hispanic Origin
- Asians show greater adoption of online distribution and technology
- Figure 65: Where music is purchased, by race/Hispanic origin, April
2007-June 2008
- Figure 66: Where DVDs are rented, by race/Hispanic origin, April
2007-June 2008
- Figure 67: Where DVDs are purchased, by race/Hispanic origin, April
2007-June 2008
- Figure 68: Incidence of media purchases in previous year and average
number purchased, by race/Hispanic origin, April 2007-June 2008
- Figure 69: Ownership of new technologies, by race/Hispanic origin,
October 2008
- Figure 70: Attitudes toward video entertainment, by race/Hispanic
origin, October 2008
- Figure 71: Attitudes toward audio entertainment, by race/Hispanic
origin, October 2008
- Appendix: Other Useful Consumer Tables
- Retail channels
- Figure 88: Where music is purchased, by gender, April 2007-June 2008
- Figure 89: Where DVDs are purchased, by gender, April 2007-June 2008
- Figure 90: Where DVDs are purchased, by age, April 2007-June 2008
- Incidence of media purchase
- Figure 91: Incidence of media purchases, by gender, April 2007-June 2008
- Incidence of media rental
- Figure 92: Incidence of DVD rental, by gender, April 2007-June 2008
- Figure 93: Incidence of DVD rental, by race/Hispanic origin, April
2007-June 2008
- Attitudes and motivations
- Figure 94: Attitudes toward video entertainment, by gender, October 2008
- Figure 95: Attitudes toward video entertainment, by household income,
October 2008
- Figure 96: Attitudes toward audio entertainment, by gender, October 2008
- Appendix: Trade Associations
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