PSound
09-15-09, 08:54 PM
Americans are paying to watch more movies and TV shows on emerging platforms, but there are obstacles preventing this from becoming a major new business, according to participants at Tuesday’s Digital Media Pipeline conference, presented by the Entertainment Merchants Assn.
Digital media revenue will jump about 270% between 2009 and 2013 to $3.28 billion, according to research presented at the conference by Futuresource Consulting. Additionally, at the end of first quarter 2009, 49% of consumers watched at least one hour per week of video online, representing an uptick from 32% who said the same during first quarter 2008, according to research firm Interpret.
However, the vast majority of people enjoy digital media through free streaming, whose ad-supported model doesn’t yet deliver the same financial upside as paid transactions. The current top streaming destinations for film and TV are such free sites as YouTube.com, commanding 38% of the market, and Hulu.com at 29%, noted Interpret.
Consumers who paid or streamed in the last three months watched six free streamed TV shows and four free streamed movies, according to Interpret, compared to two TV shows and two films that they paid to purchase via download.
“The studios are not really set up for ad-supported models,” said Jason Kramer, chief strategy officer at Interpret, noting that banners would be too distracting to run during films. “There needs to be a new model.”
Conference participant NPD Group agreed about consumers’ preference for free digital content. In an NPD survey of DVD owners ages 13-54, 29% of respondents said they’ve watched digital movies through such free methods as streaming, ripping from discs and file sharing. That compares to 23% of people who’ve paid to view movies on cable/satellite VOD, 11% through Web-based rental, 5% through Web-based sell-through and 4% through delivery to game consoles.
There are consumers who say they would pay for digital, but only under certain circumstances that studios don’t appear ready to approve. For example, 30% of people say they would pay for online movies if they were delivered day and date with the film’s release, noted NPD.
“The data is inconclusive as to whether digital rental has a cannibalization factor on DVD,” said Rob Schonfeld, VP of pay-television and interactive media for Disney ABC Domestic Television. But since the profit margin on digital rental is higher than on DVD, the studio looks at it as additive, he said.
Curt Marvis, VP of digital media at Lionsgate, said that the biggest growth in digital delivery is coming from consumers in age groups that are falling away from DVD fastest. Total home entertainment industry revenue can be expected to be flat to slightly down until digital grows enough to cover the decline in physical media, Marvis said.
http://www.videobusiness.com/article/CA6697134.html
Digital media revenue will jump about 270% between 2009 and 2013 to $3.28 billion, according to research presented at the conference by Futuresource Consulting. Additionally, at the end of first quarter 2009, 49% of consumers watched at least one hour per week of video online, representing an uptick from 32% who said the same during first quarter 2008, according to research firm Interpret.
However, the vast majority of people enjoy digital media through free streaming, whose ad-supported model doesn’t yet deliver the same financial upside as paid transactions. The current top streaming destinations for film and TV are such free sites as YouTube.com, commanding 38% of the market, and Hulu.com at 29%, noted Interpret.
Consumers who paid or streamed in the last three months watched six free streamed TV shows and four free streamed movies, according to Interpret, compared to two TV shows and two films that they paid to purchase via download.
“The studios are not really set up for ad-supported models,” said Jason Kramer, chief strategy officer at Interpret, noting that banners would be too distracting to run during films. “There needs to be a new model.”
Conference participant NPD Group agreed about consumers’ preference for free digital content. In an NPD survey of DVD owners ages 13-54, 29% of respondents said they’ve watched digital movies through such free methods as streaming, ripping from discs and file sharing. That compares to 23% of people who’ve paid to view movies on cable/satellite VOD, 11% through Web-based rental, 5% through Web-based sell-through and 4% through delivery to game consoles.
There are consumers who say they would pay for digital, but only under certain circumstances that studios don’t appear ready to approve. For example, 30% of people say they would pay for online movies if they were delivered day and date with the film’s release, noted NPD.
“The data is inconclusive as to whether digital rental has a cannibalization factor on DVD,” said Rob Schonfeld, VP of pay-television and interactive media for Disney ABC Domestic Television. But since the profit margin on digital rental is higher than on DVD, the studio looks at it as additive, he said.
Curt Marvis, VP of digital media at Lionsgate, said that the biggest growth in digital delivery is coming from consumers in age groups that are falling away from DVD fastest. Total home entertainment industry revenue can be expected to be flat to slightly down until digital grows enough to cover the decline in physical media, Marvis said.
http://www.videobusiness.com/article/CA6697134.html