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Published by: Mintel International Group Ltd.
Published: Feb. 1, 2009 - 95 Pages
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 1: Total U.S. sales and forecast of recorded entertainment, 2003-12
- Figure 2: Total U.S. sales and forecast of recorded entertainment, at inflation-adjusted prices, 2003-12
- COMPETITIVE CONTEXT
- Strong competition from the internet
- Figure 3: Growth in indexed hours of filmed entertainment consumption per person per year, 2003-07
- Figure 4: 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 5: U.S. sales and forecast of video and audio recorded entertainment, 2003-11
- Sales growth led by digital segments
- Figure 6: U.S. sales and forecast of recorded entertainment, by segment, 2003-08
- Figure 7: 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 8: U.S. sales and forecast of video entertainment, 2003-12
- Figure 9: U.S. sales of physical video entertainment, 2003-08
- Economic downturn boosts video rental sales
- Figure 10: U.S. sales of video rentals and subscriptions, 2003-08
- SEGMENT PERFORMANCE—AUDIO
- Weak economy makes problems worse for sales of CDs
- Figure 11: U.S. sales and forecast of audio entertainment, 2003-12
- Figure 12: U.S. sales and forecast of physical music entertainment, 2003-08
- Music downloads: Online sales explode but shrink music sales overall
- Figure 13: U.S. sales and of digital music downloads, 2004-08
- Music subscriptions showed promise but failed to pop
- Figure 14: U.S. sales of digital music subscriptions, 2005-08
- RETAIL CHANNELS—MUSIC
- Online has grown to become leading music retail channel
- Figure 15: Where music is purchased, by type of store/channel, 2004 and 2008
- Online channel shows strongest skew with age
- Figure 16: Where music is purchased, by type of store/channel, by age, April 2007-June 2008
- Online and A/V stores skew with income
- Figure 17: 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 18: 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 19: Where DVDs are purchased, April 2007-June 2008
- Best Buy and Target positioned for higher earners
- Figure 20: 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 21: Where DVDs are rented, by age, April 2007-June 2008
- Online rentals and Blockbuster skew toward higher earners
- Figure 22: Where DVDs are rented, by household income, April 2007-June 2008
- LEADING RETAILERS
- Dramatic revenue growth in online distribution models
- Figure 23: 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 24: Media spending by recorded media brands, 2006-07
- Television advertising
- Netflix
- Figure 25: Netflix—late fees, December 2008
- Figure 26: Netflix—family viewing, April 2008
- Figure 27: Netflix—customer interviews, December 2008
- Blockbuster
- Figure 28: Blockbuster Total Access, June 2008
- Figure 29: 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 30: 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 31: Total U.S. population, by age, 2003-13
- INCIDENCE OF MEDIA PURCHASE
- Migration from discs to downloads spreads to video
- Figure 32: Incidence of media purchases in previous year and average number purchased, 2004, 2006 and
- 2008
- Adoption of digital downloads skews strongly toward youth
- Figure 33: 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 34: 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 35: 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 36: Incidence of DVD rental and average number rented, 2004, 2006 and 2008
- 25-34s most important to DVD market
- Figure 37: Incidence of DVD rental and average number rented, by age, April 2007-June 2008
- DVD rentals more common among higher earners
- Figure 38: 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 39: 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 40: Use of P2P networks and average items acquired, by media, October 2008
- Piracy begins in the 18-24 age group
- Figure 41: 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 42: Playback medium for shiny discs, by type of disc, October 2008
- Younger respondents find more ways to watch their DVDs
- Figure 43: Medium used to playback DVDs, by age, October 2008
- DIGITAL DOWNLOAD PRACTICES
- PCs are still primary method of media download
- Figure 44: 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 45: Storage of digital downloads, by type of download, October 2008
- ADOPTION OF TECHNOLOGIES
- Interest/ownership rate measures maturities of media technologies
- Figure 46: Adoption of new technologies, ownership and interest in ownership, October 2008
- Consumers need to be convinced of value proposition
- Figure 47: Lack of interest or awareness in new technologies, October 2008
- Younger and higher-earning respondent are earliest adopters
- Figure 48: Ownership of new technologies, by age, October 2008
- Figure 49: Ownership of new technologies, by household income, October 2008
- ATTITUDES AND MOTIVATIONS
- Preferences indicate different video distribution models are viable
- Figure 50: Attitudes toward video entertainment, October 2008
- Under-35s are more passionate but harder to please with movie downloads
- Figure 51: Attitudes toward video entertainment, by age, October 2008
- DRM a barrier to audio growth
- Piracy still condoned
- Figure 52: Attitudes toward audio entertainment, October 2008
- Younger respondents critical of download quality
- Youngest respondents most likely to condone piracy
- Figure 53: Attitudes toward audio entertainment, by age, October 2008
- Higher earners more likely to buy and prefer MP3 format
- Figure 54: Attitudes toward audio entertainment, by household income, October 2008
- RACE AND HISPANIC ORIGIN
- Asians show greater adoption of online distribution and technology
- Figure 55: Where music is purchased, by race/Hispanic origin, April 2007-June 2008
- Figure 56: Where DVDs are rented, by race/Hispanic origin, April 2007-June 2008
- Figure 57: Where DVDs are purchased, by race/Hispanic origin, April 2007-June 2008
- Figure 58: Incidence of media purchases in previous year and average number purchased, by race/Hispanic
- origin, April 2007-June 2008
- Figure 59: Ownership of new technologies, by race/Hispanic origin, October 2008
- Figure 60: Attitudes toward video entertainment, by race/Hispanic origin, October 2008
- Figure 61: Attitudes toward audio entertainment, by race/Hispanic origin, October 2008
- APPENDIX: OTHER USEFUL CONSUMER TABLES
- Retail channels
- Figure 62: Where music is purchased, by gender, April 2007-June 2008
- Figure 63: Where DVDs are purchased, by gender, April 2007-June 2008
- Figure 64: Where DVDs are purchased, by age, April 2007-June 2008
- Incidence of media purchase
- Figure 65: Incidence of media purchases, by gender, April 2007-June 2008
- Incidence of media rental
- Figure 66: Incidence of DVD rental, by gender, April 2007-June 2008
- Figure 67: Incidence of DVD rental, by race/Hispanic origin, April 2007-June 2008
- Attitudes and motivations
- Figure 68: Attitudes toward video entertainment, by gender, October 2008
- Figure 69: Attitudes toward video entertainment, by household income, October 2008
- Figure 70: Attitudes toward audio entertainment, by gender, October 2008
- APPENDIX: TRADE ASSOCIATIONS
AbstractA consistent finding in this report as well as other Mintel reports on technological products is that Asian Americans tend to be early adopters and more aware of tech options (see Race and Hispanic Origin section).
As reported in Mintel’s Asian-American Lifestyles—October 2007, Asians appear to upgrade their technology more frequently, being more likely to have bought a computer within the last 11 months (41% vs. 33% overall).
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