NPD: Digital Movie Transactions Up 19% in First Half of 2018

Digital movie purchase and rental transactions increased 19% in the first half of 2018, compared to the previous-year period, according to new data from The NPD Group.

The research group said that as TV-connected devices become commonplace in U.S. homes more consumers are choosing to rent and purchase digital movies, according to a survey of 5,677 U.S. consumers, aged 18 and older fielded from July 30th through Aug. 7, 2018. Trend is compared to the August 2017 survey, which fielded during a similar period last year.

As of August 2018, 61 million households in the U.S. had at least one Internet-connected TV, video game console, Blu-ray Disc player or streaming media player, representing year over year growth of three million. Specifically, households with an Internet-connected TV increased 20% and those with streaming media players grew 17%.

“Growth in digital movie transactions is being driven, in part, by access to TV-connected devices as an increasing number of viewers can simply buy and rent movies right in their living room,” John Buffone, executive director, industry analyst, NPD Connected Intelligence, said in a statement. “While greater access begets consumption, certain digital movie providers facilitate ownership over renting.”

Among the top five digital movie providers, iTunes users have the highest propensity to buy over rent, because Apple’s movie consumers are more affluent and more apt to collect movies. In the 12-months ending August 2018, nearly 24% of iTunes movie transactions were motivated by a desire to build a digital collection, leading to more buying than renting, according to NPD’s VideoWatch Digital service.

Vudu customers were also more ownership focused than the average video consumer, as such 20% of transactions were motivated by collecting. In contrast collecting movies only drove 13% of Amazon Video digital movie transactions, 9% of Google Play movie transactions, and 4% of Microsoft Store movie transactions.

“It’s long been known that collectability drives ownership and that’s no difference in the digital era,” said Ricardo Solar, president of media entertainment for NPD. “Movie fans will always want to own great films, as such, provider agnostic services like Movies Anywhere are critical for enabling digital sales growth.”

 

 

NPD: Retail Websites Fighting Back Against Amazon & Co.

Amazon is the undisputed e-commerce behemoth, generating about $53 billion in revenue in its most-recent fiscal quarter — nearly five times the revenue generated by Walmart.com.

Yet, new data from The NPD Group finds 29% of U.S. online consumer electronics dollar sales were made through traditional retailer websites for the 12 months ending in June. During this timeframe, the retailer ecommerce sites gained online dollar share over third-party ecommerce (i.e. Amazon) primarily in high average sales prices (ASP) for products such as TVs, PCs, tablets, and printers.

Average online spending per purchase was four-times higher on traditional retailer websites ($233/purchase) than through pure-play online retailers ($60/purchase). However, pure play online retailers are seeing an average of five additional annual purchases, when compared to traditional retailer websites, providing more occasions to sell.

Traditional retailer websites made up 46% of online U.S. consumer electronics dollar sales for these higher ASP items, up 3% from the prior-year period. For lower ASP items they make up 13% of dollar sales, as pure play online retailers still dominate this more ‘grab and go’ segment.

“Across the retail landscape traditional retailers are finding success in bringing what they do well in store to the online channel,” Stephen Baker, VP, industry advisor for the TNP Group, said in a statement.

Baker said traditional retail is competing effectively with Amazon and others for higher-priced items by leveraging their merchandising expertise and the strong in-store product selections on their e-commerce platforms.

“This approach is clearly paying off in the CE industry, as evidenced by growing online sales across a variety of categories,” he said.

 

 

DVD/Blu-ray Disc Player Ownership Continues to Decline

DVD/Blu-ray Disc player use remains in decline, with household penetration dropping to 67% in the first quarter of 2018 from 73% at the end of 2017, according to new data from Nielsen.

The drop underscores ongoing changes in consumer home entertainment behavior as fewer people watch, purchase and rent packaged media. Indeed, DVD players could be found in nearly 90% of U.S. households in 2008, despite the fact overall unit sales of DVD players actually declined 25% in the first half of that year, according to The NPD Group.

Among the coveted 18-34-year-old demo in 2018, DVD/Blu-ray player ownership has shrunk to 57.8%, compared to 69% among 30-49-year-olds and 58.6% among 50-64-year-olds, according to Statista.com.

Nielsen contends the average time an adult spent per day using a DVD/Blu-ray player was six minutes in Q1. That compared to 14 minutes with a video game console and 26 minutes with an Internet-connected device.

By comparison, live-TV viewing topped four hours daily, followed by the smart phone (2 hours, 22 minutes) and radio (1:46 hours).

Nine out of 10 U.S. adults use linear platforms in the average week. Live + time-shifted TV viewing reached 88% of persons in the first quarter of 2018, while radio had the largest reach across platforms at 92%.

A silver lining in the trends is that most Blu-ray players are connected to the Internet, thereby enabling access to over-the-top video and subscription streaming services such as Netflix, Amazon Prime Video and Hulu.

Indeed, Nielsen found that many households have access to more than one of the aforementioned SVOD services. Across the total U.S., 27% of TV households have access to only one service and 37% to more than one service. Eleven percent have access to all three.

Meanwhile, Nielsen reported that DVR penetration, which only a few years ago was rapidly expanding in U.S. homes, has seen its growth slow but is still present in 55% of TV households. Newer media, such as Internet connected devices and smart TVs, that enable streaming of content to the TV set, are showing strong year-over-year increases. Both device types are now in 37% and 38% of TV households, respectively.

More Than Half of Active Video Consumers Consume Some Digital Content

More than half (51%) of consumers who are active in buying or renting video content consume at least some digital content, which is 7 percentage points higher than last year, according to a study from The NPD Group.

Among all consumers who purchased or rented digital content, 18% are digital-only video consumers, which is 4 percentage points higher than last year, according to the report.

Still, among consumers who consume both physical and digital video content, 86% continued to purchase physical video discs in 2017.

“In the lifecycle of digital-video adoption, the early-adopter phase has finally given way to the majority phase,” said Ricardo Solar, SVP of video entertainment for NPD, in a statement. “Even so, among consumers who consume both digital and physical video content, the vast majority are still buying and renting physical discs.”

Growth in digital video purchases was driven mainly by heavy users who completed more than four transactions over the previous three months, NPD found. While these consumers represented just one-third of digital video purchasers, they comprised 69% of all transactions last year.

More than half of heavy digital video buyers purchased at Amazon and iTunes, and they over-index at Google Play and Vudu, as well, according to the report.

Digital video rental, or internet video-on-demand (iVOD), also grew last year, due to rental activity from both light and heavy users. Amazon was the retailer of choice for digital rentals, but heavy internet-video renters also over-indexed at iTunes, FandangoNow and Redbox On-Demand.

The research findings come from The NPD Group’s latest “Entertainment Trends in America” report, which is based on a consumer survey fielded from January to February 2018.

NPD: Size Matters on New TV Purchases

The NPD Group June 18 reported that consumers looking to upgrade their television are focusing on larger screen size, in addition to enhanced picture quality.

Of consumers who purchased a 4K/UHD replacement television, 45% wanted a larger screen, 39% sought better picture quality, and 24% purchased because pricing became more affordable.

Port Washington, N.Y.-based NPD cited the data on a survey of 5,300 U.S. consumers, aged 18+ between Jan. 25 and Feb. 8.

The number of consumers that reported replacing an existing TV with a 4K/UHD TV grew from 23% in November 2017, to 28% in February. Desire for a high-quality TV in the living room has been a primary factor in the increase in demand for 4K/UHD, as nearly 62% of 4K/UHD replacement TVs purchased were installed in the living room.

“Approximately 90% of the installed base of TVs in the U.S. is not yet 4K/UHD, meaning there is tremendous opportunity to accelerate the replacement cycle with updated, quality TVs,” Stephen Baker, VP, industry advisor at NPD, said in a statement.

Through February, TV sales of 55-inch and larger screens have grown by 8%, now representing 33% of U.S. unit sales volume. Many of these big screen purchases are being made to replace smaller screens in the home – most notably in the living room.

According to NPD, the average size of a replacement TV intended for the living room was 52 inches. For all other household rooms, the average replacement TV screen size is 43 inches.

“While the number of installed TVs per U.S. household has shrunk slightly in recent years, consumers are continuing to spend on the primary TV in their home, upgrading it to the biggest screen and the best picture they can afford,” said Baker. “Despite the fact that content viewership is splintering among devices, it’s important to note that demand for a great TV to occupy a prominent position in home is not diminishing.”