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Report: VOD Surges Despite Economy

By Erik Gruenwedel | Posted: 16 Dec 2008

With nearly 66% of U.S. consumers reportedly altering their spending habits in the fourth quarter due to the economic recession, a new study suggests discretionary entertainment spending is staying in the home, portending new opportunities for broadband-delivered content and services, including video-on-demand (VOD).

The report from Dallas-based Parks Associates said with consumer spending on consumer electronics projected to decline 50% due to the economy, households are shifting to ad-supported and pay-per-view VOD, in addition to movie rentals.

The report found that as consumers cut spending on outside entertainment such as going to the movies, it created greater dependence on at-home entertainment services.

“For household services such as the Internet and pay TV, recessionary concerns have less impact,” said Kurt Scherf, VP, principal analyst, Parks Associates. “Consumers are more likely to cut back on outside entertainment expenses before trimming household services such as home telephone, pay TV and Internet.”

Separately, Parks found that 33% of U.S. broadband households were seeking ways to access their stored media content outside of the home. The research firm forecast that more than 50 million households worldwide would be accessing digital video recorded content outside the home by 2012.

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