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Deloitte: Tablets Driving Consumers to Rent, Not Buy Movies

20 Mar, 2013 By: Erik Gruenwedel

Apple iPad

A surge in tablet usage contributed to 28% of survey respondents saying they would rent a movie this year, compared with 12% who said they would buy on disc or digital, according to a new report by Deloitte.

The finding is part of Deloitte’s annual “State of the Media Democracy” survey of more than 2,100 consumers, ages 14 and older in the U.S., that found 26% of consumers own a laptop, smartphone and tablet computer. Separately, 75% of respondents own a laptop, compared with 56% who own a smartphone and 36% own a tablet.

The survey reported that tablet ownership increased 177% during the past year, with almost a third of tablet owners saying it is one of their top three most preferred consumer electronic devices. Meanwhile, smartphone ownership increased by 28%, while laptop penetration remained strong.

Indeed, tablet owners said they would stream movies 70% more often than non-tablet owners and intend to watch movies more than any other video content in the next 12 months. The use of multiple devices occurs even inside the home, as more than 80% of consumers are multitasking while watching TV.

Meanwhile, respondents aged 14 to 23 have nearly doubled their frequency of using online video services in the past year, in addition to increasing their frequency of watching TV shows on smartphones five fold, and frequency of watching TV on tablets by 10 times. The survey revealed that more U.S. consumers prefer to rent versus own their TV and movie content, and that they intend to rent versus buy by a ratio of 2:1.

“The explosion of media-capable devices has had a striking impact on consumer behavior that poses interesting challenges for the entertainment industry and longstanding business models,” Alma Derricks, director of Deloitte Consulting, said in a statement. “More than half of consumers have their TVs connected to the Internet in some way, and that group watches TV content from online sources over 40% of the time. This behavior impacts both the entertainment and advertising industries, and highlights the continued importance of using multiple platforms and devices to build brands and engage consumers.”

The survey found that 93% of Americans rank Internet access as the most valued household subscription, and 72% of U.S. households have a computer network or router (up 20 percentage points in the past year). More than half of all consumers are willing to pay a premium for faster Internet connection, with tablet and smartphone owners more inclined to pay for faster connections, as the intent to consume more content over the Internet continues to grow.

“Digital technology continues to transform the high-technology, media and telecom industries, and we expect the pace of change to accelerate in the next few years,” said Gerald Belson, vice chairman of Deloitte and U.S. media and entertainment. “The proliferation of new devices and customer segments opens up new doors for engaging with customers and finding opportunities for growth and innovation.”


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