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iTunes Video, Music Consumption Declines

28 Sep, 2011 By: Erik Gruenwedel

Use of the Apple content store continues to flourish as users flock toward apps — less so content — in droves, according to a report

iTunes, Apple’s pioneering online content store, now attracts 20% of all Internet users in the United States (up 3% from 2010) — with many seeking access to myriad apps and less to music, movies and TV programming, according to a new report from The NPD Group.

The Port Washington, N.Y.-based research firm said 19% of iTunes visitors year-to-date have purchased video content (movie or TV program), down 1% from the same period last year.

Music purchases and listening continue to dominate iTunes use, accounting for 54% all user activity, compared with 28% who downloaded a free app and 16% who downloaded fee-based apps — both activities up 4% from 2010.

Among purchase activities, 75% of iTunes users bought music, which was down 7% from last year. About 39% of users bought an app, up 8% from 2010.

Notably, among iPad users the propensity to buy or rent movies declined proportionally to acquiring apps and video games. Conversely, iPod or iPhone users were more likely to buy or rent a movie than acquire an app or game.

The results underscore increased consumer fickleness toward owning content compared to renting it via by-mail, kiosk and subscription video-on-demand channels.

“There's no reason the music or video industry should accept a loss of buyers as device preferences change,” said Russ Crupnick, SVP and entertainment analyst for The NPD Group. “They have significant opportunities to foster discovery, engagement and purchases using the tablet platform.”

Crupnick said the iPad offers studios and content owners myriad opportunities to meld social media, proprietary websites and third-party access to create greater consumer awareness and purchases.

“There is a continuing opportunity to build video and music revenue by creating a linear path from content discovery to content purchasing,” he said.

The data was gleaned from surveys of 4,011 respondents in May who reported using iTunes at least once in the previous three months.



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