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Latinos a Burgeoning Market for Home Entertainment

11 Mar, 2004 By: Judith McCourt

The U.S. Latino market is a vibrant segment of the home entertainment landscape.

This rapidly growing population, which forecasts estimate at 40 million strong, is a diverse group made up mostly of Mexicans, Puerto Ricans and Cubans, connected by language but rich with cultural nuances.

According to the Selig Center for Economic Growth at the University of Georgia, the estimated buying power of the U.S. Latino population in 2003 was $653 billion. The Center projects that by 2008 Latino disposable income will reach more than $1 trillion. Selig Center estimates also suggest that in 2005 the economic buying power of Hispanics ($778 billion) will exceed that of the African-American population ($773 billion).

Latinos are avid consumers of entertainment product and have been quick to adopt the DVD technology. DVD penetration in Latino households is on a par with the population at large, with 70 percent of Latino households saying they own one or more devices that can play discs.

Traditional set-top units account for the lion's share of Latinos' playback devices, with 65 percent of the households saying they had a player. More than one-third of the households (34 percent) have multiple set-top units. English-dominant Latino households (those households that responded to the survey in English) run slightly ahead of the adoption curve, with just less than three-quarters having set-top DVD players; Spanish-dominant households (those that responded to the survey in Spanish) lag, with 55 percent having DVD set-top units.

In addition to set-top units, 38 percent of Latino households said they had other DVD playback units such as game consoles and PCs with DVD-playing capability.

The average length of ownerships for DVD players in Latino households is on a par with the population at large, with an average ownership of two years.

Seventy-six percent of Latino households that owned a DVD playback device bought at least one disc last year. The average Latino household bought 16 discs, compared with 19.5 for the population as a whole. English-dominant Latino households bought on a par with households at large, while Spanish-dominant households trailed, with 8.5 purchases in the past 12 months.

Discount stores such as Wal-Mart, Target and Costco are the No. 1 purchase locations for Latino households, with 46 percent citing them as their primary purchase locations. Blockbuster and electronics retailers such as Best Buy and Tower Records, who have aggressively courted Latinos, also scored well -- Latinos favored those purchase outlets at twice the rate of the population at large.

When it comes to renting, Latino DVD households are big players. Ninety-five percent of the respondents said they had rented a video in the past year, compared with 69 percent of all households surveyed.

Blockbuster was the rental destination of choice, with 56 percent of all Latino renters saying Big Blue was their primary rental location.

The outlook for growth in DVD penetration in Latino households in the next 12 months is strong, which bodes well for software purchases and rentals. Latino households are much more likely to be considering purchasing another DVD player in the next 12 months. Thirty-eight percent of the Latino households are thinking about buying another DVD player in the next 12 months, compared with 24 percent of all households.

Video Store Magazine conducts an annual study that looks at trends in home entertainment nationwide. In February and March, more than 1,100 U.S. households were surveyed by phone. As part of the study, 300 Latino households in the top 10 Latino DMAs (designated market areas) were interviewed. Respondents were 18 years or older.

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