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NPD: PSP Users Want Better UMD Value

5 May, 2006 By: John Gaudiosi

Nearly two-thirds of PlayStation Portable owners own UMDs. More than two-fifths said the ability to watch movies or TV content on their PSPs was a very important factor in their decision to purchase the device, according to a new report from The NPD Group.

Still, games and downloaded music files are the most popular types of content used by the average PSP user, the report found. And the high price of UMD movies is a significant impediment to buyers.

The report, “PSP Functionality and Content Study,” examined consumer preferences for UMD movies, TV shows and games, as well as downloadable content such as music. The report surveyed 55,000 members of NPD's consumer panel ages 6 to 44.

The report found one-third of PSP users who don't own UMDs said they are likely to purchase a UMD in the near future.

“Success of the UMD format depends on several key factors,” said Anita Frazier, industry analyst for The NPD Group. “PSP users state the main barrier to purchasing UMDs is price, followed by the available movie/TV selection. If the right content was priced more competitively with DVDs, UMD sales may see a lift.”

David Riley, senior marketing manager for The NPD Group, said consumer adoption of UMD movies also slowed due to the proprietary format (can't run on other players). Consumers also stated that small screen size and a combination of price, limited playback and lack of special features (all compared to DVDs) are reasons they do not like the UMD format on the PSP.

“Consumers want a premium product if they're going to pay a premium price,” Riley said. “Portability isn't a strong enough justification for prices significantly higher than those of DVDs, especially when the price of portable DVD players have dropped so much over the past couple of years.”

According to the report, new movies have the highest ownership penetration among three types of movies measured, as well as TV shows. More than half (56.4%) of PSP UMD owners own new movies, while 31.1% own old movies and 7.5% own classic movies. Also, owners of old movies are more strongly concentrated in the 25- to 44-year-old demographic, compared to new movie owners.

Despite the savvy gameplaying demographic, the report found that only 13.8% of PSP users had downloaded movies onto their PSP. Riley said a lot of this has to do with ease of downloading (the technophile vs. the non-technical consumer), availability of content online and limited space on the memory stick.

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