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NPD: UltraViolet Users Buy More Digital Content

11 Aug, 2014 By: Erik Gruenwedel

About 50% of registered UV users bought a digital movie in the past year, compared with 11% of non-registered users

UltraViolet, the industry-backed initiative to spur physical and digital content sellthrough through a cloud-based ecosystem appears to be working — for digital content, anyway.

The NPD Group found that about 50% of registered UV users bought a digital movie in the past year, compared with 11% of non-registered users. Not only are UV users more likely to make an electronic-sellthrough transaction, but also just over half of those who had never made an EST purchase prior to signing up for UV have since made a digital purchase.

Justin Bailey, director of industry analysis for entertainment with The NPD Group, in an Aug. 11 blog, contends the home entertainment industry would be wise to direct consumers toward a physical/digital ecosystem (i.e. UltraViolet) rather than inundating the market with myriad digital-only platforms and deluding consumer response.

“It appears those who sign up in order to redeem a Blu-ray Disc or DVD code are discovering EST via retailers and then, in some cases, choosing to buy digitally rather than on disc,” Bailey wrote.

Indeed, more than 14% of all digital content purchases are made by UltraViolet users. Notably, the NPD also found that iTunes users buy an average of seven electronic titles a year compared with 3.6 titles among non-iTunes users.

The NPD found that the consumers least likely to use UltraViolet are those who were already part of an alternative digital ecosystem. In other words, if a person was already buying EST through iTunes or Amazon Instant Video — and using the platforms’ cloud-based storage systems — they would be less likely to switch to UltraViolet or use multiple services.

Through the first half of the year, EST transactions increased 43% to $330 million, compared with $231 million from the previous-year period, according to DEG: The Digital Entertainment Group. While notable in its trajectory, the tally represented just 18% of packaged media’s $1.8 billion in sales.

So while physical transactions continue to erode — down 13% through June 30, Blu-ray sales rose 10% in the second quarter alone. This is important since most BD releases include UltraViolet access codes.

The NPD suggests home entertainment studios and distributors continue to increase EST awareness among disc consumers through UltraViolet so they won’t consider alternative channels.

At the same time, registering for UV and accessing titles from the cloud should be simplified through a starter kit or education video about the ease-of-access on all of their devices.

“People prefer to have their [content] collections in one place, accessible anytime, anywhere. In other words, equip EST buyers with a ‘why-go-anywhere-else’ mentality,” Bailey wrote.



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