Deloitte: Americans Three-Times More Interested in Renting, Not Buying, Digital Content1 Apr, 2014 By: Erik Gruenwedel
The home entertainment industry’s infatuation with electronic sellthrough of movies and TV shows could be wishful thinking.
A Deloitte study of 2,000 consumers, ages 14 and older in the United States in 2013, found that three-times as many respondents preferred to rent transactional VOD content than buy it. The ratio was two-times in favor of renting than purchasing in 2012.
The survey revealed that consumer interest in streaming content has nearly doubled in the past year (from 17% in 2012 to 32% in 2013), with interest in digital formats outpacing demand for physical media.
This trend is particularly evident in “trailing millennials” (aged 14 to 24), who indicated they now spend more time watching television and movie content on non-traditional devices than on TVs.
Indeed, a majority of “millennials” (66%) spend more time watching content on portable devices other than the television.
Deloitte said that 37% of consumers are now digitally inclined, a 42% growth over the previous year. The growth is primarily driven by continued tablet adoption (33% increase) and, to a lesser extent, smartphone ownership (18% increase). Moreover, women, who made up over one-third (35%) of digital consumers two years ago, now account for 45% of this group.
The trends underscore the rise in subscription streaming, which saw SVOD leader Netflix add more than 6 million subscribers to a domestic base of 31.7 million. Hulu Plus ended the year with 5 millions subs; Amazon Prime reportedly has about 20 millions subscribers.
So while electronic sellthrough increased 44% to $424 million in 2013, according to DEG: The Digital Entertainment Group, it paled in comparison to the $1.4 billion spent collectively on transactional VOD and SVOD.
“The continued rise of the digital omnivore is an indication that consumers, across generations, are hungry for content across devices, especially media and gaming content on mobile devices,” Gerald Belson, vice chairman, Deloitte LLP and U.S. media & entertainment sector leader, said in a statement. “Consumers are now able to watch the content they want on the device of their choosing. As an example, they have decoupled the notion that TV shows have to be watched on home TVs.
Pay TV Still Dominant
Despite increased interest in digital formats, consumers' preference for pay-TV subscriptions remains consistent with last year's finding, as U.S. consumers indicate they are largely content with their current Pay TV services.
The survey notes than only 6% of consumers who have pay-TV services are considering giving up their service in the next year. Furthermore, interest in accessing and purchasing a la carte programming is equal to consumer interest in bundled cable packages with both at 47% in 2013.