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NPD: More People Buy DVDs Than Watch Netflix Streaming

10 Aug, 2011 By: Erik Gruenwedel

Despite pundit proclamations to the contrary, consumers still opt for packaged media over streaming

While Netflix has evolved spectacularly from Internet start-up pitched by Ryan Seacrest to the 800-pound gorilla stalking the home entertainment industry, consumers still purchase more DVD movies than watch Netflix content, an analyst said.

In an Aug. 8 blog post, Russ Crupnick, VP and senior industry analyst with The NPD Group, said retail disc sales figures — while down — underscore the reality that consumers purchase packaged media, provided the new-release titles are retail-worthy. Crupnick said consumers did so in spades in 2010 for hits such as The Hangover, Up, The Blind Side and The Twilight Saga: Eclipse, among others.

“[Pundits have] proclaimed the end of physical media and the supremacy of the digital age,” Crupnick wrote. “That age will come eventually, but today many more people buy DVDs than watch Netflix streaming.”

Echoing sentiments expressed last month by DreamWorks Animation CEO Jeffrey Katzenberg that recent Hollywood movies “suck,” Crupnick said consumers have largely shied away from buying discs of 2011 releases Dinner for Schmucks, Switch, The Tourist and Oscar-winner Black Swan, among others.

When they do buy, purchases trend toward box office hits. The Digital Entertainment Group last week reported that titles released in home entertainment in the first half of 2011 represented a 16% lower box office than titles released during the same period in 2010.

Then there is Lionsgate, which did not release a single new wide-release theatrical title on DVD/Blu-ray Disc and digital in its most recent quarter (ended June 30), compared with three new wide-release theatrical titles releases in the same quarter a year ago.

Industry exceptions include Rio, which 20th Century Fox Home Entertainment said will be its top-selling disc this year, and Warner Home Video’s Harry Potter and the Deathly Hallows — Part 1, which Time Warner CEO Jeff Bewkes said is the top-selling disc of the year in home entertainment.

“The truth is that [movie quality] won’t just be a physical-media problem,” Crupnick said. “Consumers won’t pay for weak titles through video on-demand either. They’ll exhaust saved programs on their DVR or watch ‘Mad Men’ on Netflix.”

About the Author: Erik Gruenwedel

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