Digital Video Making Slow Progress

    June 27, 2007

The buying and use of digital video has reached the mainstream, but the online services that allow users to pay to download video are popular with just a small percentage of consumers according to NPD’s "Digital Video in America" report.

"Many consumers are already experimenting with digital video – the very same material you can buy or rent from major retailers," said Russ Crupnick, entertainment industry analyst for The NPD Group. "And yet the video electronic sell-through market has yet to excite the imagination of consumers enough to greatly affect the bottom line."

The NPD report looked at what type of content consumers were paying to download and found more than three-quarters of video purchased was television content. One-third of the purchased TV programs were also available for free on TV network Web sites.

Within the small group of consumers paying to download video files, digital video download services have not become an integrated part of users TV and movie viewing. Thirty percent of users who bought video for download, purchased just one digital video title per quarter and only 14 percent of consumers use digital video download services at least once a month.

"The limited commercial success we’ve seen so far with digital video content has been almost entirely driven by television," Crupnick said.

"Content owners, aggregators and distributors need to look to the factors that have contributed to that success to understand how they can further excite consumer interest and drive digital video revenues."