New Data on Consumer Video Spending Misses the Point

Research firm NPD Group released today new data supposedly proving that the digital video revolution is, “probably overblown” (at least for the moment).

The findings:

DVDs are still the most popular format when it comes to how U.S. consumers choose to purchase movies and other video content.

The evidence:

Less than one percent of Americans’ movie budget is currently spent downloading movies and TV shows from the Web.

The only problem here is that NPD Group is asking the wrong question. Polling consumers on where they spend their “movie budget” completely overlooks the fact that consumers need not, in fact, set aside a budget for access to full-length movies online. Hulu, YouTube’s Screening Room, and now IMDB are all pretty compelling reasons why consumers should take their money and spend it on something other than movies online.

What we might take away from this, suggests Silicon Alley Insider’s Michael Learmonth, is that at least we know Apple’s iTunes isn’t dominating the market. Yet.

Meanwhile, NPD has its finger on the pulse of video trends:

New content delivery sources can quickly take root among consumers. That’s why many home video companies are aggressively pursuing digital strategies, because the inflection point will come — it’s just not coming tomorrow.

As for today, here’s how consumers spend their money on video, according to NPD’s “Entertainment Trends in America” surveys:

Movies on DVD: 41%
DVD rentals (including Netflix): 29%
Movie tickets: 18%
TV shows on DVD: 11%
Online video download: 2%