The NPD Group in a new study suggested that Internet video had done little to dislodge Blu-ray and DVD as the dominant forms for movies. About 78 percent of the money spent on watching at home in the US was spent on one of the two disc formats exclusively while 15 percent were spending it on a hybrid service with both Internet and physical rentals, like Netflix. The remaining seven-plus percent accounted for every other digital and pay-per-view service combined, including iTunes, Amazon Instant Video, and cable or satellite watching.
Viewing habits were also consistent. About 77 percent of Americans saw a Blu-ray or DVD movie in the past three months, exactly the same as the year before, and watched four hours’ worth per week. A full 68 percent said they had watched a movie on cable or satellite TV on an existing subscription service, 49 percent at a theater, and 21 percent through paid video on TV.
NPD analyst Russ Crupnick saw the results as evidence of online video not yet having had a major impact on most brick-and-mortar video. Although Blockbuster declared bankruptcy mostly after it failed to compete with Netfilx, viewers were abandoning it more for different approaches to traditional methods rather than switching over to Internet options. Physical copy rentals and sales dropped nine percent, he said, but viewers were more likely doing something else entirely instead of switching to digital.
“Even though DVD sales and rentals are slowing, there is no evidence that consumers are abandoning physical discs for watching movies, even as the choices for viewing are expanding,” Crupnick said.
Internet video would keep growing quickly but wouldn’t dislodge the establishment in the near future.
The factors behind the slower progress relative to music wasn’t mentioned. Some have pointed to the movie industry deliberately trying to stall the development of digital video. Studios have often insisted on a 28-day delay for availability on Netflix and in a few cases have extended the timeframe or withheld content. At services such as iTunes, movies often aren’t available for rental until significantly after they’re first on sale.
Other possible factors could include the relatively low quality of online video, which is often 720p or smaller, as well as the time and bandwidth needed to download a movie. At 4GB for a two-hour 720p movie, some either can’t stream a movie live or would take too long to download the full copy. Bandwidth caps on Comcast and AT&T may also have had a possibly deliberate chilling effect.
