TV-DVD biz welcomes downloads

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TV-DVD is still on a sales-growth curve that outpaces the market as a whole even as its digital downloads sibling goes through its first growth spurt, presenters and panelists said Thursday at the fourth annual TV DVD Conference in Century City.

So far this year, DVD sales are up 4% and TV-DVD sales are up 20%, according to research from the NPD Group presented by analyst Russ Crupnick.

According to NPD's consumer polling, 35% of TV-DVD buyers say they plan to purchase more of the product this year compared with 2005, and 55% said they plan to buy the same amount.

Internationally, five regions outside the U.S. -- the U.K., Japan, Germany, France and Australia -- make up 75% of TV-DVD sales, Media Control GfK International's Amy Heller said.

There are many digital options for collecting TV programming these days, from such services as Apple's iTunes, Amazon, Google, MySpace, Yahoo! and AOL Movielink. TV-DVD buyers, Heller said, are twice as likely to also buy programming digitally.

Digital downloads now make up less than 1% of the TV acquisition market, but that's a 255% increase from last year, Crupnick said. They should make up 10%-12% of the market by next year.

Not surprisingly, iTunes is leading the charge with 67% market share in the paid TV download group, Crupnick said.

For the most part, no one views digital downloads as cannibalistic of the packaged TV-DVD business. "We view it as a convenience that will grow the overall pie," said Bill Clark, executive vp and general manager at Starz Home Entertainment (which includes Anchor Bay Entertainment).

Digital also can be used as a way to offer samples of product and drive customers to packaged DVDs, he said.

"We do see it as incremental right now," Warner Bros. Home Entertainment Group senior vp digital distribution Jim Wuthrich said. "What we were surprised (about) was how well full-season downloads seem to be doing."

Consumer habits remain primarily in the living room, said Sean Besser, vp business development at download site Movielink.

The breakthrough will come when consumers can use mobile devices to acquire content and port it to another device, like a TV set, said Sean Carey, executive vp digital distribution and product acquisition at Sony Pictures Home Entertainment. Those devices already are here and getting better, he said.

Pricing, broadband speeds and burning restrictions have forced the industry to take baby steps, panelists agreed.

In the meantime, such social sites as Revver.com and BitTorrent.com that feature user-generated content serve as a strong marketing tool as well as a delivery device. But the future will be a combination of user-generated content that gets fans buzzing and options to purchase copyrighted content, BitTorrent vp business development Brian Taptich said.

The conference, held at the Hyatt Regency Century Plaza, is produced by Home Media Retailing magazine in cooperation with The Hollywood Reporter, DEG: The Digital Entertainment Group and the Entertainment Merchants Assn.
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