The wind's out of DVD sales

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It's mostly bad news, but there's a silver lining for DVD retailers: The recession is driving notable declines in disc purchasing, not the spread of digital video distribution. Those are among key findings of a recent consumer survey and DVD market analysis by Nielsen Entertainment.

Movie theater operators won't like another conclusion from the research: Respondents to the March survey listed DVD viewing of recent theatrical releases as their top entertainment preference. That was the first choice of 39% of respondents, with moviegoing ranking second at 17% and playing video games third at 13%.

The ongoing attraction of DVDs coincides with an uptick in consumer interest in rentals. About 11% of those polled said they are more likely to rent newly released film discs than in the past.

Meanwhile, 22% of respondents said they subscribe to an online DVD rental service. That's the same percentage of digital-rental subscribers turned up in a Nielsen survey a year earlier.

"The impact of online video consumption looks to be overstated, considering the amount of press it receives as a threat to packaged media," Nielsen researchers said.

Continuing a well-established trend, males ages 13-34 were found to buy the most new-release DVDs. But 11% fewer did so during the first quarter than in the same period last year.

Overall, fully half of respondents said they can't afford to buy as many discs as before. Teens were the most likely to cite the expense of DVDs as a primary reason for declining disc purchases, at 55% of respondents.

As for how consumers are filling their free time in light of declining disc purchases, 42% said they are watching more live television. But only 19% said they are renting more movies online, and the same percentage said they are playing more video games as a result of their decreased DVD buying.

Asked to name their favorite retailer of DVDs, consumers polled said bigger is better.

About 43% of respondents said they buy the most discs from Wal-Mart, up 2% from a year earlier. Another 15% named Best Buy, though with 2% fewer naming the electronics superstore than a year earlier, there seems little evidence Best Buy has benefited in the segment from the closing of Circuit City stores.

"People are going to electronics centers less," Nielsen researcher Dave Hoffman said. "People are going to value-based retailers."

Of course, film studio execs are less concerned over where consumers buy discs as whether they purchase them.

"The economic concerns have been pretty severe, especially in the studio world," Nielsen researcher Mike Best said.

So it's worth noting that 12% of the consumers polled said they are buying more DVDs than a year earlier and 42% said they are purchasing "about the same" number of discs. About 46% of respondents said they are buying fewer DVDs than previously.

Nielsen Entertainment is a unit of Nielsen Business Media, parent company of The Hollywood Reporter. (partialdiff)
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