Paid Movie Downloads Follow Digital Music's Lead

Through the first half of 2004, paid movie downloads accounted for only 0.35 of video units that were purchased or rented, including traditional channels and pay-per-view (PPV) and video-on-demand (VOD) services, like Movielink and CinemaNow, according to a new study from The NPD Group. From a demographic standpoint, 80% of those paying to rent downloaded movies during this time were male.


The NPD Group said its survey found that as with digital music, the young adult (18- to 24-year-old) age group is taking the lead in paid movie downloading. For January through June 2004, young adults represented 26% of all download rentals. By comparison, this age group represents only 16% of overall video/DVD buyers or renters. Just over half of those downloading movie rentals were younger than 35, while over 80% were younger than 45.


NPD data show that digital music customers tend to be heavier buyers of music CDs, and that pattern is echoed in digital movie rentals. Those consumers paying to rent digital movies from the Web are twice as likely to be heavy movie buyers (i.e., they purchased seven or more movies in the past three months) relative to consumers who acquire movies though PPV or VOD. In addition, 34% also reported being heavy renters (i.e., they rented seven or more movies in the past three months), which is significantly higher than those who used PPV or VOD.


In Q2 2004, Movielink, a broadband VOD service, boasted the largest share of the digital movie rental market with a 33% unit share, followed by MovieFlix with 13%. Compared to the average mix of genres that are rented or purchased, these consumers were much more likely to obtain videos from the Science Fiction/Fantasy genre. The most popular video downloaded during this quarter was "Independence Day," followed closely by "Matrix Revolutions," "Matchstick Men," "Harry Potter and the Sorcerers Stone," and "Star Trek Wrath of Khan."


The NPD Group said its VideoWatch report collects video acquisition information on a continuous basis from members of NPD's consumer panel of more than 2.5 million registered members. Detailed purchase information is collected from an average of 3,000 video buyers and renters each week. http://www.npd.com/videowatch.html