Video Business

by Danny King

A new report released last week suggests that the decline of the DVD is greatly exaggerated.

Despite the increasing use of digital video recorders and personal computers to watch TV and film content, people spend more time watching DVDs than using their DVRs and viewing online videos combined, according to a Nielsen study. Additionally, people were more than 10 times as likely to watch a DVD as they were to watch a movie in a theater, Nielsen said.

Americans last year spent about 23 minutes a day watching DVDs or using their VCRs, compared to about 15 minutes for DVR viewing and less than three minutes for online video content, Nielsen said, citing a study it commissioned for the Ball State University’s Center for Media Design and Sequent Partners. Live television still dominates content viewing, with Americans watching about five hours of TV a day, while the average American spent about six minutes a day playing videogames on their TVs.

“Contrary to some recent popular media coverage suggesting that more Americans are rediscovering ‘free TV’ via the Internet, computer video tends to be quite small,” the report says. “Despite the proliferation of computers, video-capable mobile phones and similar devices, TV in the home still commands the greatest amount of viewing, even among those ages 18 to 24.”

Last year, U.S. DVD spending fell 5.7% from 2007 to $21.7 billion—marking the second straight annual decline—despite Blu-ray Disc sales tripling to about $750 million, according to data compiled by Video Business and Rentrak. Meanwhile, in February, media giants Walt Disney, News Corp. and Time Warner Inc. either reported lower fourth-quarter earnings at their filmed entertainment divisions largely because of a drop-off in DVD spending toward the end of last year or forecast first-quarter declines in home entertainment revenue.

Still, after live television, DVDs were the most popular form of video viewing despite the fact that U.S. consumption of video in Internet, mobile and time-shifted forms all increased last year, according to two reports released last month. Additionally, people watched the equivalent of about six movies a month on DVDs, compared with about one movie every two months in the theater, according to the study.

Online video viewing surged 15% between the third and fourth quarters of last year, while time-shifted television watching jumped 33% last year from 2007, Nielsen said in a February report. The number of adults who regularly watch current TV shows on the Internet also jumped by about a third, Leichtman Research said in a separate report last month.

DVD’s dominance over DVRs was even more pronounced among technically savvy 18- to 34-year-olds, who watched twice as much content on DVDs as on their DVRs, Nielsen said last week, citing the study. DVDs trumped online video viewing for that age group by about a six-to-one margin, Nielsen said.

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