Electronics Fine – Content Struggles

Is digital media recession-proof?

More than one-third of US adults surveyed recently by The NPD Group will spend less on entertainment products and devices in 2008 than they did in 2007. Only 18% of respondents cited in NPD’s “Entertainment Trends In America” report said they planned to spend more.

Teen respondents were more likely to increase their entertainment spending than the general population; 30% of teens surveyed said they would spend more than last year, while one-quarter planned to spend less.

NPD said that generating excitement about consumer electronics and entertainment media could be the key to [electronic and media company] success in the current economic environment.

The company also said that consumers who plan to spend more on entertainment this year are primarily focused on buying new devices rather than on purchasing new content. This finding indicates that the industry will have to work harder to successfully market entertainment content to this group of consumers.

Recent data from the Consumer Electronics Association (CEA) confirms that entertainment device sales remain strong.

The average US household surveyed for the CEA’s “Household CE Ownership and Market Potential Study” spent $1,405 on consumer electronics in the 12 months prior to April 2008, up $120 over the year before. The CEA said that the industry was on pace to pass 2007’s $161 billion in overall shipment revenues.

“Thanks to the switch to digital broadcast in February 2009 and the industry’s decision to back Blu-Ray technology, consumer electronics will get a real boost this year,” said Lisa Phillips, senior analyst at eMarketer.

NPD suggested in its report that entertainment media could take a hit this year. Ongoing industry trends tend to support that theory: CD sales have been falling for years, and DVD sales are flattening as well.

Courtesy of http://www.emarketer.com