NPD: Entertainment spending to drop in 2008
By Susanne Ault -- Video Business, 4/22/2008
APRIL 22 | The economic downtown will slow consumer entertainment spending, according to the NPD Group.
In its "Entertainment Trends in America" survey, NPD reports that 83% of respondents predict they will spend the same or less on media products this year versus 2007. Of that group, 46% said they would spend about the same, and 37% said they’d spend less on hardware and software spanning home entertainment, music and videogames.
Just 18% of NPD respondents believed they’d hike spending over the prior year. Teens proved the only age group to skew toward increased spending in 2008, as 30% said they would shell out more for entertainment and 25% said less.
“Entertainment has historically been a reasonably recession-proof spending category,” said Russ Crupnick, entertainment industry analyst for NPD. “But in the 2001 recession, there were a spate of new gaming platforms, DVD was a relatively new format, and music CDs hadn’t yet suffered the full onslaught of digital downloading. It appears from our recent consumer surveys that the current economic climate might be more challenging for those who make and sell entertainment products.”
Backers of next-generation devices can take comfort that of those consumers angling to spend more, most were eying such hardware products as Blu-ray Disc players and the latest videogame consoles, added Crupnick. Fewer said they wanted such traditional entertainment products as DVDs and CDs.
Blu-ray players are among entertainment products that people said are relatively high on their spending to-do list, according to the survey. NPD asked consumers how likely they are to purchase about two dozen various media devices over the next six months. Over 10% of respondents said they’d purchase BD hardware, which ranked in sixth place among devices NPD featured. Products that ranked above BD players, in descending order, are Windows laptops/desktops, HD TVs, next generation game consoles and Internet-enabled cell phones. NPD declined to specifically break out purchase intent for each device, but along with BD players, each of these earned marks of over 10% from respondents
Devices that lagged behind this batch, where less than 10% of respondents said they’d be purchasing, include traditional DVD players and such Web-to-TV devices as Slingbox, Vudu and Apple TV.
The consumers indicated their disposable income did not factor into their 2008 purchasing projections.
However, consumers planning to scale down spending said they are motivated by climbing energy and food prices. They thought the economy would worsen through the year, resulting in squeezed disposable income for entertainment spending.
NPD’s "Entertainment Trends in America" survey was based on an 11,000-person sample of U.S. residents ages 13 and older.
