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Digital streamers will pay for physical content

Consultancy firm Deloitte has released a preview of its annual State of the Media Democracy, Third Edition, that explores media usages, to be officially released in January at the Consumer Electronics Show (CES) in Las Vegas.

Findings show that a majority of the 2,000+ respondents, surveyed both in the US and abroad, would like to connect their TV sets to the Internet. For the group of 14-25 year olds Deloitte dubs Millennials, whose online viewing tends toward more user-generated content than professionally-produced content, the number interested in watching online content on a big screen was 70% compared to 58% of overall respondents.

As for mobile devices, so-called Millennials treat them primarily as entertainment channels. They spend more time than other groups with all types of media, except television, still the overall preferred type of media. The study revealed these consumers find the Internet to be of equal preference to TV and movies.

Commenting on the study from Deloitte and well as that of market research firm Ipsos that carried out a similar exercise, streaming notes that the traditional wisdom that downloads make more sense for long-form content than streaming appears to be unraveling. Some 57% of respondents have streamed video in the past 30 days, compared to 50% in the same timeframe at the end of 2007.

Ipsos notes that 22% have downloaded video in the past 30 days, a decrease from the previous year. “It appears this trend for long-form content, however, may be due as much to economics as it is to a preference for streaming versus downloading,” says

Ipsos highlights that digital downloads cost the equivalent of their physical media counterparts, and that consumers are "seeking other alternatives rather than paying the current prices associated with a movie or TV show download." In fact, if the choice comes down to download versus buying physical media, the physical wins out.

Deloitte corroborated the findings somewhat, noting that only 15% of respondents would tend toward downloading versus physically purchasing a DVD. They found that 67% of respondents would use their purchasing dollars to buy a physical DVD, even as streaming usage increases.

“The way to drive digital downloads is to drop the price below that of physical media,” comments The number of respondents willing to pay for streamed content – if also given the choice to view ads – dropped from 37 to 26% in the last year. As fewer are willing to pay for content in exchange for an ad-free environment, the trend of pre-roll and interstitials (and perhaps less obtrusive overlay ads) will continue to grow.

The number of adults aged 35-54 who have streamed video in the last 30 days has risen from 49% to 60% year-over-year, driven heavily by female user adoption. “It appears the prevalence of streaming video online among younger males may be approaching a ceiling today," said Adam Wright, Director at Ipsos MediaCT, "whereas the other demographic groups are driving the audience growth here.”

Story filed 21.12.08

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