Movie Lovers Shunning DVD, Moving To Download/Kiosk-Based Rental Options

A very interesting new report at the Wall Street Journal has thrown a huge assumption from 2009 in the face of itself. If you'll remember, many entertainment analysts said that consumers could be spending more time in front of the television (instead of at the box office) during 2009 as they struggled to curtail entertainment spending in the face of the recession. It all made sense--consumers looking to cut back would be likely to stay at home on a Friday night and watch something on ABC instead of shelling out $15 per ticket (in large cities, anyway) at the cinema.

In fact, that's exactly what didn't happen. 2009 marked the first year since 2002 that U.S. consumers spent more money buying movie tickets at the theater than they did to watch movies at home. $9.87b was spent at the cinema (a 10% increase over 2008), while sales of DVDs sank 13% to $8.73b. Now analysts are suggesting that shifting trends in the way consumers engage and consume media are to blame/thank, and movie studios are scrambling to alter their business models to compensate.

Without a doubt, the massive success of Netflix and Redbox--both of which offer extremely cheap rental rates of new and old movie releases--has had something to do with this. What evidently happened was that instead of cutting out the cinema in '09, consumers simply cut their spending on those massive DVD collections. They decided to rent instead, and that's definitely hurting the bottom line of the studio. Now, those same studios are looking to at-home rental options that generally charge a bit more in order to get movies in front of faces faster. Call it the "instant gratification premium."

And with boxes like the Apple TV, Vudu and Roku getting hotter by the day, we're not surprised to see studios moving in this direction. It's clear that downloadable media is the future, and it already has a place in the lives of those on the cutting edge of technology. Broadband connections in the U.S. still need to get a touch faster overall before it's more commercially viable, but we're certain that'll come in due time. What about you? Did you spend more or less at the cinema in '09? Did you spend more or less on at-home entertainment compared to '08?