LAS VEGAS - Despite the advent of new high-definition technologies, regular old DVD still has a long life ahead of it as a video delivery medium, said a speaker at this month's Home Entertainment 2006 show here.
However, Russ Crupnick, vice president, senior industry analyst, entertainment, NPD Group, Port Washington, N.Y., delivered one caveat: The studios must provide customers with better content than they are getting.
"The way to salvage another five to 10 years out of DVD is to give people the content they want," Crupnick said during the annual show of the Entertainment Merchants Association, Encino, Calif., formerly the Video Software Dealers Association.
When asked by NPD what would it take to get consumers to buy more software, relatively few respondents said new, high-definition equipment, while the majority said they would need to be convinced that a movie is worth buying, he said. NPD research also found that people are watching DVDs from their collections more often.
"It's really all about price/value. Price/value for my wallet; price/value for my time," Crupnick said, adding that "technology is a great thing," but movie sales trends will not be driven by new equipment.
NPD asked consumers why their interest in purchasing DVDs was declining, and 38% said it was question of value, 22% said they were collecting fewer DVDs, and 19% said they obtained their movies in other ways, Crupnick said. However, a majority of consumers said they prefer to watch movies at home, he added.
Although there's been some decline at the box office, people who frequent theaters are still the best video customers, he noted.
"Fifty-six percent of moviegoers are still buying movies on DVD, 52% of moviegoers are still renting, and 43% of DVD buyers are also renting," Crupnick said. "Thirty-five percent of the people who have online subscriptions, such as with Netflix and Blockbuster, also go into traditional brick-and-mortar rental places to rent.
"Figure out who the heavy buyers are in your customer base, isolate them and target them, because those are the folks that you want. Don't have fear that just because the new business models are rolling out, the old business models are going away. I think the old business models have years to run," he added.
Supermarkets still have potential to build DVD sales if they can communicate their offer to consumers, Crupnick told SN after the session. "People are in a hurry. If you have something exciting, put it on an endcap, put it in the circular, make people aware of it so that you can generate that kind of impulse purchase."
