According to retail research firm NPD Group, 6 million US households that “regularly” use the Internet downloaded a video file from a P2P service in the third quarter. That compares with 1.2 million homes that paid for a video download legally over the same period.
The study blames a combination of increased broadband access, powerful and speedy PCs equipped with DVD readers and writers, portable video devices and next generation P2P file-sharing services for making downloading of video content easier.
Among U.S. households with members who regularly use the Internet, 8 percent, some 6 million people, downloaded at least one digital video file that was 10MB or larger from a P2P service for free in the third quarter of 2006. Nearly 60 percent of video files downloaded from P2P sites were adult-film content, while 20 percent was TV show content and 5 percent was mainstream movie content.
Now how many people were surveyed is unclear, and is very important for determining the strength of its conclusions but, the results are still interesting nonetheless as they give some insight into the online habits of regular internet users.
The fact that the minimum threshold for downloaded video files is 10 MB is also a point of concern, as that can mean anything from a quick “Daily Show” snippet to one of those YouTube webcam clips.
Also, how was it determined what content should or should not have been paid for? Was the decision left up to the respondents or was it determined by those who conducted the survey? Anything less than 100MB probably didn’t need to be paid for, as even the smallest of commercial-free TV episode downloads will at the very least be 140MB or so in size.
“While video P2P downloading is less pervasive right now than for music, it is a crucial issue for the film industry to keep track of,” said Russ Crupnick, vice president and senior industry analyst for The NPD Group, “Even though right now the majority of downloaded video content is adult-film content, the amount of intellectual property stolen from mainstream movie studios, networks, and record labels will continue to rise, unless strong and sustained action is taken to prevent piracy.”
The study goes on to say that 2%, or 1.2 million, of US households with internet access paid for a video download from an online video store in the third quarter of 2006.
Apple’s iTunes led the market for paid digital video downloads, with 90%, or nine in 10 downloads, followed by Vongo, which accounted for 5%, Movielink with 3%, and less than 1% for CinemaNow.
Of the content that was paid for and downloaded, 62% was TV programs, 24% was music video content, and 6% was mainstream movie content.
“Paid usage could double or triple within the next year as more content comes online, consumers acquire more video-enabled players and movies are offered that consumers can actually burn to DVD,” Crupnick noted. “The competition between Apple’s iTunes/iPod juggernaut and Microsoft’s Zune platform will whet consumers’ appetites for digital video, though it will be quite a long time before we see consumers completely abandon the DVD in favor of digital downloads.”
Considering some of the major flaws I see in the study, though to be more conclusive I’d have to see the actual data and research study methods, its results should be taken with a grain of salt. Certainly the movie industry would be wise to learn from the well-known missteps of the music industry but, in many ways they have.
There was the previous announced partnership between a number of Hollywood studios and BitTorrent Inc. to use it’s P2P BitTorrent platform for the easy and quick distribution of video files in a format and method already well-known to regular users of file-sharing programs and P2P networks.
There was also the recent news that Azureus, of the BitTorrent client server by the same name, was teaming up with the BBC to offer TV content via its Zudeo video content store and file-sharing website.
These events both bode well for the health of the movie and TV industry, and if proven successful could eventually be the mainstream model that everyone can embrace.
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I think that the events of the past couple weeks – several BT applications going to pay for download status and partnering with studios mean good things for the movie industry overall. I don’t think that digital media can be overestimated at all – I think more people will buy their products if they can do so easily legally and from their living rooms and the studios will be happy because there’ll be more money and less illegal downloading. People gravitate toward that which is easiest so I think services like this will be a big hit. I wonder how long it will take before all teh major torrent players switch to a pay for download type system?
Well it ALL DEPENDS….will they DRM it to death? That is a killer right there people don’t like renting downloads that dissappear after a fews days. Also how fast are the speeds? Are they going to allow it to be burned?
It is questions like these that they have to address. ANYONE can come up with a DRM’ed site that costs more to rent a film on it than in blockbuster……what I have not seen yet is a site with decent quality content reasonable pricing No DRM and one that is able to reimburse the UPLOADER if their computer is used to distribute content. by give them some download credit or some other payment.
They are trying I will give them that but compared to what is out there…even on sites such as youtube..(we won’t even get into what is available on newsgroup and torrent sites) I think the media companies have a LONG way to go before they finally come up with a business model that most people would not mind paying for.