People Stick With Entertainment Subscriptions

tv watcher

Apparently, there are some things -- television and Internet services, specifically -- Americans refuse to do without. According to new research from The NPD Group, U.S. consumers are maintaining their entertainment subscriptions (cable or satellite TV, Internet service, etc.) despite the recession.

"There's been a whole lot of discussion that people would cut cable and satellite services, and substitute with free content," Russ Crupnick, entertainment industry analyst for NPD, tells Marketing Daily. "But [subscription television] is one of those worthwhile addictions that you have. I think most people would rather do without ice cream than the latest episode of 'Mad Men'."

According to NPD, monthly per capita spending on entertainment-content subscriptions rose nearly 7% to $115 since last year. As of August 2009, 81% of U.S. households subscribed to a television service and 76% paid for Internet subscriptions. Seventeen percent subscribed to online music service or satellite radio and 14% subscribed to an online gaming service. Fourteen percent of consumers subscribed to a home video subscription service, like Netflix, a 2% increase over last year.



At the same time, mobile data plan subscriptions (thanks to an influx of new smartphone owners) increased to 9% this year, compared with 6% last year. "Mobile is going to be the platform worth watching," Crupnick says.

The other thing to watch, Crupnick says, is whether U.S. consumers will continue to have time for all of these entertainment options, particularly when Internet-connected televisions reach a mass penetration. "I do start to wonder, at what point do I hear people say, 'I just don't have the time for [subscription entertainment]. I may not renew it,'" Crupnick says. "There's a question of what happens when these things start to collide."

In fact, some areas are already starting to suffer from subscription overload. Only 29% of consumers have newspaper subscriptions, down 2% from last year, and only 41% of consumers subscribed to magazines, compared with 43% who did so last year. "There's a whole generation that has grown up without print," Crupnick says.

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