April 24, 2008
Report: Consumer Spending on Entertainment to Decrease in the U.S.
By Nathesh, TMCnet Contributor
A recent research report from the NPD Group (News - Alert) has revealed that U.S. consumer spending on entertainment and other related devices is expected to be down this year following the current challenging economic condition.
The report, “Entertainment Trends In America,” says 37 percent of Americans are considering cutting spending in entertainment against the 18 percent who anticipate spending more.
The report also notes that only 46 percent of consumers will spend the same amount in 2008 as they did in 2007, and those who anticipate spending more this year, are teenagers.
"Entertainment has historically been a reasonably recession-proof spending category," said Russ Crupnick, entertainment industry analyst for NPD. "But in the 2001 recession there were a spate of new gaming platforms, DVD was a relatively new format, and music CDs hadn't yet suffered the full onslaught of digital downloading. It appears from our recent consumer surveys that the current economic climate might be more challenging for those who make and sell entertainment products."
Consumers have not only felt the impact of rising food and oil prices, but with the economy expected to get worse, finances will be strained, and people are being forced to spend their money carefully.
This mindset is prevalent to people of all income groups, but less in people who earn more than $100,000 per year.
The entertainment industry, according to the report, will find it hard to reach out to more audiences and will have to strain harder to market their products, since consumers who plan to spend more on entertainment this year are primarily focused on buying new devices like game consoles and the new HD/Blu ray players rather than buying standard content like movie DVDs or music CDs.
The slump in economy in the US is not just hitting the entertainment industry alone but also other segments as well. Another report from Hollywood Financial forecasts that the recession will hit movie theaters, studio spending, special effects houses, and more.
Nathesh is a contributing editor for TMCnet. To read more of Nathesh’s articles, please visit his columnist page.
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