Consumers not scrimping on entertainment subscriptions

Despite economic woes, an annual survey by The NPD Group finds that consumers are still willing to pay for subscription entertainment. In fact, spending is rising. But not all subscription media are benefiting.

According to the latest update to the “Entertainment Trends in America” consumer tracking studies conducted by The NPD Group, even as newspapers and other traditional forms of subscriptions have declined, most forms of entertainment-content subscriptions have been maintained by US consumers this year, despite the recession. Meanwhile, mobile data plans and other newer kinds of subscription services have expanded their customer bases.

Overall monthly per-capita entertainment-content subscription spending rose to $115, which is an increase of nearly 7% since last year.

“Despite concerns that the recession would cause consumers to reduce spending on entertainment subscription services, most forms of subscription entertainment are doing just fine,” said Russ Crupnick, entertainment industry analyst for NPD. “Consumers are clearly looking to the value offered by entertainment subscriptions and like what they get for their money; plus, new technologies and products have helped bolster data plans and other newer kinds of subscription-based services,” he explained.

As of August 2009, 81% of US households subscribed to a television service (satellite TV, basic/premium cable, or fiber-optic television service). A similar percentage of households (76%) paid for Internet subscriptions. 17% subscribed to an online music service or satellite radio; and 14% subscribed to online gaming subscription services.

More traditional forms of entertainment subscriptions, however, did not fare so well. The number of people subscribing to newspapers fell by two percentage points to reach 29% in August 2009. 41% of consumers subscribed to magazines this year, compared to 43% who did so last year.

According to NPD, an influx of new smartphone owners has led to an increase in mobile data-plan subscriptions: 9% of U.S. consumers had mobile data subscriptions this year, versus just 6% last year. 14% of consumers subscribed to a home-video subscription service, like Netflix, this year, which is two percentage points higher than last year.

Note: The NPD Group’s “Entertainment Trends in America” consumer survey update was fielded to members of NPD’s online consumer panel from Tuesday, August 11 through Monday, August 24, 2009. The final report is based on 10,281 completed responses from US consumers. Final survey data was weighted to represent US population of individuals (age 13 and older). All data was tested for statistical significance at 95% confidence level.

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