According to the NPD Group report, 1.2 million U.S. households purchased at least one video download from an online store during the third quarter of this year. But, the report said, five times as many households may have illegally downloaded video content from free file-sharing sites, with nearly 60 percent of the free content classified as adult material.
“It is a crucial issue for the film industry to keep track of,”' NDP analyst Russ Crupnick said. “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.”
In spite of the growing piracy problem, Crupnick said the video download model would continue to appeal to consumers in 2007.
“[Legal downloads] 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,” he said.
As for the total content download market, Crupnick said film offers the most room for growth, accounting for only 6 percent of the legal download market. TV accounts for 62 percent of the legal download market, with music video content garnering a 24 percent stake.
Crupnick said most consumers who opt for legal downloads turn to Apple’s iTunes store, which dominates the industry with a 90 percent market share. Movie-subscription site Vongo accounts for 5 percent of the market. Movielink has a 3 percent market share, with rival CinemaNow tallying less than 1 percent.
