As I have been promising/threatening, yesterday I completed my take on how a down economy will affect various types of video in the home. Forrester clients can read the full analysis here.
Something I can share with everyone, client or not, is an interesting analysis I did on consumer spending on audio/video hardware. One of the questions I wanted to answer was what % of entertainment spending do affluent consumers account for. It turns out, a lot. In fact, the 45% of US households that earn more than $50K a year account for 79% of entertainment “fees and admissions” and 62% of audio/video equipment spending. That’s a lot. Interestingly, these wealthier consumer have been increasing their spending on audio/video tech less aggressively than average over the past few years.
I get all of this from the Bureau of Labor Statistics’ Consumer Expenditure Survey (a datasource which, if you know how use it, can answer many of life’s most important questions, and it’s all free).
Just as Jefferson famously said that “the tree of liberty must, from time to time, be refreshed with the blood of patriots and tyrants,” it is similarly true that technology markets must, from time to time, be challenged with a lackluster economy. Not quite as big a deal, but you get my point.
Overall, the losers are new technology platforms like standalone Blu-ray and premium content subscriptions. The winners — at a very critical time for all involved, I might add — are free online video services like Hulu.com and Fancast, including Netflix’s streaming services, newly enriched with additional content. So while Netflix has warned it won’t hit 9 million subscribers as originally hoped in 2008, the millions it does have will rely on the service more than before.