Media Consumption Shifts Content Value

It’s no secret that music sales have tanked over the last several years, and today’s LA Times examines how media consumption is shifting as Hollywood also feels the hurt.

All kinds of media purchases are on the decline, ranging from CDs and DVDs to video games and movie theater attendance. Another major factor impacting the film business is the popularity of renting movies instead of buying them. But according to the newspaper, the most ominous sign of trouble is that the pay-television industry recently suffered a net loss for the first time in history, signaling that consumers no longer see cable as a necessary expense on par with electricity and water.

“The studios and the content companies have become increasingly aware of the problem, but they seem collectively paralyzed about what to do about it,” Craig Moffett, an analyst with Sanford C. Bernstein & Co., told the Times.

The article goes on to point out that technology is making content cheaper and easier to access, but while there has been an increase in online consumption it hasn’t resulted in a corresponding revenue increase. Some analysts believe this may be a permanent shift in the way fans consume media.

According to the newspaper:

Consumers have proved that although they are willing to shell out for gadgets, they view content as cheap filler and are less willing to pay to own it. Because video is seemingly ubiquitous, consumers no longer feel they need to own a DVD or digital downloaded file to watch a movie or TV show.

Another major factor is economic conditions, which the paper says is “widening the gulf between the haves and the have-nots.” Those who are being more negatively impacted by the economy are simply spending less on entertainment.

The “other half” encompasses the lower 40% of American earners, who, after paying for food, housing and transportation, are left with just $100 a month to pay for healthcare, clothing, phone service — and entertainment, Moffett said.

“Right now it is a tale of two cities,” Moffett said. “On the high end, people can’t go up-market fast enough,” he said, referring to affluent consumers who are buying the latest in mobile phones, portable tablets, or Internet-connected TV sets. “Then you have this other half of the country that is being largely ignored in this discussion.”

Sounds like Nashville is singing the same tune.