More than 152 million Americans – some 70 percent of the total U.S. adult population – own portable entertainment devices, according to a new report issued by the Consumer Electronics Association. The study, “Handheld Content: Measuring Usage and Subscription Service Opportunities,” measured handheld content usage among adults and explored the market opportunities available to companies involved in developing and marketing a wide variety of content for portable devices, such as music, movies, communication applications, and games.
"The increasing number of consumers who own portable entertainment devices is creating a huge market for handheld content," says Steve Koenig, CEA's senior manager of industry analysis. "In fact, we estimate that consumers who own these devices will spend $8.3 billion on entertainment content for them in the next 12 months. As the mix of options unfolds, it's important for the industry to understand what content consumers are most interested in, how they prefer to access it and how much they are willing to pay for it."
Study results indicate that listening to music and communicating with others via email are the most common activities for adults using portable entertainment devices. Some 68 percent of online adults use their devices to listen to music. Wireless phones and notebook PCs are the most common devices used to access handheld content, due in part to the wide variety of content available for these devices. MP3 players continue to gain traction in the market, with household penetration at 15 percent, up from 11 percent in 2004.
The CEA study found that, even though technology and media content are moving rapidly toward the digital domain, much of the content remains in physical form, such as CDs and DVDs. Less than 40 percent of online adults take advantage of digital files downloaded to portable devices directly from the Internet or a PC’s hard drive.
"Although the digital age is upon us, most mainstream consumers are really only ankle deep in the digital pool," says Koenig. "While consumers are beginning to employ digital content for portable devices, it will likely take years before electronic file folders outnumber CD and DVD cases."
According to the study, consumers show a reasonable interest in handheld content subscription services. However, lack of awareness may be to blame for the low number of consumers who currently subscribe to such services. Only 16 percent of online adults who own a portable entertainment device subscribe to a service that allows access to content, with 35 percent reporting that they were unaware of any companies that provided such services. This represents a significant opportunity for subscription-based content providers to educate the market and capture additional revenue.
The handheld content study was designed and formulated by CEA's Market Research Department. The quantitative study was administered via Web form to an online national sample of 1,724 U.S. adults between Aug. 15 and Aug. 22, 2005.
