The movie industry has been hoping that digital downloads of movies will make up for lost revenue of falling DVD sales. In 2007 and 2008, legal movie downloading surged as more and more high profile players entered the market. However, while 2009 saw growth, it was way below analyst expectations and industry experts warn that the financial downturn doesn't explain it all.
A new report by Screen Digest showed movie downloading revenues in the U.S. of $291 million, way below the predicted $360 million haul. The total for 2008 hit $219 million, almost double what it was the year before. "The market just cooled off," said Arash Amel, a research director with Screen Digest. "This wasn't caused by economic factors . . . the level of interest in digital downloads just isn't there."
Consumer confusion is believed to be a large factor in cooling demand. Different avenues provide movie downloads with completely different limitations. "Digital downloading is characterised by its restrictions - it's all about what viewers can't do, rather than what they can do," added Mr Amel.
"Four years ago we thought this business would exceed $1.5bn by 2014 but now we think it will struggle to make $1bn."
Consumer confusion is believed to be a large factor in cooling demand. Different avenues provide movie downloads with completely different limitations. "Digital downloading is characterised by its restrictions - it's all about what viewers can't do, rather than what they can do," added Mr Amel.
"Four years ago we thought this business would exceed $1.5bn by 2014 but now we think it will struggle to make $1bn."
