Wednesday, March 30, 2016

Trends in Household Spending on Streamed and Downloaded Video

Explosive growth is the only way to describe the trend in average household spending on streamed and downloaded video, according to a Demo Memo analysis of the Consumer Expenditure Survey. Average annual household spending on streamed and downloaded video grew 26-fold between 2005 and 2014, after adjusting for inflation—from $0.68 to $17.80.

In 2005—the first year in which streamed and downloaded video appeared on the Consumer Expenditure Survey—only 0.4 percent of households bought streamed and downloaded video during an average quarter. By 2010, the figure had climbed to 1.4 percent. By 2014, it had soared to 13.1 percent. Streamed and downloaded video ranked a lowly 31st in popularity among entertainment products and services in 2010, based on the percentage of households buying the item during an average quarter. In 2014, it ranked 6th.

To see where this trend is going, compare spending on streamed and downloaded video to spending on cable and satellite television service—which streaming and downloading are in the process of replacing. During an average quarter of 2014, 70 percent of households spent on cable or satellite television service, devoting an annual average of $723 to the service. Explosive growth in household spending on streamed and downloaded video is likely to continue.

Percentage of households spending on streamed and downloaded video during an average quarter (and average annual household spending, in 2014 dollars)
2014: 13.1% ($17.80)
2010:  1.4% ($2.11)
2005:  0.4% ($0.68)

Source: Demo Memo analysis of unpublished tables from the Consumer Expenditure Survey

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