News

Although some won't openly admit it, plenty of audiophiles with nice systems also own iPods. And they are not alone. According to figures recently revealed by the Consumer Electronics Association, more than 152 million Americans, representing 70% of the total US adult population, own some kind of portable entertainment device.

While wireless phones and notebook PCs are the most common devices used to access handheld content, the CEA reports that portable music players are continuing to gain traction in the market, with household penetration at 15%, up from 11% in 2004. The study also finds that 68% of online adults use their various devices to listen to music.

However, media junkies are still largely a culture of hunters and gatherers. 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% of online adults take advantage of digital files downloaded to portable devices directly from the Internet or PC hard drive."

CEA's Steve Koenig notes, "Although the digital age is upon us, most mainstream consumers are really only ankle deep in the digital pool. 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."

Koenig adds, "We estimate that consumers who own portable 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."

The CEA says that consumers show a reasonable interest in handheld content subscription services, but its research suggests that lack of awareness may be to blame for the low number of consumers who currently subscribe to such services. The report notes that only 16% of online adults who own a portable entertainment device subscribe to a service that allows access to content, with 35% reporting that they were unaware of any companies that provided such services. Additional consumer resistance to download services' onerous DRM restrictions was not addressed.