There are all kinds of predictions out there about how the bad economic climate may impact telecom providers. You see arguments on both sides, with negative and positive spins. The latest positive spin comes from Verizon, who has launched a “home enterstayment” campaign, which argues that consumers are more opt to stay home and enjoy their entertainment options, rather than venture out, which may prove to be more costly. Consumers certainly do have more options these days with choices like VOD and HD more widely available. Combine those choices with home theater and surround sound environments, and maybe consumers can better mimic the experiences of the movie theater, ballpark, or live entertainment venue. Verizon recently commissioned a research study, whose findings reveal “a majority (57 percent) [of consumers] plan to spend more time at home turning to their television instead of events outside the home.”
This argument certainly makes logical sense. Consumer discretionary spending is more scrutinized in harder economic times. Why take the kids out to see Madagascar 2 and spend over $50, when you can wait for the HD VOD option, and spend $6? But sometimes logic doesn’t always win. We’ve heard the prediction of the death of the movie theater probably three or four times in the past 25 years, yet they keep building them. There’s still something to be said for getting out of the house and enjoying artery blocking buttered popcorn at the movie theater. So while we may see a bump in home entertainment subscriptions, it’s hard to argue that we’ll see a fundamental shift in long term entertainment spend. It really depends on just how bad economic times truly get. After all, if a significant amount of consumers have to choose food and shelter or HD VOD, I’m betting that HD VOD will lose.