Given that consumer spending has been generally sluggish all year, even before the recent liquidity crisis, it shouldn't be surprising that some discretionary purchases are showing sluggishness as well.
Mid-summer research by Changewave Alliance, for example, has been showing slowing consumption of downloaded media. Compared to a year ago, ChangeWave's latest survey of 2,248 consumers shows entertainment downloading has actually slowed.
Where in July 2007 about 48 percent of respondents reported downloading songs, in July 2008 just 43 percent said they currently were downloading songs. Likewise, where 14 percent of respondents in July 2007 reported downloading movies, just 11 percent said they had done so in July 2008. The same declines were seen in TV show downloading, computer games downloads, music or book downloads as well.
Moreover, the percentage of our respondents saying they do not download entertainment has risen to 41 percent, about six points higher than in 2007.
This sort of behavior might be likened to what one typically sees in times of economic stringency: people downgrade some forms of discretionary entertainment spending. People do not tend to disconnec their cable or wireless services. But they might downgrade a service package to eliminate premium channels like HBO or Showtime.
Downloads of songs, movies or TV shows fall into that category. One can simply download fewer titles to save a little money, while keeping the basic subscription services (broadband stays, but fewer items are purchased).
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