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Edition: U.S. Article Comments (0) Save Email Print Reprints Most Popular Most Shared Cancer cells slurp up fructose, US study finds 02 Aug 2010 Analysis: Google takes on Facebook in social games 04 Aug 2010 Dog chews off Michigan man's toe, saves his life 04 Aug 2010 Pakistan's Zardari says war with Taliban being lost 03 Aug 2010 Chinese luxury wannabes try to shake off "Made in China" image 04 Aug 2010 Judge overturns California gay marriage ban | Video 3:21am EDT Geithner blasts Bush policies for debt 04 Aug 2010 UPDATE 5-Intel agrees to end chip war with rivals 04 Aug 2010 Iran's Ahmadinejad unhurt after blast near motorcade | Video 04 Aug 2010 European Factors -- Shares seen higher; BoE, ECB eyed 1:12am EDT Cancer cells slurp up fructose, US study finds 02 Aug 2010 Geithner blasts Bush policies for debt 04 Aug 2010 Dog chews off Michigan man's toe, saves his life 04 Aug 2010 Judge overturns California gay marriage ban | Video 3:21am EDT Analysis: Google takes on Facebook in social games 04 Aug 2010 Quitting smoking may ease stress levels 16 Jun 2010 New health policy: encouraging friendships? 27 Jul 2010 U.S. judge overturns California gay marriage ban 04 Aug 2010 Man jailed for vomiting on baseball fan 03 Aug 2010 RPT- UPDATE 1-World Cup helps Sina score Q2 profit beat 04 Aug 2010 Hollywood glad kids willing to pay for content Digg This Tweet This Share on LinkedIn Share on Facebook Related News Family flicks firing up summer box office Tue, Jul 13 2010 Related Topics Technology » iPad » Film » Media » By Carl DiOrio Thu Aug 5, 2010 1:39am EDT LOS ANGELES (Hollywood Reporter) - These kids are all right. There's a spreading sense of optimism in Hollywood about young consumers' willingness to pay for digital content: Although members of the so-called Napster generation might be lost forever to a collective addiction to pirated free content, their younger siblings offer digital distributors hope of a brighter business future. "You have a whole generation whose attitude toward interactive content is completely different," said Patrick Russo, a principal at the Salter Group advisory firm. "That generation is growing up paying for content. It may be their parents who are actually paying for it right now, but they do recognize that they are paying for content instead of stealing it." Thanks in part to these youngest consumers, consensus estimates put the download-to-own segment of film and TV content on track to grow by an average of 15% or more annually through 2015, and data from tracking firm Rentrak show a 30% uptick in digital revenue from 2008 to 2009. Such double-digit climbs are reminiscent of the early days of DVD, when even modest inroads among early adopters produced big spikes in revenue growth. Electronic-distribution revenue remains relatively modest at about $2.1 billion from a total $20 billion spend last year on purchase or rental of film and TV titles, according to Rentrak data. But most agree it simply is a matter of time before the younger generation embraces digital distribution as their preferred means of enjoying entertainment. "There's an entire generation that doesn't know a world without broadband," Russo said. "When they run to their laptops, they are watching content or downloading content." Salter Group regularly values movie libraries for studios, and digital looms large in their longer-term projections. For studios, future revenue opportunities will be truly global, once the consumer march to digital reaches critical mass. "Say you're an Italian-American who speaks Italian and you want to watch old Italian-language movies," Russo said. "Where are you going to find that? Not at Blockbuster, but you could potentially the Internet." For now, studios are reluctant to rush content offerings online for fear of cannibalizing DVD and other packaged media. But moves including synching disc and VOD releases already are afoot, and it's only a matter of time before studios begin releasing to VOD or other digital platforms even more aggressively. "You'll see more and more innovations of that type going forward," Warner Bros. digital distribution president Thomas Gewecke said. But executives also note that more work must be done to advance consumers' ability to find entertainment online and navigate the array of services offering such content. A clutter of brands vying for traction in the digital space would seem to be a potential source of consumer confusion, though Gewecke said all that's needed are better tools for traversing the digital landscape. "Consumers will continue to have lots of services to choose from, and that's good to have in the marketplace," he said. "We are already seeing growth in paid digital video across a broad swath of demographics. But it is true that the younger demographic is growing up at a time when transactional digital content is becoming a part of the everyday experience." Not that digital piracy died with Napster, and industry efforts continue worldwide to combat content theft on the Internet and elsewhere. But the youngest consumers seem well on board the legit-digital bandwagon. "We're seeing very positive results for younger skewing-content on digital," said Jamie McCabe, Fox's executive vp in charge of worldwide digital platforms. "There's a generation that's had legitimate digital services from an early age and are digital buyers." Fox Home Entertainment's digital version of the recently release kids movie "Percy Jackson & the Olympians: The Lighting Thief" has "exceeded our expectations," McCabe said. John Calkins, executive vp digital and commercial innovation at Sony, cited Youth Trends data suggesting that youthful attitudes toward downloading unlicensed content have "significantly improved" during recent years. A recent Youth Trends study found that nearly half of college-age respondents viewed piracy as unacceptable, compared with only 1 in 10 three years ago. Such evidence comes as welcome news for Hollywood. But gauging consumer sentiment on specific digital pay schemes can be just so much guesswork until the services hit the market. USC's Annenberg School for Communication & Journalism recently surveyed 1,900 consumers and couldn't find a single one who would pay to use the currently free Twitter messaging site. Yet 20% of Roger Ebert's followers on that same site said they would be willing to pay to use Twitter. So much for scientific research. As for marketplace trends, a progressive rise in the number of "interoperable viewing devices" in consumer households -- that's computers talking to TVs -- should help fuel the digital fire. And broadband services continue to snake into ever new global terrain. Even the long-suffering music industry is seeing a significant opportunity from digital distribution. Sales of albums via iTunes and MP3 still trail revenue generated from disc sales in most cases, but a consumer trend toward digitally distributed music is clear. Reflecting that trend, Merge Records band Arcade Fire bowed its third album, "The Suburbs," with MP3 downloads specially priced at $3.99 via Amazon, and Warner Music gave away digital copies of Tom Petty and the Heartbreakers' recently debuted "Mojo" to purchasers of concert tickets. Technology iPad Film Media Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Reader Feedback Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week FindLaw Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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