Sony's Universal Media Discs not Flying

In a new report by The NPD Group, titled PSP Functionality and Content Study, NPD surveyed 55,000 members of its consumer panel, ages 6 to 44, in an effort to examine consumer ownership, usage and attitudes toward Sony PSP functions and content such as games, movies, TV and music.

While games and listening to downloaded music were the most popular content uses for the typical PSP user, almost two-thirds said that they own movie or TV content on Sony's proprietary Universal Media Discs (UMD). Moreover, more than two-fifths said that the ability to watch movies or television content on their PSPs were actually very important factors in their decision to purchase Sony's portable.

We find this survey result to be quite interesting in light of the fact that the UMD market doesn't seem to be doing as well as Sony had hoped it would. In fact, in February several studios announced that they were cutting back support of UMD because of lackluster sales.

Indeed, while UMD movies may have been more popular closer to the time of the PSP's launch, it seems that consumers are purchasing UMDs far less today. "... while one-third of PSP users who don't own UMDs said they are likely to purchase a UMD in the near future, they don't necessarily care about the format in which the content is provided. As retailers and movie studios alike continue to scale back on the number of UMD movies and TV shows they carry or release, the outlook for the UMD format is bleak," states The NPD Group.

"Success of the UMD format depends on several key factors," says Anita Frazier, industry analyst, The NPD Group. "PSP users state the main barrier to purchasing UMDs is price, followed by the available movie/TV selection. If the right content was priced more competitively with DVDs, UMD sales may see a lift. Additionally, UMD sales may benefit if manufacturers and retailers focus on raising awareness and providing easier access."

NPD further notes that because "movies and music appear to be entrenched in terms of penetration, average number owned and importance to the PSP user," ultimately it comes down to providing the right type of content to capture and retain consumers. "For example, television shows and classic movies seem to have more potential than what current ownership reveals, as purchase intent for each is about triple that of ownership penetration."

Overall, it's the multi-functionality of the PSP that has made it as successful as it is today in the U.S. It "has played a key role in the sales and existing user satisfaction of the device," explains NPD.

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