Thursday, June 5, 2008

Does Recession Mean Increased Interest in Technology?

I have said many times that, in a recession, consumer electronics is likely the one category that won't suffer as much as the others. Today, a study commissioned by Blockbuster reports the same. Why? When people don't have as much disposable income, they stay home. What do they do at home? Watch TV or movies, play videos game, and surf around on the 'net.

So while the restaurant, vacation, and other like recreational industries are suffering, consumer electronics are becoming more central to people's daily lives. Granted, while people are watching more TV at home (87% of survey respondents said they would be using their home theatre more often in the coming months) they aren't exactly spending more money: your cable/satellite bill doesn't go up if you watch more TV, unless you opt for pay channels. But this means that consumers might become more aware of new technologies as they place more focus on digital entertainment. They might learn about channels they don't have and look into subscribing (I'm saving hundreds of dollars by not eating out every Friday anymore, so what's another $5/mo. tacked onto my cable bill?)

As lagging consumers stare at the old clunker of a TV in the middle of the living room that they didn't spend so much time with before, they might even start thinking of upgrading. If you're watching it more now, that justifies the purchase, right?

Of course Blockbuster hopes that this increased interest in "staying home" will also amount to lots and lots of movie rentals. It probably will. And hopefully once the recession has passed, consumers will look to invest in a fancy new home theatre so that they can enjoy these movies, as well as regular TV programming, and even video games, in all their glory.

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