Consumers are decreasing their cinema and DVD viewing because the Internet now offers alternative forms of entertainment, online video being just one of them. They still retain a preference for watching videos offline, but overall use is decreasing due to Internet use, which boosts online video in the process. A second factor is the "free factor." A notable percentage of broadband users watch videos online only because they are free. Conversely, the percentage who would pay for a download rather than a DVD is quite small. Even a general test of home vs. cinema viewing is revealing -- a lackluster percentage of consumers prefer in-home viewing.

From the article, "Europe's Mercurial Online Video Habits" by John Barrett

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