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Study: Amid economic uncertainty, some choose hardware over content

NPD Group report finds many consumers plan to spend less on entertainment this year. But some plan to spend more, though they see themselves buying gadgets more than content.

Compelling gadgets are the key to consumers' hearts--and wallets--during a recession, according to a consumer spending study.

Of those surveyed, 37 percent of U.S. consumers say they plan to cut back when it comes to entertainment purchases this year, according to an upcoming report from The NPD Group, "Entertainment Trends in America." Just under half of the 11,000 interviewed for the study said they'll likely spend the same amount this year as in 2007.

But what's more interesting is that 18 percent say they plan to spend more, despite widespread concerns over an unstable economy. More specifically, respondents in that group say they see themselves buying gadgets more than content.

"These are the people who tend to be in a higher economic situation so the cost of technology may not be such a barrier for them, whether it's a Blu-ray player or a gaming console or a new iPod," said Russ Crupnick, entertainment industry analyst for NPD. "Those are the things they seem to be anticipating purchasing...That's not to say they're not going to buy movies or music, but their expectation is if they're spending more, they're spending on devices and consumer electronics."

In the recession in 2001, spending on entertainment devices and content remained relatively steady, but this time around, as the price of gas and food continues to climb, the landscape of the consumer electronics industry is very different.

In 2001, there was a new PlayStation game console, and DVD and CD sales were still on the upswing.

"What you're looking at now that's different, especially in music is CD sales have been down pretty significantly. DVD is starting to look like a mature product category," said Crupnick. "The willingness of people in bad times to collect things is less than it was five, six, seven years ago."