Few new households are willing to subscribe to the internet, with a new study identifying substantial barriers in luring late adopters online.
According to Parks Associates, the lack of newcomers to the internet will result in limited growth in overall broadband penetration during 2006, with a rise of just 1% expected, reaching 64% up from 63%.
The new The National Technology Scan survey, found that there are currently 39 million US homes without internet access, and among those, just eight million own a computer, with the majority of these PC households showing no desire to subscribe to the internet at “any cost.”
Just two million offline homes in the US are planning to get internet services in 2006, while a further 300,000 homes say they may subscribe if offered a cheaper service.
Commenting on the findings, John Barrett, director of research at Parks Associates said: “We are clearly facing a problem of demand, not supply. Computers and internet service have never been cheaper, yet many households will not subscribe to an internet service at any cost.”
Reasons given by consumers for lack of interest in going online vary, with 31% of households claiming having the internet at work is sufficient for their needs, while another 18% simply said: “I am not interested in anything on the internet.” Just under 40% of households, cited “other” reasons for lack of interest in the web.
Despite this expected slowdown in internet subscribers, online advertising expenditure is forecast to outpace all other media in terms of growth in 2006, with global estimates from Piper Jaffray (see Online Ad Growth To Surpass Expectations In 2006) and investment bank Credit Suisse (see Online Adspend Set To Increase Through 2006) projecting a rise of 30% and 32%, respectively.
eMarketer asserts that the internet looks set to dominate the media world, with 5.4% of all US adspend forecast to be devoted to online advertising in 2006, marking the first time the figure has exceeded 5% (see Top Trends Forecast For 2006).
By 2009, the analyst claims that internet adspend will rise to over $22 billion, representing 7.5% of all advertising spend.
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