Internet Brings Huge Changes In Traditional Media Consumption
The emergence of the internet has had a profound effect on the consumption of other media over the last five years, with its powerful combination of speed, wealth of material and a facility for customisation, proving very attractive to users.
Its timeliness has resulted in a huge growth in users seeking news and financial information via the web rather than television. The percentage of households which turn to the net, rather than TV, for news has grown from 5% to 26% in the last five years.
The internet’s ability to hold large volumes of archived material has also proven instrumental in feeding consumers’ desire for more information. Forrester says that in contrast to the space constraints of recruitment ads in newspapers, online job listings can also offer industry information, salary levels and even career advice. Perhaps more significantly, users can also search classified listings for specific subject matter.
As another example of the internet’s depth, Forrester cites sports websites, which can provide statistics, interviews and merchandise – much more than television or newspapers can deliver. As a result, 41% of households now prefer the web for job listings and 27% use the Net for sports coverage – a fourfold increase since 1998.
Customisation is a further attraction: In traditional media all consumers receive the same content, but online users are able to track specific subjects or pieces of information such as a sports team or stock price performance.
| Which Media Source Do You Prefer For The Following Content?* | ||||||||
| Internet | Television | Newspapers | Magazines | Radio | Wireless device | Telephone | Other | |
| Adult entertainment | 56% | 17% | 8% | 5% | 3% | 3% | 1% | 7% |
| Archived news stories | 76% | 7% | 10% | 1% | 2% | 1% | 1% | 2% |
| Business information | 65% | 5% | 13% | 5% | 2% | 1% | 2% | 8% |
| News | 26% | 41% | 27% | 0% | 4% | 0% | 0% | 1% |
| Greetings cards | 53% | 3% | 3% | 1% | 1% | 1% | 0% | 37% |
| Job listings | 41% | 3% | 48% | 1% | 1% | 1% | 1% | 2% |
| Movie listings | 33% | 8% | 50% | 2% | 1% | 1% | 4% | 1% |
| Personal ads | 38% | 5% | 42% | 3% | 4% | 2% | 1% | 4% |
| Product information | 65% | 7% | 8% | 15% | 1% | 1% | 0% | 3% |
| Property listings | 35% | 3% | 52% | 3% | 2% | 2% | 0% | 3% |
| Sports news | 29% | 37% | 27% | 1% | 3% | 1% | 1% | 1% |
| Stock quotes | 66% | 7% | 21% | 1% | 1% | 1% | 1% | 3% |
| Reference information | 81% | 2% | 2% | 1% | 1% | 0% | 1% | 12% |
| TV listings | 17% | 33% | 35% | 9% | 1% | 1% | 0% | 3% |
| * Survey conducted with US consumers | ||||||||
| Source: Forrester Research, September 2003 | ||||||||
Business model changes lag behind consumer shifts The big question is that if consumer behaviour is changing so profoundly and in favour of the internet, why are traditional media not suffering more severely than seems to be the case. Forrester claims that this is because there is a lag between a shift in consumer patterns and an associated movement in business behaviour.
Old habits die hard and advertising expenditure is particularly slow to move, with online advertising accounting for just 9% of the US ad market and a mere 1.5% of the UK display market.
“Marketers tell us that ad effectiveness in the online channel will surpass that of TV, magazines and newspapers in the next three years. But a lack of research proving online effectiveness, a small broadband audience and intransigence amongst CEOs and tradition-minded brand managers still hold back online spending to 9% of the [US] advertising budget,” says Forrester’s report.
Consumers juggle all media Another factor mitigating against traditional media’s decline is that consumers remain mutlitasking and will often retain their press subscriptions and continue to watch TV, in addition to using (and preferring) the web for many tasks.
Forrester has found that many people will watch television whilst talking on the telephone (58%), reading a newspaper (47%) or magazine (43%) or connect to the internet (18%). The report claims that this erosion of attention, rather than viewership, has not yet translated into declines in advertising and consumer revenues.
Internet content remains free Finally, whilst content on the internet remains largely free of charge, consumers will not be forced to choose between online and offline media. However, as more sites begin to introduce subscription charges the patterns of usage are likely to change more dramatically.
In some cases – and Forrester cites Time magazine as an example – the introduction of online subscriptions may result in a boost in subscription revenues to both online and offline publications. However, in areas like reference information, consumers faced with a dual charge are likely to cease buying offline media like encyclopedia and reference books altogether, warns the report.
Where next? Forrester says that whilst the first decade of the digital revolution pitted the internet against all other media, that era is now over and new forms and channels will see content migrate to three distribution areas. Entertainment will move back to TV as the medium begins to offer more on-demand programming at a higher quality than the PC can manage.
The report says that the growth in broadband services, coupled with a relative dearth of on-demand content on TV, drove entertainment seekers to the internet. However, as cable firms deploy more video on-demand, personal video recorders (PVRs) allow intelligent recording and an associated ‘rescheduling’ of programmes and high definition television (HDTV) makes the whole thing look and sound better than on PC, entertainment will migrate back to the television.
Speciality content, such as reference, statistics and product information, will take up residence on the PC via the internet. The table above illustrates that this trend is already taking place.
“Consumers’ productivity mindset when sitting down at the computer will give more lift to search-based marketing and content alerts and will steadily erode the effectiveness of display-oriented advertising like online banners and pop-ups,” says the report.
Finally, as breaking news and classifieds move over to the web, the print media will be left with the role of commentary and analysis of local news and events, with magazines relying heavily on full-colour photography and a sense of fashionable, ‘carryable’ style, predicts Forrester.