August 23, 2007 A new IBM survey of consumer digital media and entertainment habits shows audiences are more in control than ever and increasingly savvy about filtering marketing messages. The global findings overwhelmingly suggest personal Internet time rivals TV time. Among consumer respondents, 19 percent stated spending six hours or more per day on personal Internet usage, versus nine percent of respondents who reported the same levels of TV viewing. 66 percent reported viewing between one to four hours of TV per day, versus 60 percent who reported the same levels of personal Internet usage.
Consumers are seeking consolidated, trustworthy content, recognition and community when it comes to mobile and Internet entertainment. Armed with PC, mobile and interactive content and tools, consumers are vying for control of attention, content and creativity. Despite natural lags among marketers, advertising revenues will follow consumers' habits.
To effectively respond to this power shift, IBM sees advertising agencies going beyond traditional creative roles to become brokers of consumer insights; cable companies evolving to home media portals; and broadcasters and publishers racing toward new media formats. Marketers in turn are being forced to experiment and make advertising more compelling, or risk being ignored.
"Consumers are demonstrating their desire for both wired and wireless access to content: an average of 81 percent of consumers surveyed globally indicated they've watched or want to watch PC video, and an average of 42 percent indicated they've watched or want to watch mobile video," said Bill Battino, Communications Sector managing partner, IBM Global Business Services. "Given the rising power of individuals and communities, media and entertainment industry players will have to become much better at providing permission-based advertising and related consumer-driven ratings services."
The steady growth of consumer adoption of digital music, video, and other entertainment services -- though markets are still small by comparison to traditional media -- show households are no longer "one size fits all," and content providers and marketers must follow suit. 23 percent of respondents reported using a portable music service (e.g., iTunes); seven percent reported having a video content subscription for their mobile phones; 11 percent reported a PC-based music service; and 18 percent reported an online newspaper subscription.\
Consumers in a Multiscreen World: A new global IBM survey shows the TV and the Internet are on equal footing as entertainment sources. 66 percent reported viewing from 1 to 4 hours of TV per day, vs. 60 percent who reported the same levels of personal Internet usage. Consumers are increasingly turning to online destinations like YouTube, MySpace, Facebook, games, or mobile entertainment vs. traditional television.
Saul Berman, IBM Media & Entertainment Strategy and Change practice leader, said, "The Internet is becoming consumers' primary entertainment source. The TV is increasingly taking a back seat to the cell phone and the personal computer among consumers age 18 to 34. Just as the 'Kool Kids' and 'Gadgetiers'(1) have replaced traditional land-lines with mobile communications, cable and satellite TV subscriptions risk a similar fate of being replaced as the primary source of content access."
The IBM Institute for Business Value survey of more than 2,400 households in the United States, United Kingdom, Germany, Japan and Australia covered global usage and adoption of new multimedia devices and media and entertainment consumption on PCs, mobile phones, portable media players and more.
Television Viewing Shifts
In the largest digital video recorder market, 24 percent of U.S. respondents reported owning a DVR in their home and watching at least 50 percent of television programming on replay. Surprisingly, 33 percent in the U.S. reported watching more television content than before the DVR. More than twice as many U.K. consumers surveyed use video on demand services than own a DVR, and less than a third of U.K. consumers have changed their overall TV consumption as a result of DVR ownership. In Australia, despite owning a DVR, most respondents prefer live television or replay less than 25 percent of their programming.
Online Content Trends
Consumers are increasingly contributing to online video or social networking sites: nine percent of German and seven percent of U.S. respondents claim to have contributed to a user-generated content site; 26 percent of U.S. respondents reported contributing to a social networking site. While the numbers were slightly less from other countries like the UK (20 percent) and Japan (9 percent), they are also significant. Australia topped all countries surveyed with 36 percent contributing to social networking sites and nine percent contributing to video content sites. Of those who contributed content, an average of 58 percent worldwide did so for recognition and community, not monetary gain.
Mobile Content Trends
In the UK, nearly a third of users who watch mobile TV reduced their standard TV set viewing patterns as a result of new mobile device services. 18 percent said they reduced "normal" television by a little and another eight percent reduced "normal" television by a lot; four percent substituted television on their regular TV with their new device altogether. For respondents in Germany who had watched mobile video, 23 percent prefer to view user generated content, and 21 percent prefer video trailers or promotions.
Survey Methodology and Demographics
Conducted from mid-April through mid-June 2007 by the IBM Institute for Business Value, the Internet survey was split 64 percent female and 36 percent male. It proportionately reached demographic groups 18 years and over with approximately 45 percent surveyed between the ages of 18-34, 25 percent surveyed between ages of 35-44, and 30 percent surveyed age 45 and over. The questionnaire covered 38 questions and generated 885 respondents in the US, 559 respondents in the U.K., 338 respondents in Germany, 263 respondents in Australia and 378 respondents in Japan. Respondents reported a range of household salary levels, though the vast majority was under US $100,000.
This consumer study is a component of the upcoming report "The end of advertising as we know it," co-authored by Saul Berman and Bill Battino, planned for the fall. It is the latest in a series of thought leadership papers including: "The end of television as we know it," "Navigating the media divide: Innovating and enabling new business models" and "Beyond access: Raising the value of information in a cluttered market," providing recommendations for broadcasters, advertising agencies and media distributors including telecommunication and cable companies.
As part of its ongoing consumer research efforts, IBM is making the full survey results available for free download.