Online Users Watch Less TV

First there was radio, then television, then PCs, and now the Internet. But there’s still only 24 hours in a day. Something had to give, and a report on consumer habits says TV stands to lose the battle for the consumers’ time.

Consumers who use PCs and the Internet more heavily may spend less time watching TV, according to a report from The Yankee Group.

The percentage of consumers characterized as moderate-to-heavy viewers (those watching TV six hours or more each day) declined steadily among homes using computers and the Internet with greater frequency. While 32 percent of US households overall were moderate-to-heavy viewers, the percentage fell to 27 percent among homes with PCs; to 26 percent among online subscribers; and to only 17 percent for homes that said they used their PCs everyday. Among homes reporting daily Internet usage, the percentage of moderate-to-heavy TV viewers dwindled to less than 9 percent.

“As more homes add personal computers and begin to turn to the Internet for news, information, and other content, TV broadcasters will be first to feel the effects of this competition for the viewing audience, since they rely entirely on advertising revenues rather than subscriber fees commanded by cable operators,” Penhune said.

According to the report, titled “TVs, PCs and Beyond: Convergence or Confusion?” households equipped with PCs and online subscriptions are more likely to spend money on cable TV and related services. A survey of 2,000 US homes found that subscription rates for basic cable, enhanced cable, premium channels, Pay-per-View, and Direct Broadcast Satellite (DBS) ran significantly higher among PCs and online homes than for the public overall.

“Despite the sharp downturn in home computer prices, PC owners still tend to be higher-earning households with more disposable income,” said James Penhune, program manager of The Yankee Group’s Media & Entertainment Strategies practice. “These consumers usually spend more for all types of communications products and services.”

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