Study: 20% of U.S. Feels Web Is ‘Essential’

In a big vote of confidence for the troubled Internet media sector, 20 percent of Americans feel that the Internet is the “most essential” medium in their lives, according to new data by radio audience researcher Arbitron and media metrics firm Edison Media Research.

According to the groups’ most recent biannual Internet media and entertainment study, 34 percent of Americans chose the Internet as the most “cool and exciting” medium — one percent less than television. The numbers were much higher among 12- to 34-year-olds, however: 46 percent voted the Internet as the “most essential” medium to their lives, while 29 percent picked TV.

The study, which was based on a survey of about 2,500 consumers, also maintained Arbitron and Edison’s past conclusions that Internet subscribers who have used streaming video or audio during the past week tend to be rabid entertainment consumers — and represent a desirable target demographic.

The nation’s weekly streaming media users — about 16 million strong, the researchers say — bought more than 1.5 times the number of compact discs in the past year than the average American, and went to the movies almost twice as often (about 3.19 times on average) during the past three months. Additionally, 62 percent of online video-watchers have viewed movie trailers or previews on the Web — making trailers and previews their favored Internet content.

“This research indicates that those who consume streaming media most frequently are also the same group that tends to buy more CDs and attend more movies,” said Bill Rose, vice president and general manager at Arbitron’s Webcasting unit. “While some in the entertainment industry have viewed streaming as a threat, the study shows that it really represents a tremendous opportunity.”

The group is appealing for other reasons, as well. Users of streaming media also appear more likely to pay for Internet content. In July, about 22 percent of weekly Internet radio listeners — an estimated 16 million Americans — said that they would be willing to pay a subscription for the Web radio station to which they currently listen the most. In comparison, only 14 percent were interested in paying a fee in January 2002.

Like most “early adopter” consumer segments, monthly streaming media users also tend to be more highly educated and affluent than average consumer. About 57 percent have a household income over $50,000, versus 38 percent of the total population. Roughly 45 percent have a college degree or higher level of education, compared to 32 percent of the total population.

Those characteristics also tend to translate into online buying power. Monthly streaming media users spent $895 on e-commerce during the past year, compared to $596 for online users as a whole.

As a result, the findings would seem to suggest the Internet’s applicability to entertainment marketing, especially — good news for marketers looking to reach an increasingly media-savvy consumer base, and for content producers looking for advertising sponsorship.

“Marketing music on streaming media channels provides access to a lucrative group of record buyers that could be an important key to revenue growth for record labels,” Rose said. “Similarly, movie studios have the opportunity to reach frequent movie-goers by promoting their new films via Webcasting.”

In addition, the study indicated that online media consumption has grown, and will continue to do so — in spite of new fees and the widespread shutdown of streaming radio sites in response to recently levied royalty fees. Instead, the number of consumers who have listened to audio or watched video on the Internet during the past month actually grew slightly from the prior year, from 37 million in July, 2001, to 38 million in July, 2002.

“These numbers are remarkably strong considering the turmoil in the streaming media sector,” said Larry Rosin, president of Edison Media Research. “While a number of radio stations and Webcasters have ceased streaming due to the newly imposed government digital rights fees, consumers are still seeking out compelling audio and video content in record numbers.”

The study also concluded that at-home broadband connectivity — considered a prerequisite for heavy streaming media use — continues to proliferate despite the current economic conditions. Residential broadband adoption has doubled during the past 18 months, increasing from 13 percent of all homes with Internet access to 28 percent of all homes in July, the researchers said.

The study also found that 20 percent of dial-up users say they plan to trade up to broadband within the coming year.

Such potential — along with the recent concern over royalties — indicate a need for streaming media producers to develop original content, Rosin added.

“When the cable industry began to develop compelling, original content, audiences grew dramatically, along with advertising revenues,” he said. “To remain vibrant, the [online streaming media] industry needs to develop ‘must see’ and ‘must hear’ content that will spur consumer awareness and passion.”

Related reading

YouTube-logo-full_color
prime
/IMG/550/200550/google-gmail-logo-320x198
nfl
<