Broadband Adoption Jumps to 75 Percent of US Consumers

January 18, 2011

A bright spot in internet news, the Nielsen Company’s new “State of the Media 2010″ report indicates a 10% jump in high speed internet adoption among consumers in 2010, up from 65% reported in an FCC study in 2009 (Learn more in my blog Stats on Broadband Adoption and Use in America from March 2010).

Nielsen’s research also indicates another 5% of consumers anticipate purchasing high speed internet access in the near future, which would bring the total percentage of US consumers using high speed access to 80%.

As a nation, the broad adoption of high speed internet is critical to our competitive standing in global competition.  As individuals, high speed access is critical to participation in our world.

There are still 25% (Hopefully soon to be 20%) of Consumers without high speed access

With 1-in-4 consumers still without high speed access – whether by choice or due to lack of access – we have a long way to go bridge the digital divide.  This requires us to continue to address affordability issues, provide community access points through libraries, schools, and other resources, help show the value of high speed access, and address the clear safety and values concerns among the non-adopters. The FCC’s study found that nearly half of Americans who remain offline do so in part because they fear “all the bad things that can happen on the Internet”.

These concerns are not solely the domain of non-adopters. Among those who are already online, the survey found that 65% strongly agree there is too much pornography and offensive material on the Internet. And 57% strongly agree that it is too easy for their personal information to be stolen online, while 46% strongly agree that the Internet is too dangerous for children.

To drive adoption, focus must be placed on three additional fronts: education, infrastructure and enforcement.

Education: Service providers should be encouraged to provide site specific, easily discoverable about the benefits of internet access and clear safety information. This information should be provided in Spanish as well as English on the ISP’s websites, with material targeted to specific demographic groups – not just kids and parents, but seniors, adults, and those with unique opportunities or risks.

Public service announcements and public awareness campaigns focus on two areas: informing consumers about the tremendous benefits of online access, as well as teaching core self-protective measures such as recognizing a phishing scam or teaching consumers to identify how information leaks, and avoid posting personal information in public access websites.

Infrastructure: Service providers should be motivated to enhance their services’ infrastructure to include robust security and safety functionality – such as built-in antivirus software and personal/family safety settings – for all accounts. Companies should be encouraged to innovate and seek competitive advantage on the safety front — and emphasize that innovation in their marketing.

Enforcement: The FCC needs to coordinate with the appropriate agencies to ensure that law enforcement at the local, state and national levels are provided the manpower, training, and resources needed to adequately respond to online crimes. Consumers need to feel assured that crimes committed against them online will not go unpunished.

Service providers should be encouraged to enforce their terms of service policies – today most sites have lofty terms, but fail to adequately enforce these – and an unenforced policy is worse than no policy at all as it creates a false sense of safety.

Service providers should also be encouraged to improve their site moderation and develop technologies to identify and respond to abuses as they occur, as well as providing parents with filtering tools and providing information enabling them to monitor and set clear rules for children’s use.

Until consumers are convinced of the relevance of broadband access in their lives, and are convinced that they can go online safely we will continue to see too large a gap between the government’s access goals and consumer’s adoption rates.

Linda


High speed Internet Use Saves Consumers Nearly $8K Annually?

November 15, 2010

Perhaps the best enticement for bringing non-internet adopters online has just been found. Saving Money.

According to new data from the Internet Innovation Alliance (IIA), “the average US household earning $62,857 per year before taxes can save $7,707 annually through use of broadband internet” (after factoring the average $490 yearly cost of broadband access).

Here’s how:

Housing

Using online apartment postings, which provide rent alternatives cheaper than going rental rates in major US housing markets, broadband internet access can provide annual savings of $974 per year (7.7% of the average US total of $12,697 spent in rent annually) Site examples: www.padmapper.com, www.apartments.com, www.craigslist.org

Food

IIA created a standard basket of monthly groceries to establish a baseline retail cost, then conducted a series of online searches against the baseline to identify cost savings exclusive to the internet. Potential savings of $965 per year, or 25.7% of the $3,573 the average US household spends annually on food at home, is based on cost reductions at the aggregate basket level. Site examples: www.couponmom.com, www.peapod.com

Travel

Online-only deals can save a consumer who spends the average of $7,658 per year on travel up to 20% of that figure, or $1,532. Source: Amadeus Case Study amadeus.com/us/documents/aco/us/BearingPoint.pdf

Automotive

Online-only deals can save consumers an average of 1.5% on the typical $29,217 net outlay for a new American-made car in 2010, or $438. Source: usatoday.com/money/autos/2010-07-12-carprices12_ST_N.htm

Non-prescription Drugs

IIA created a standard basket of the best-selling non-prescription drugs to establish a baseline retail cost and then conducted a series of online searches against the baseline to identify cost savings exclusive to the internet. They determined the average consumer can save $76 per year, or 24.2% of the average $312.60 spent on non-prescription drugs.

IIA applied the 24.2% savings factor to the average annual expenditure on non-prescription drugs, which was derived as 10% of the average annual expenditure on healthcare ($3,126) from the Department of Labor annual study on consumer expenditures. Site examples: www.drugstore.com, www.amazon.com

Gasoline

Searching online for the lowest gas prices within a 10-mile radius of three zip codes for several major US cities, IIA researchers found a savings of 4.76% off the average gasoline expenditure ($1,986) based on the Department of Labor annual study on consumer expenditures. Site example: www.gasbuddy.com

Apparel

IIA created a set of standard baskets of apparel for a man (khakis/jeans and shirts) and a woman (skirts/jeans and tops) to establish a baseline retail cost in each of five price categories. They then conducted a series of online searches against the baseline to identify cost savings exclusive to the internet, and applied 37.12% savings factor to the average annual expenditure on apparel ($1,725) based on the Department of Labor annual study on consumer expenditures, determining yearly savings of $640 on apparel. Site example: www.overstock.com, www.ideeli.com

Newspapers

Reading free online newspapers can save the average consumer 100% of the typical yearly $193 spent on newspaper delivery subscriptions.

Postage

Online bill payment can save consumers 100% of postage paid to mail bills, which averages $47 per year.

Entertainment

IIA conducted a search-based study on restaurant dining, sporting/concert tickets and leisure activities in several major US cities to determine the average consumer can save $2,747 per year, or 51.7% of total average entertainment expenses.

IIA applied a savings factor of 57.6% on dining outside of the home ($2,619) based on the Department of Labor annual study on consumer expenditures, and applied a savings factor of 46% on entertainment such as concerts, events and leisure activities to the entertainment budget ($2,693) based on the Department of Labor annual study on consumer expenditures. Site Examples: www.groupon.com, www.livingsocial.com, www.bargainseatsonline.com

One area that wasn’t specifically called out in the research? Online coupons.

The use of e-coupons and discounts more than doubled in the first half of 2009 compared to 2008 as the worsening economy has brought frugal into fashion.

If you are not familiar with electronic coupons (e-coupons), they are a great way to save even more on the items you purchase. And chances are high that the very websites you shop on offer them if you only take the time to look.

E-coupons may be “pushed” to you by cellphone, iPod, email, Facebook and Twitter, can be purchased on eBay, or found through online searches for manufacturers rebates/special promotions, or simply by searching on an online store’s name plus the word “coupon” “promotion code” or “discount”.  They may also be automatically uploaded to shoppers’ loyalty cards, or found on screens built into grocery cart handles, and so on.  E-coupons can be printed for use in brick-and-mortar stores or entered as promotion codes in online stores.

It is, however, text messaging and email that are emerging as the most popular ways to obtain coupons in the US, with 8.6 million (8%) of the country’s households currently using one or both of these methods to receive money-saving offers, according to an analysis from Scarborough Research that explores and ranks the ways households obtain coupons.

The savings can be significant. If you have not tried e-coupons, you may quickly find yourself a fan as savings of 5-20% off individual items or whole purchases, and free shipping are common.

Why pay more?

Learn more in these to blog posts: Internet Shopping and e-Coupons; Bargain Hunting Online Safely Online Coupons Gaining Momentum; Especially Among Wealthy

Linda


Home Broadband 2010

September 9, 2010

I am continuing my practice of sharing recent internet safety research pieces:

Excerpt

Study by Pew Internet & American Life Project:

After several years of double digit growth, broadband adoption slowed dramatically in 2010. African-Americans experienced broadband adoption growth in 2010 well above the national average

After several consecutive years of modest but consistent growth, broadband adoption slowed dramatically in 2010. Two-thirds of American adults (66%) currently use a high-speed internet connection at home, a figure that is not statistically different from what The Pew Research Center’s Internet & American Life Project found at a similar point in 2009, when 63% of Americans were broadband adopters.

The lack of growth in broadband adoption at the national level was mirrored across a range of demographic groups, with African-Americans being a major exception. Broadband adoption by African-Americans now stands at 56%, up from 46% at a similar point in 2009. That works out to a 22% year-over-year growth rate, well above the national average and by far the highest growth rate of any major demographic group. Over the last year, the broadband adoption gap between blacks and whites has been cut nearly in half:

  • In 2009 65% of whites and 46% of African-Americans were broadband users (a 19-point gap)
  • In 2010 67% of whites and 56% of African-Americans are broadband users (an 11-point gap)

By a 53%-41% margin, Americans say they do not believe that the spread of affordable broadband should be a major government priority. Contrary to what some might suspect, non-internet users are less likely than current users to say the government should place a high priority on the spread of high-speed connections.

In this survey, Americans were asked: “Do you think that expanding affordable high-speed internet access to everyone in the country should be a top priority for the federal government, important but a lower priority, not too important, or should it not be done?” The majority chose the last two options:

  • 26% of Americans say that expansion of affordable broadband access should not be attempted by government.
  • 27% said it was “not too important” a priority
  • 30% said it was an important priority.
  • 11% said it should be a top priority.

Those who are not currently online are especially resistant to government efforts to expand broadband access. Fully 45% of non-users say government should not attempt to make affordable broadband available to everyone, while just 5% of those who don’t use the internet say broadband access should be a top federal government priority. Younger users (those under age 30) and African-Americans were the most likely to favor expanded government efforts towards broadband access, while older Americans were among the least likely to back the expansion of affordable broadband access as a government priority.

Click here to learn more: Home Broadband 2010

Linda


Broadband Adoption Slowing in Spite of National Plan

August 16, 2010

At the same time as the government pushes forward with the National Broadband Plan to provide high speed access to greater numbers of Americans, new research from the Pew Internet & American Life Project indicates that broadband adoption has dramatically slowed in 2010.


What’s driving this paradox?

The 6 primary goals of the Broadband plan are critical to the future economic success of the country. Of these, 3 relate directly to aspects of consumer access:

  • Goal No. 1: At least 100 million U.S. homes should have affordable access to actual download speeds of at least 100 megabits per second and actual upload speeds of at least 50 megabits per second.
  • Goal No. 3: Every American should have affordable access to robust broadband service, and the means and skills to subscribe if they so choose.
  • Goal No. 4: Every community should have affordable access to at least 1 gigabit per second broadband service to anchor institutions such as schools, hospitals, and government buildings.

Compare the government’s goals to key consumer findings from PEW’s Home Broadband 2010 research:

  • Two-thirds of American adults (66%) currently use a high-speed internet connection at home, a figure that is not statistically different from what the Pew Research Center’s Internet & American Life Project found at a similar point in 2009, when 63% of Americans were broadband adopters. (African-Americans are the anomaly with a 22% increase year-over year)

  • Consumers fail to see the lack of broadband as major disadvantage:
    • Job opportunities and career skills: Only 43% of Americans believe that lack of broadband is a “major disadvantage” when it comes to finding out about job opportunities or gaining new career skills. Some 23% think lack of access is a “minor disadvantage” and a significant 28% think it is “not a disadvantage.”
    • Health information: Just over a third (34%) of Americans believe that lack of broadband is a “major disadvantage” when it comes to getting health information. Some 28% think lack of access is a “minor disadvantage” and 35% think it is “not a disadvantage.”
    • Learning new things to improve and enrich life: Less than a third (31%) of Americans believe that lack of broadband is a “major disadvantage” when it comes to learning new things that might enrich or improve their lives. Some 31% think lack of access is a “minor disadvantage” and 32% think it is “not a disadvantage.”
    • Government services: Only 29% of Americans believe that lack of broadband is a “major disadvantage” when it comes to using government services. Some 27% think lack of access is a “minor disadvantage” 37% think it is “not a disadvantage.”
    • Keeping up with news and information: Under a quarter (23%) of Americans believe that lack of broadband is a “major disadvantage” when it comes to keeping up with news and information. Some 27% think lack of access is a “minor disadvantage” and nearly half (47%) think it is “not a disadvantage.”
    • Keeping up with what is happening in their communities: Less than a fifth (19%) of Americans believe that lack of broadband is a “major disadvantage” when it comes to finding out about their local community. Some 32% think lack of access is a “minor disadvantage” and nearly half (45%) think it is “not a disadvantage.”
  • The research also found that 21% of US adults do not use the internet, although one-third of those still have some connection to the web either through family members with access or having used the internet in the past.

Access is not synonymous to adoption

In addition to PEW’s findings that consumers largely fail to see a major disadvantage to foregoing broadband access, two other pieces of research shed light on consumer’s attitudes towards broadband adoption.

The FCC conducted the Broadband Adoption and Use in America survey in late fall of 2009 and found that concern over the lack of safety online is so high among consumers who do not use the internet, that it is a barrier to adoption for 47% of non-adopters who worry “about all the bad things that can happen on the internet”. 65% of non-adopters strongly agreed that there is too much pornography and offensive material on the internet. 57% of non-adopters strongly agreed that it too easy for their personal information to be stolen online. And nearly half (46%) of non-adopters strongly agreed that the internet is too dangerous for children.

Underscoring the concern over personal safety and privacy on the internet among US consumers, a March, 2010 Financial Times/Harris Poll, found that 81% of Americans are concerned about the amount and security of personal online data that can be accessed by cybercriminals and hackers. 62% say social sites like Facebook and Twitter make many people vulnerable to cyber attacks. 61% of Americans are concerned about the amount and security of personal online data that can be accessed by search engines.

You can lead a horse to water, but you can’t make him drink

As these three research studies so clearly outline, providing broadband access alone isn’t enough to compel consumers to adopt the technology. Far too many consumers fail to see the relevance of the technology in their lives, and/or are afraid of the risks technology can introduce to themselves or their families.

To drive adoption, focus must be placed on three additional fronts: education, infrastructure and enforcement.

Education: Service providers should be encouraged to provide site specific, easily discoverable about the benefits of internet access and clear safety information. This information should be provided in Spanish as well as English on the ISP’s websites, with material targeted  to specific demographic groups – not just kids and parents, but seniors, adults, and those with unique opportunities or risks.

Public service announcements and public awareness campaigns focus on two areas: informing consumers about the tremendous benefits of online access, as well as teaching core self-protective measures such as recognizing a phishing scam or teaching consumers to identify how information leaks, and avoid posting personal information in public access websites.

Infrastructure: Service providers should be motivated to enhance their services’ infrastructure to include robust security and safety functionality – such as built-in antivirus software and personal/family safety settings – for all accounts. Companies should be encouraged to innovate and seek competitive advantage on the safety front — and emphasize that innovation in their marketing.

Enforcement: The FCC needs to coordinate with the appropriate agencies to ensure that law enforcement at the local, state and national levels are provided the manpower, training, and resources needed to adequately respond to online crimes. Consumers need to feel assured that crimes committed against them online will not go unpunished.

Service providers to be encouraged to enforce their terms of service policies – today most sites have lofty terms, but fail to adequately enforce these – and an unenforced policy is worse than no policy at all as it creates a false sense of safety.

Service providers should also be encouraged to improve their site moderation and develop technologies to identify and respond to abuses as they occur, as well as providing parents with filtering tools and providing information enabling them to monitor and set clear rules for children’s use.

Until consumers are convinced of the relevance of broadband access in their lives, and are convinced that they can go online safely we will continue to see a gap between the government’s access goals and consumer’s adoption rates.

Linda


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