News Feed Item

U.S. Consumers Get More Value From Online Media Than Offline, BCG Study Finds

BOSTON, MA -- (Marketwire) -- 02/10/13 -- U.S. consumers derive more value from media online -- net of the associated costs -- than they receive from offline media, according to new research by The Boston Consulting Group (BCG).

BCG calculates that the average U.S. connected consumer, or online user, receives a "consumer surplus" from online media of approximately $970 per year -- or about 2.5 percent of the average U.S. annual income -- compared with approximately $900 for offline media. Consumer surplus is defined as the value consumers themselves place on a media-related activity or product over and above what they pay for it.

The BCG study -- detailed in the report Follow the Surplus: How U.S. Consumers Value Online Media -- examined the surplus consumers derive from each of seven categories -- books, radio and music, U.S. newspapers and magazines, TV and movies, video games, international newspapers and magazines, and user-generated content (UGC) and social networks.

The highest consumer surplus ($311), accounting for about one-third of the online total, comes from UGC and social networks accessed through such platforms as Facebook and YouTube. Books fall at the opposite end of the spectrum: they generate the greatest offline surplus, even taking into account fast-selling e-books.

"The fact that the consumer surplus is already higher for online media is somewhat extraordinary, given that online revenues represent less than 15 percent of the total media industry pie," said John Rose, a BCG senior partner and coauthor of the report. "This surplus will only continue to grow, driven by consumers' appreciation for an expanding array of high-quality content and the proliferation of devices."

The BCG study found that device ownership is increasing, with proliferation driven first by the desire for mobile access, then by fragmentation of use -- that is, consumers using different devices for different purposes in different situations throughout the day.

The average consumer today owns 2.9 devices -- almost double the figure from three years ago -- and expects to own 4.1 devices in three years' time. The number of hours spent consuming online media jumps 50 percent when people start using a second connected device, which is often their first mobile device. It rises again for consumers owning five or more devices, by as much as 25 percent. Owners of multiple devices report big increases in value from online media consumption.

"Shrewd media companies that build effective digital capabilities will enjoy opportunities to extract some of this growing consumer surplus for themselves," said Neal Zuckerman, a BCG partner and coauthor of the report. "They will need to develop products that work across the growing range of devices and capitalize on both new and existing models of commercialization, including advertising, new products and services, an increasing ability to charge for online content, and the still-evolving ecosystem for monetizing the massive volumes of consumer data that the Internet serves up."

Among the other findings:

  • More than two-thirds (68 percent) of consumers say they have more access to higher-quality online content today than three years ago.
  • Nearly two-thirds (62 percent) cite the unique nature of such content as a major reason to go online.
  • The same percentage believes that the Internet promotes U.S. culture abroad.
  • More than three-quarters (77 percent) feel that it is their own responsibility to filter for accurate online content, and they believe they have the capability to do so effectively.
  • By a margin of some five to one, U.S. consumers are more excited about the Internet's potential rewards than they are worried about the potential risks.

The patterns of media consumption in the U.S. are remarkably consistent -- especially for online media -- across age, gender, and region. But what people are doing while they are online can vary. For example, men and women consume the same amount of online media -- 12 hours a week (men consume slightly more offline media) -- but men listen to significantly more music online while women enjoy more online interaction through UGC and games.

Follow the Surplus, released today, builds on BCG's prior analyses of the Internet's economic and business impact on countries and companies. It's also part of the firm's 50th anniversary "Game Changing Program," which throughout the year will pull together the firm's best ideas, insights and practical recommendations for navigating the seismic shifts in today's global economy.

A copy of the report can be downloaded at www.bcgperspectives.com.

To arrange an interview with one of the authors, please contact Alexandra Corriveau at +1 212 446 3261 or [email protected]

About bcgperspectives.com

Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back almost 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed via PC, mobile, iPad, Facebook, Twitter, and LinkedIn.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 78 offices in 43 countries. For more information, please visit bcg.com.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, will deep dive into best practices that will ensure a successful smart city journey.
Qosmos, the market leader for IP traffic classification and network intelligence technology, has announced that it will launch the Launch L7 Viewer at CloudExpo | @ThingsExpo Silicon Valley, being held November 1 – 3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The L7 Viewer is a traffic analysis tool that provides complete visibility of all network traffic that crosses a virtualized infrastructure, up to Layer 7. It facilitates and accelerates common IT tasks such as VM migra...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessi...
operations aren’t merging to become one discipline. Nor is operations simply going away. Rather, DevOps is leading software development and operations – together with other practices such as security – to collaborate and coexist with less overhead and conflict than in the past. In his session at @DevOpsSummit at 19th Cloud Expo, Gordon Haff, Red Hat Technology Evangelist, will discuss what modern operational practices look like in a world in which applications are more loosely coupled, are deve...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Security, data privacy, reliability, and regulatory compliance are critical factors when evaluating whether to move business applications from in-house, client-hosted environments to a cloud platform. Quality assurance plays a vital role in ensuring that the appropriate level of risk assessment, verification, and validation takes place to ensure business continuity during the migration to a new cloud platform.
In his session at 19th Cloud Expo, Nick Son, Vice President of Cyber Risk & Public Sector at Coalfire, will discuss the latest information on the FedRAMP Program. Topics will cover: FedRAMP Readiness Assessment Report (RAR). This new process is designed to streamline and accelerate the FedRAMP process from the traditional timeline by initially focusing on technical capability instead of documentation preparedness. FedRAMP for High-impact level systems. Early in 2016 FedRAMP officially publishe...
Regulatory requirements exist to promote the controlled sharing of information, while protecting the privacy and/or security of the information. Regulations for each type of information have their own set of rules, policies, and guidelines. Cloud Service Providers (CSP) are faced with increasing demand for services at decreasing prices. Demonstrating and maintaining compliance with regulations is a nontrivial task and doing so against numerous sets of regulatory requirements can be daunting task...
Join Impiger for their featured webinar: ‘Cloud Computing: A Roadmap to Modern Software Delivery’ on November 10, 2016, at 12:00 pm CST. Very few companies have not experienced some impact to their IT delivery due to the evolution of cloud computing. This webinar is not about deciding whether you should entertain moving some or all of your IT to the cloud, but rather, a detailed look under the hood to help IT professionals understand how cloud adoption has evolved and what trends will impact th...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
We are always online. We access our data, our finances, work, and various services on the Internet. But we live in a congested world of information in which the roads were built two decades ago. The quest for better, faster Internet routing has been around for a decade, but nobody solved this problem. We’ve seen band aid approaches like CDNs that attack a niche's slice of static content part of the Internet, but that’s it. It does not address the dynamic services-based Internet of today. It doe...
Between the mockups and specs produced by analysts, and resulting applications built by developers, there exists a gulf where projects fail, costs spiral, and applications disappoint. Methodologies like Agile attempt to address this with intensified communication, with partial success but many limitations. In his session at @DevOpsSummit at 19th Cloud Expo, Charles Kendrick, CTO at Isomorphic Software, will present a revolutionary model enabled by new technologies. Learn how business and deve...
In the 21st century, security on the Internet has become one of the most important issues. We hear more and more about cyber-attacks on the websites of large corporations, banks and even small businesses. When online we’re concerned not only for our own safety but also our privacy. We have to know that hackers usually start their preparation by investigating the private information of admins – the habits, interests, visited websites and so on. On the other hand, our own security is in danger bec...
In his session at Cloud Expo, Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, will provide economic scenarios that describe how the rapid adoption of software-defined everything including cloud services, SDDC and open networking will change GDP, industry growth, productivity and jobs. This session will also include a drill down for several industries such as finance, social media, cloud service providers and pharmaceuticals.