Consumers Swap Remote Controls for the Computer Mouse and Close Their Books to Cruise the Web

Business Wire, Nov 4, 1998

NEW YORK--(BUSINESS WIRE)--Oct. 28, 1998--

1998 PricewaterhouseCoopers Consumer Technology Survey Shows Average

Home Internet Use Up to 4.8 Hours Per Week - Web Use Eroding

Traditional Media Consumption

Two favorite universal pastimes - vegging out in front of the television and curling up with a good book - are being forced to share center stage in consumers' lives with the Internet, according the 1998 PricewaterhouseCoopers Consumer Technology Survey released today.

A third of Americans polled said that if they did not have home Internet access they would use time spent online to watch television, while another third said their leisure time would go toward reading books, newspapers and magazines. Numbers were similar in the United Kingdom. The results of this survey were released today at the PricewaterhouseCoopers/Business Week Global Convergence Summit in New York. The survey polled 1,000 Americans and 963 British consumers on technology and its impact on their lives.

"The Web is brimming with new services and content that is proving irresistible to consumers, but time spent online increasingly comes at the expense of traditional media, such as television, newspapers, magazines and books," said Kevin Carton, Global Leader of PwC's Entertainment and Media group. "The networks, cable TV, publishers and even Hollywood need to reexamine their business strategies to maintain and grow their share of consumers."

Cyber-Sales Are Up, but Security Still a Worry

Research and e-mail are still the top uses for the Internet, but e-commerce - such as online banking and shopping - is starting to pick up, spurred primarily by the 24-hour convenience of the Web. Researching big-ticket items such as cars, computer equipment or plane tickets triggered respondents to log on 61 and 49 percent of the time, respectively. It is also noteworthy that online marketing efforts are starting to pay off: 82 percent of Americans and 63 percent of Britons who researched a purchase online ended up buying the item. In the U.S., a third translated into online sales, while half were purchased by traditional means.

"E-commerce is clearly bringing 'world wide window shopping' into the home and consumers are taking advantage," said Steven Abraham, Global Managing Partner of PwC's Entertainment and Media Consulting practice. "As the conversion rates of 'shopping' to 'purchasing' grow, e-commerce will become a more critical revenue stream for sellers of all types of merchandise. We are definitely seeing an uptick in the kind of consulting work PwC is performing to help companies tackle this rapidly emerging channel and its attractive profit margins."

But security remains an issue for most web shoppers. Sixty percent of U.S. respondents said they would be likely to spend more if they knew their credit card information was more secure and their privacy was better protected. When broken out by gender, the amounts that the sexes are willing to spend online vary greatly. On average, men said they would be comfortable spending up to $420 for a purchase, reflecting a higher comfort level with online buying than women, who tend to buy less expensive items such as clothing or books, averaging $120 per purchase.

Internet Users Still Have A Need for Speed

Fast, reliable access to the Internet from home continues to be an issue for consumers, according to survey results. Seventy-four percent of U.S. respondents rely on ground telephone lines for their Internet connection, but consumers are open to alternatives. In fact, when a cable company is able to provide this service, 25 percent of consumers said they preferred to consolidate telephone, cable and Internet services through one provider.

"Consumers are increasingly receptive to alternative suppliers who can deliver the integrated services they want and the bandwidth they require," noted Noel Taylor, head of PwC's Consulting services to the InfoComm, Entertainment and Media sectors. "Consumer access is still the paramount asset for communications and cable providers. They need to invest significantly to expand bandwidth into homes and offices, as well as develop a wealth of marketing information so that their ability to deliver consumers is too attractive for content providers to ignore."

Digital TV - What's in it for Me?

The survey also highlights a desire on the part of consumers, both in the U.S. and U.K., to learn more about digital television (DTV). In the U.S., 67 percent of respondents were familiar with DTV, while in the U.K., that awareness reached 87 percent. Yet, few consumers have actually experienced digital television -- only 21 percent in the U.S. and 13 percent in the U.K. Of that number, most (40-49 percent) viewed DTV in a retail setting.

"Consumers just need to know more about how digital television will benefit them, and there is no substitute for seeing it firsthand," said Carton. "Those numbers should shoot up once digital broadcasts begin in the U.S. and the U.K. this November. However, providers of digital television service also need to augment the notion that this is traditional television that just looks better. The fact is that this technology could be viewed as the first step to a combined home computer, television and home video library - all in one."