Broadband Surprise - Internet/Web/Online Service Information

Industry Standard, The, April 9, 2001 by David Lake

Americans are racing to sign up for speedy Net connections.

The economy may be slowing to a trickle, but Americans are increasingly willing to pay for a flood of data. Close to 7 million U.S. households now have some sort of high-speed Internet access, either via cable modem or DSL services, according to Telecommunications Reports International. That's a 165 percent increase over the same time last year -- far more than analysts predicted. Yankee Group, for example, was off by almost 2 million users, a shortfall the company attributes to a faster-than-expected service rollout.

Perhaps even more surprising: People switching to broadband, while making use of the big pipes to download giant files and watch streaming videos, seem to be spending more of their time playing games with each other. According to a study by McKinsey & Co., Net users who've upgraded to high-speed connections spend almost five extra hours online a month, three-fourths of which is devoted to online games. And 60 percent of that gaming time goes to classics like chess or dominoes -- not exactly bandwidth hogs.

One possible explanation: Broadband chess players no longer have to worry about missing phone calls.

                  Broadband Outpaces Estimates in 2000
             U.S. BROADBAND HOUSEHOLD FORECAST BY RESEARCH
                    1999  2000  2001  2002
IDC                 2.0   4.4    8.1  13.9
Yankee Group        1.4   5.0    9.6  14.8
Arbitron            1.9   6.0   11.8  20.0
Jupiter Research    1.8   4.8    8.6  13.3
Forrester Research  2.7   6.2   15.2  25.2
TRI [*]             1.7   6.6    N/A   N/A
IN MILLIONS. (*.)SUBSCRIBERS REPORTED BYBROADBAND PROVIDERS.SOURCES: AS
LISTED
Note: Table made from line graph
                   Broadband's Got Narrow Penetration
              U.S. INTERNET HOUSEHOLDS BY CONNECTION TYPE
             1Q99  4Q99  1Q00  4Q00
Dialup       29.6  42.4  46.7  60.9
Cable modem   0.7   1.6   2.3   4.2
DSL             -   0.1   0.2   2.4
Total        30.3  44.1  49.2  67.5
IN MILLIONS. SOURCE: TELECOMMUNICATIONS REPORTS INTERNATIONAL, JANUARY
2001
Note: Table made from bar graph
                  Broadband Users Look for a Good Time
                   HOURS SPENT AT SELECTED SITES FOR
                           BROADBAND CONVERTS
               WHILE USING         AFTER SWITCHING
               NARROWBAND           TO BROADBAND
                                                            CHANGE
                 % TIME     HOURS      % TIME       HOURS  IN HOURS
                  SPENT     SPENT       SPENT       SPENT   SPENT
Community          43%       6.84        35%         7.49    0.65
Entertainment      14%       2.23        32%         6.85    4.62
Transactions       12%       1.91         9%         1.93    0.02
Portals, ISPs       8%       1.27         5%         1.07   -0.20
News                4%       0.64         4%         0.86    0.22
Other              19%       3.02        15%         3.21    0.19
Total             100%      15.90       100%        21.40    5.50
SOURCE: MCKINSEY & CO., MARCH 2001
Note: Table made from bar graph