Addicts in the connected world

August 08, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

Twenty years ago this month, British scientist Tim Berners-Lee worked at CERN in Switzerland on an internet system with a code that could link to “any information anywhere”. On Aug. 6 1991, he sent an email that read: “If you're interested in using the code, mail me ... We are very interested in spreading the web to other areas.”

Boy, were we interested. Two decades later, the World Wide Web connects 30% of the world’s population. The publication of the 2011 Ofcom market report this month is a less momentous event, but its 341 pages offer an interesting insight into the development of the digital age over the past decade. It is a comprehensive handbook of industry data that reveals just how much UK residents live their lives in the connected world.

Both in the home and on the mobile phone, the web has had made its mark on each individual. More than 75% of the population have internet access in their home while 10% also use a mobile “dongle” and 7% rely solely on a mobile broadband service to connect to the web. The days of a single connected PC housed in its own cupboard in the corner of the room have receded as quickly as the radiogram when faced with the transistor radio and the Walkman.

Ofcom reports that the internet in 2011 is at the heart of the way people communicate, find information and seek entertainment. In a poll of 2,073 adults, 37% said they were more or less “addicted” to their smartphones (defined as devices that can access emails, download files, view websites and surf the internet), and that increased to 60% in a survey of 521 teenagers.

Despite the growth in broadband penetration over the past 10 years, retail revenues from the provision of broadband fell to £3 billion in 2010, down from £3.4 billion the year before. Total communications industry revenue, however, has remained remarkably stable over the past decade. It fell slightly from an inflation-adjusted figure of £54.3 billion in 2000 to £53.4 billion last year.

For the first time, the amount spent on web advertising equalled the TV advertising spend in 2010, at £4.1billion or 26% of the total spend on all media. Online advertising grew by 16%, largely at the expense of newspapers and magazines, although all media benefited from the rise in total advertising expenditure over the previous year.

Mobile advertising was up by a remarkable 116% to £83 million although this was a mere 2% of all online expenditure in the UK. The entertainment and media sector spent £23.3 million on mobile advertising in 2009, 62% of the total. The category share fell to 33% in 2010 although this was up by £4 million in absolute terms.

Advertising of consumer goods on mobiles increased from 3% of the total in 2009 to 12% last year. Ofcom ascribes this diversification in spending to the increased use of mobiles in online shopping. It also reflects the changing user-profile, since what was once the preserve of early adopters has become a mass-market product.

“More and more devices are internet-enabled. As a result it is becoming increasingly difficult to separate the use of internet services from television, radio and voice communication services,” the report notes,

Just over a quarter of adults in the UK, an estimated 12 million, have a smartphone and 59% of owners say that they purchased their device within the past year. The top three functions that adults use regularly are email (46%), web surfing (41%) and social networking (40%). Almost half of the teenagers questioned say they own a smartphone (47%) and their favourite activities are social networking (62%), listening to music (62%) and playing games (50%).

The enhanced functionality of modern mobile devices affects many leisure activities. Both adults and teenagers claim to participate in fewer activities since they acquired a smartphone. Two-thirds of teenage smartphone users say that now they spend less time to play games on a console or computer, take photos with a camera, use a PC to access the internet, watch TV or read books.

The entertainment industry has been slow to react to this changed pattern of behaviour, which affects both young and adult audiences. The time spent on fixed-line internet by people aged 12 and over averages 53 hours a month with a peak at 65 hours among males aged between 25 and 34. Unlike mobile use, this time might be spent otherwise watching broadcast TV or DVD/Blu-ray content.

Watching television remains the dominant media activity, according to the Ofcom report. Viewers spent an average of four hours a day in front of the TV screen in 2010 and time-shifted content from a DVR accounted for 7% of all viewing time.

Ofcom reports that the main use for both fixed and mobile devices among all generations is to send emails and engage in social networking. These activities continue whenever the user has the opportunity at home or at work. The report notes also that the use of social networks could plateau. It grew just 1.3% in the year to April 2011 and only 3% of non-users say that they are interested in signing up.

Comprehensive as it is, the Ofcom report poses as many questions as it answers. Although trends over the past 10 years can be a useful guide to the future, the arrival of disruptive devices such as the Apple iPad can distort otherwise predictable trends. Although the authors do not say as much, it is clear that the future for the desktop PC in the home – and probably also for the laptop computer – is limited.

A smartphone or tablet device can provide most of the everyday functionality that Ofcom respondents demand from their dedicated computer. What remains is to provide video entertainment content in the home, for which a large-screen connected-TV set is suited ideally.

Ofcom defines connected TV rather dismissively as “a television that is broadband-enabled to allow viewers to access internet content”. This definition understates the computing power that is built-in to the modern TV set, which is smarter than most home PCs available in the previous century.

We have come a long way since then of course; all that computers had to deal with 20 years ago was the World Wide Web. And in those pioneering days, it was all text.