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13 January 2005

Online music: behaviours and attitudes - US

In two reports US slow to purchase music online and Digital music age gap, eMarketer proposes a round-up of research on online music: practices, interest, adoption, market share, market size.

There are very big age differences in digital music sharing and reproduction
18-24 years old (41%) burn CDs, vs. 14% of those over 25
In the same age group, 31% use file sharing programs, vs. 4% of those over 25 (data from JupiterResearch, December 2004)

There are also large differences in the interest for subscription services
Interest is highest among music aficionados (37%) (defined as those who have spent more than 33€ on music in the past three months and engage in digital music activities on a regular basis) and among 18-24 years old (31%). Less so among teens aged 13 to 17 (19%), and adults (17%). Greater disposition to use P2P services, lower credit card penetration and income may explain teens' limited interest. Concerning adults, the majority (51%) think tangible records are more valuable than digital; and only some (16%) express interest for downloading single tracks.

Forrester Research (July, 2004) finds that there are 7,6 M US households equipped with MP3 players.

An InsightExpress survey (October 2004) estimates that 12% of US adults have bought music from an online music store. Respondents who haven't preferred to buy music at traditional music stores; do not own a digital music player; find that music downloading lacks appeal. What is important for customers is that online stores offer:

  • low prices
  • rich music selection
  • availability of music previews
  • compatible files

Market size and market share
Estimates for US online music revenues in 2004 vary widely, between 104 and 384 M$. Apple iTunes, since its opening in April 2003, is by far the market leader, with 70% market share of all paid music downloads (NPD Group, October 2004), followed by Napster (11%), RealNetworks, MusicMatch and Wal-Mart with 6%.

11 January 2005

A perceived benefit-based segmentation of mobile phone users

IDC's What makes mobile users tick? The underlying factors of mobile phone usage and purchase criteria report proposes a segmentation of mobile phone users based on how the perceived benefit from using mobile phones are rated.

  • Productivity and convenience are more frequently rated highest
  • Safety and security tend to correspond to price-conscious users who favour simple, easy-to-use phones
  • Style and status are considered more important by men than by women

Thus, while some people relish the increased productivity and convenience of having a mobile phone, others are merely satisfied with their heightened sense of safety and security when carrying these devices. Fortunately for mobile phone vendors and wireless service providers offering emerging value-added features sets and services, a full constituency of mobile users thrive on the style and status associated with owning the latest full-featured phones.

Will camera phones replace cameras?

Some quantitative indications on the camera phone market and camera phone use come from InfoTrends/CAP Ventures's report Mobile Imaging: Technology, Trends, Consumer Behaviour, and Business Strategies (via Reuters)

In 2004, camera phone shipments are estimated at 178 M on a total of 628 M handsets shipped (corresponding to 28%). The report projects a formidable growth: by 2009 89% of all phones (968 M) will be camera phones (860 M). And makes the substitution argument that camera phones will take the place of low- and mid-range cameras

for many consumers the camera phone will become their everyday camera

the total number of images captured on camera phones will reach 227 billion by 2009, exceeding the number of photos taken on digital still cameras and film cameras combined!

The argument seems to be grounded on one main dimension, technological innovation

  • primary drivers behind this explosion are improvements in imaging functions
  • higher-speed wireless bandwidth
  • easier to use handsets, services and peripherals

some economics

  • rapid declines in prices for this functionality

some psychology

  • intention to purchase camera phones expressed by 50% of respondent

A potential precursor of the predicted trend is found in Japan where camera phones are the primary cameras for 12,5% of Japanese respondents. However, research on use (based on interviews with 6,360 consumers in North America, Western Europe, Japan, China) seems to show something different. People in Japan are taking much less pictures with their camera phones and are printing them much less often.

The report finds that people in North America and China take an average of 20 camera phone pictures per month, against 5 in Japan. Also in Japan the percentage of camera photos that are printed is, at 1-2%, much lower than in the other countries where consumers are printing between 8 and 10%.

10 January 2005

What you see is what you ask - more on Internet usage in the USA

Year 2000
Harris Interactive  started polling online US adults on their online activities by means of a nationwide telephone survey:

Thinking about what you do online, how often do you use the Internet, the World Wide Web or an online service to......: very often, often, sometimes, rarely, never

The results of the end 2004 survey (between the 9th and 14th of November)  are very much consistent with what is known.

The Internet's single most used function is sending and receiving email (66%, with 30% very often and 36% often).

Among browsing activities, the most frequently cited is to do research for work or school (46%, 18% very often, 28% often), followed by to check on news (43%, 16% very often, 27% often), to get info about a hobby or special interest (40%, 15% very often, 25% often), to gather info about products and services (38%, 14% very often, 24% often).

Two activities have grown significantly since the previous year:

  • to make travel plans or reservations (+ 11%, to 26%)
  • to look for information about health or diseases (+ 6%, to 21%)

All the other activities remain stable. 

Does that mean that online behaviour  has matured and become routine? Or is it that these surveys are missing important shifts and changes in the way the Internet is used?

It is unfortunate that the categories of online activity Harris Interactive used in 2000 have not evolved much over the years to include web publishing, participation in communities, collaborative projects and rating systems. The Internet is not like traditional top-down mass media. And its users shouldn't be reduced to consumers who access, search and find information; download games or software; go through payments and other administrative procedures. The issue is that not only Harris Interactive, but the large majority of surveys of online activities, use these same "passive" categories.

3G/UMTS adoption - Worldwide

The UMTS Forum announces (via the 3G Newsletter) 16 M 3G/UMTS subscribers at the end of 2004 worldwide, with a 6 M new subscribers in the last quarter of the year. Europe accounts for about one third of the global subscribers base.

Considering recent estimations of the total number of mobile subscribers to 1.5 billion, 3G/UMTS subscribers represent a small fraction, of about 1%.

Kodak come-back: a case of user centered strategy

In Kodak updates its brownie to compete in a digital age ($) (NYT, 27th December 2004), Saul Hansell tells the story of how Kodak, who was the first to manufacture a digital camera - Apple's QuickTake 100 in 1994 - grew from a market share of 5% of the US digital camera market in 2000, to a market share of 19% in 2004, closely behind market leader Sony.

Part of the reorganisation of the digital camera product line involved strategic decisions informed by in-depth customer behaviour research.

Kodak called in anthropologists and other social scientists, who observed camera users in an effort to learn how taking and printing pictures fit into their daily lives. They also followed prospective camera buyers into stores to understand how they chose certain models from the crowded shelves.

The company's big decision was to focus on low-priced, easy-to-use cameras that would appeal to women, who take the majority of snapshots, rather than Sony's forte - shiny toys for gadget-loving men.

Kodak's engineers developed a system meant to streamline the process of moving pictures off the camera, onto a computer and then either a printer, Kodak's Ofoto online printing service or e-mail. This involved new cameras, new software and an optional dock that cradled the camera, allowing it to recharge its batteries and transfer pictures to the computer at the same time.

Teens JUST want a mobile phone as a gift

Starting in 2001, Cingular carries out, through International Communications Research, a Christmas survey among 13-17 year-old US teens to know for wishing a mobile phone as a Christmas gift.

The December 2004 survey suggests that the mobile phone is an essential, practical item:

Convenience (20%, +18% in a year)
Just want one (18%, +10% in a year)

with a broad communication function, and few specific ones:

Keep in touch with friends and family (32%, -14% in a year, but stable with respect to 2001 33%)
Just in case of emergencies (10%, -13% in a year, but stable with respect to 2001 13%)
Safety reasons (2%, - 5% in a year, but stable with respec to 2001 3%)

and little show off effect:
It's cool (7% in 2003, 13% in 2001)

No mention of converging digital functionalities such as music and photography, even though camera phones appear to be number two on the list of top gifts after MP3 players. But this may be because of the questionnaire design.

Internet use and sociability - USA

December 2004
The Stanford Center for the Quantitative Study of Society published the report Ten years after the birth of the Internet, how do Americans use the Internet in their daily lives? One particular finding has attracted commentators' attention: increasing online time reduces face-to-face time with family.

we were very interested to discover that the increase in Internet use over the last 10 years has eaten into television viewing less than expected. Time online seems to come more out of family discretionary time (Norman Nie, director of SIQQS)

This finding is taken to support the hypothesis that "increased Internet use reduces the time spent socializing and other activities". This conclusion however runs against another significant finding, that is, that communication is the online activity people engage in most. Using the Internet seems to be reducing one form of communication, that is face-to-face, while augmenting other forms, i.e. Internet-mediated communications. This creates opportunities to extend face-to-face communication, as IM does both in the workplace and among teenagers; to expand one's social networks (20% of the Internet users communicate with someone they have never met in person) and to bring new meanings to face-to-face encounters. Even if Internet use reducesd face-to-face sociability, it wouldn't necessarily have a negative impact on overall socialbility.

June 2004
A representative sample of 4,839 18 to 64 year-old Americans was contacted and asked whether they had used the Internet the previous day. The 1,518 who had done so described the activities they had carried out at six, randomly selected, hours of that day, following the Time Diary methodology developed at SIQSS.

How long are Internet users online?
They spend a significant part of the day online, on average nearly 3 hours per day, of which one hour is spent at work.   

In what activities do Internet users engage?
Time online is mainly for communication: email, IM and chat take up 57% of the time spent online. Of this time, work-related communication accounts for a third; friends for nearly a third; family for about a sixth. Browsing time is shared between playing games (20.3%), surfing the web (15.4%), shopping and selling (10%), news (7.6%), work (6.9%) and planning travel (5.0%). Other activities account for less than 5.0% of the time spent browsing.

Does Internet use reduce TV watching?
On average, all respondents watched TV for 2 hours per day, whereas Internet users did so for one hour and 45 minutes. TV watching goes down and Internet use up among people with a Bachelor degree or higher, people between age 18 and 44,  and among students.      


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