From: Nua Internet Surveys [mailto:[log in to unmask]]
Sent: Monday, June 19, 2000 8:44 PM
To: Recipients of surveys mailing list
Subject: Nua Internet Surveys: June 19th, 2000
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NUA INTERNET SURVEYS - The Number One Resource for Statistics
Free Weekly Email For Latest Information & Trends on the Internet.
Email: mailto:[log in to unmask] Web: http://www.nua.ie/surveys/
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June 19th 2000 Published By: Nua Limited Volume 5 No. 23
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CONTENT
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EDITORIAL:
"The debate on whether shared music libraries on
the Internet, such as Napster Gnutella, iMesh and
Scour Exchange are affecting the bottom line of
record companies and their recording artists has
produced some pretty dichotomous survey interpretations."
Sorcha Ni hEilidhe in "Napster Static".
ACCESS DEVICES
:Use of Web Appliances to Soar
CUSTOMER SERVICE
:SMEs Unhappy With Online Customer Service
E-COMMERCE
:Speed and Simplicity Key to Boosting Sales
:Dearth of Local eCommerce Sites in Canada
:Offline Music Sales Boosted by Napster
FINANCIAL SERVICES
:Internet Leading Financial News Source
:UK Online Insurance Worth USD3.1 Billion
GENERAL DEMOGRAPHICS
:Nearly 20 Million Online in Japan
:Digital Divide Evident in Australia
:Income & Age Are Largest Gap in Digital Divide
INFRASTRUCTURES
:European ISPs Gear Up for Broadband
IT/COMPUTER INDUSTRY
:Venture Capitalists in Taiwan Turn to the Net
:Latin America Poised for IT Skills Shortage
MARKETING/BRANDS
:Major Net Players Cut Marketing Spending
PUBLISHING/MEDIA
:Napster Now Has Over 10 Million Users
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EDITORIAL: Napster Static -
<http://www.nua.ie/surveys/analysis/weekly_editorial.html>
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The debate on whether shared music libraries on the Internet, such as
Napster Gnutella, iMesh and Scour Exchange are affecting the bottom
line of record companies and their recording artists has produced some
pretty dichotomous survey interpretations.
Depending on whether you're a cyber-libertarian or not, you will either
conclude that such applications are annihilating the recording industry
by encouraging virtual looting, or they are fuelling the growth of the
music industry at large and stimulating the sale of offline CD's.
Neither conclusion reflects the complexity of the situation.
A study commissioned by the RIAA, the Recording Industry Association of
America, and carried out by The Field Research Company last week found
that music-sharing services such as Napster cause "serious and
irreparable harm" to the recording industry. The RIAA then used the
findings to convince a federal court to pass a preliminary injunction
which could shut down Napster while litigation continues.
Curiously, the survey's findings are inconsistent with its verdict:
Some 38 percent of those interviewed said that Napster had
absolutely no impact on their consumption of music and 22 percent said
that rather than encourage them to not pay for music, it had helped
them to make a decision on what to buy in retail stores.
The study, which, presumably, aimed to decipher the real and resounding
affects of file-sharing services on the music industry, used some
questionable methodology: the panellists were all college students and
of the total 3218 interviewed, only 500 had actually used Napster to
download music.
Another study commissioned by Reciprocal, a digital rights management
firm, corroborates the RIAA's findings. The market research firm, VNU
Entertainment Marketing Solutions, found that sales of CD's were down 4
percent for the last two years in stores adjacent to college campuses.
This was deemed to be damning evidence that Napster hurt music sales
and would have to go. Curiously, the study did not mention that the
alleged dip in CD sales came a whole five months before the launch of
either Napster or Gnutella. Nor did it occur to them, evidently, that
the majority of students with high bandwidth Internet connection would
be more likely opt to buy their music from online stores where prices
are lower than at physical retail stores.
First five/six paragraphs of editorial
For the full story, go to:
http://www.nua.ie/surveys/analysis/weekly_editorial.html
For archives of editorials, go to:
http://www.nua.ie/surveys/analysis/weekly_editorial/archives/index.html
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US DEPT. OF COMMERCE QUOTES NUA INTERNET SURVEYS
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For the third consecutive year, the US Department of Commerce has used
statistics collated by Nua Internet Surveys in their report, The
Digital Economy, published yesterday.
The figures were taken from Nua's How Many Online? section which has
been recording the global Internet demographic since 1995.
http://www.esa.doc.gov/de2000.pdf
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HOW MANY ONLINE? <http://www.nua.ie/surveys/how_many_online/index.html>
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AFRICA - 2.58 million
ASIA/PACIFIC - 68.9 million
EUROPE - 83.35 million
MIDDLE EAST - 1.9 million
CANADA & USA - 136.86 million
SOUTH AMERICA - 10.74 million
WORLD - 304.36 million.
For a full global breakdown see:
<http://www.nua.ie/surveys/how_many_online/index.html>
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TrendMuncher - Creating Knowledge From Data
<http://www.nua.ie/surveys/trendmuncher/index.html>
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"Prior to the invention of the phonograph,there wasno recosrding
industry. Musicians subsisted on revenue from live performances. Post
internet and Napster, the recording industry is toast"
- Kevin Horgan in TrendMuncher, a weekly email discussion list focused
on deciphering the real implications behind Internet research studies.
To read the latest issue of TrendMuncher, go to:
<http://www.nua.ie/surveys/trendmuncher/current.html>
To join the discussion list, send an email to
<mailto:[log in to unmask]>
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DIGESTS START HERE
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ACCESS DEVICES
Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=26>
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eTForecasts: Use of Web Appliances to Soar
Although Web appliances are currently only used by 2 percent of
Internet users in the US and 6 percent of global users, their
popularity is set to skyrocket over the next 5 years.
In a new report, eTForecasts predicts that by 2005, over 71 percent of
all Internet users and 55 percent of US users will carry out some of
their online activities using a web appliance. Increased availability
of Internet-enabled mobile phones will drive this strong growth in the
appliance market.
There are currently 21.5 million Internet appliances in use globally,
3.2 million of which are in the US and 3 million of which are in
Western Europe. The projected figures for 2005 are 596 million
globally: 115.4 million for the US and 126.4 million for Western
Europe.
The death knell for the PC should not be sounded yet, however,
according of the author of the report, Dr Egil Juliussen. He says the
spread of alternative access devices "does not mean the end of PCs as
Internet access devices, but an increasing share of Internet users will
augment their online life with web appliances".
<http://www.etforecasts.com/pr/pr600.htm>
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CUSTOMER SERVICE
Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=47>
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Cyber Dialogue: SMEs Unhappy With Online Customer Service
Although small businesses in the US are spending more online, they are
increasingly dissatisfied with customer service offerings from B2B
vendors. The number of businesses that believe online support saves
them money has dropped from 52 percent last year to 36 percent this
year.
According to a new study, just under half of small businesses are
satisfied with the relevance of online customer service and 61 percent
with the usefulness of these services. Last year's figures were 60
percent and 73 percent respectively.
Despite this, the amount of spending on B2B has increased. Small
businesses spent a total of USD45.2 billion in the 12 months ending
March 2000, a 138 percent increase on the previous year. About 3.4
million non-residential small businesses now have Internet access,
along with 7.4 million small business branch offices.
In its report, "U.S. Small Business Internet Survey", Cyber Dialogue
warns that if B2B vendors do not address the current problems, less
satisfied small businesses will take their business elsewhere.
Implementing online voice support and providing online meetings or chat
rooms is recommended as these find particular favour with small
businesses.
Business and professional service providers, and retailers account for
60 percent of small business spending online. Over half of small
businesses' online budget is devoted to office supplies and computer
products.
Cyber Dialogue interviewed more than 1000 small business decision
makers in the first 3 months of 2000. A small business is defined as a
company with less than 100 employees.
<http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905355845&rel=true>
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E-COMMERCE
Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=14>
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Creative Good: Speed and Simplicity Key to Boosting Sales
Online retailers should concentrate on making their sites quick and
easy to use if they want to boost revenues, according to a new report
from Creative Good.
The online shopping-cart abandonment rate is the same as it was two
years ago but Creative Good says that consumers are less likely to
leave sites that are well designed and easy to navigate.
B2C ecommerce revenue could grow by an extra USD20 billion in 2000, if
retail sites had improved usability. Visitor to buyer conversion rates
could also be raised from the current average of 1.8 percent to a more
satisfactory 2.5 percent.
The report also criticises online retailers for having poor page
design, site search facilities and a lengthy and often confusing
checkout process. Other faults included poor or non-existent product
labelling, too much information on individual pages and forcing
consumers to fill out long questionnaires before allowing them to
browse through the site.
As the Internet population comes to mirror the general population more
closely, retail sites must cater to all potential customers, most of
whom are not from technical backgrounds.
<http://www.creativegood.com>
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Boston Consulting Group: Dearth of Local eCommerce Sites in Canada
A new study by the Boston Consulting Group finds that Canadian
retailers are reluctant to take their operations online as they see
online retail economics as unproven.
Retailers' fears of high initial costs and the potential
cannabalisation of their existing offline customer base, along with the
problems in achieving economies of scale in a country with low
population density have hindered the development of domestic ecommerce
in Canada.
The study, "Winning the Online Consumer in Canada" aimed to compare
Canadian shopping habits with US habits and confirmed findings from an
earlier Deloitte & Touche study, which showed that Canadian consumers
want to shop at domestic sites with familiar brands, low prices and
speedy delivery.
According to BCG's Research Director, James Vogtle, "Canadians are
primed and ready to purchase from Canadian sites but, with our
supply-side deficit, they often end up purchasing from foreign sites,
where the experience ends up being frustrating, costly and
inconvenient,".
As a result, Canadians are more likely not to complete an online
purchase than their US counterparts are. They also purchase online less
frequently and spend less than online consumers in the US and are more
likely to have privacy and security worries. Again, these findings are
consistent with the Deloitte and Touche study of December 1999.
The BCG emphasises that Canadian retailers must provide customised
content and excellent order fulfilment capabilities to their domestic
audience if they want to gain online customers. They should also look
at engaging in online retail partnerships so they can leverage
economies of scale and provide wider choice for consumers.
The BCG interviewed 12,000 consumers in North America, including over
600 in Canada, conducted by BCG in the last three months of 1999.
<http://www.bcg.com/media_center/media_press_release_subpage16.asp>
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Yankelovich Partners Inc: Offline Music Sales Boosted by Napster
Almost 60 percent of those that have downloaded songs from the Internet
say they have bought recordings from offline retail outlets after first
hearing songs online, according to a new survey sponsored by the
digital music distribution industry.
The survey was carried out by Yankelovich Partners and the results show
that over 60 percent of music fans would spend more on music if they
could buy a song as soon as they hear it and more than 4 in 5 would
like to purchase songs individually. Almost 4 in 5 would purchase more
music if they could find out the artist and title of a song
immediately.
Just under half, 48 percent, said they use the Internet to access music
that is not broadcast on local radio stations. The findings of the
survey are consistent with those of a study carried out by Wired
Magazine last month.
Yankelovich Partners surveyed nearly 17,000 music fans under the age of
40 and found that they listen to music for 10 hours per week on average
and spent over USD25 on music in the six months prior to the survey.
The results of this survey appear to negate those of a recent study
from Reciprocal, which indicated that Napster downloads negatively
affect music sales.
The survey is released in the midst of a heated debate on the future
of Napster and on the wider issue of copyright and intellectual
property rights in the digital age. The Recording Industry Association
of America filed a preliminary injunction against Napster this week to
try and stop the free music distribution service operating.
<http://www.y-interactive.com/home.asp>
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FINANCIAL SERVICES
Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=4>
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Pew Research Center: Internet Leading Financial News Source
Despite current upheavals in the online media sector, the outlook is
good for Internet news services, according to a new study from the Pew
Research Center.
One in three members of the US public gets news from the Internet at
least once a week, up from one in five in 1998. Furthermore, three
times as many people, 15 percent, read online news daily than did in
1998.
Online financial news services are now the leading news source for
active financial investors looking for share prices and investment
advice. Just under 60 percent of active traders have a personalised web
page with share prices and 15 percent say they receive financial
updates on a wireless device.
As the Internet news audience grows, it is replacing television rather
than newspapers. The Pew study finds that newspaper readership is
holding steady but viewing figures for television news are dropping
steadily.
Only 45 percent of respondents said they enjoy keeping up with the
news, down eight percentage points since 1994. Fewer than one in three
young adults like stay to abreast of the news.
Information overload is not a problem for most people. Almost two in
three respondents said they liked the way the Internet made information
available to them. Only 30 percent said they feel "overloaded" by
information.
<http://www.people-press.org/media00rpt.htm>
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Forrester Research: UK Online Insurance Worth USD3.1 Billion
The online insurance market in the UK will be worth USD3.1 billion by
2005 when 20 percent of general insurance will be sold to personal
customers online. Virtual insurance "supermarkets" are already emerging
in response to consumer demand for comparison-shopping in mortgages,
insurance and funds. These supermarkets will dominate the market by
2005.
According to Forrester, insurance supermarkets will help consumers get
the best deal by pooling quotations from a large number of insurers and
competing with each other on commission levels.
Motor insurance is expected to be the fastest growing sector online as
customers begin to move their search for the best deal to the Internet.
Meanwhile, the moving of life insurance sales online will be dogged by
regulation and product complexity.
Forrester identified two distinct types of insurance supermarket,
independent and white-label supermarkets. The former will use TV
advertising and branded partnerships to build new brands on the Web
while the later will concentrate on strategic alliances with existing
industry leaders and leave branding up to these partners.
For the report, "UK Insurance Supermarkets Arrive", Forrester
interviewed 25 companies in the UK life-assurance markets and
general-insurance markets and spoke to members of the Association of
British Insurers.
<http://www.forrester.com>
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GENERAL DEMOGRAPHICS
Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=18>
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Las Vegas Sun: Nearly 20 Million Online in Japan
There are now 19.4 million Japanese using the Internet, according to
new report from Access Media International. This figure represents a
128.8 percent increase on last year's figure. There are now over 20
percent of Japanese homes are online.
14 percent of the population, one in every six, access the Internet
using the i-mode service offered by DoCoMo, the mobile arm of the local
telecom giant NTT. Mobile phone users are now the fastest growing
segment of the online population in Japan.
The survey polled 108,000 households and found that over 50 percent had
a mobile phone user, representing nearly 50 million mobile phone
owners.
In response to the growing demand for i-mode services, NTT has had to
temporarily reduce the number of phones shipped to ease pressure on
bandwidth.
Access Media International, a research company, based in Tokyo, has
been conducting surveys since 1996.
<http://www.lasvegassun.com/sunbin/stories/tech/2000/jun/12/061200928.h
tml>
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Australian Bureau of Statistics: Digital Divide Evident in Australia
According to the latest quarterly research from the Australian Bureau
of Statistics (ABS), older people, women, the unemployed and those in
low-income groups are considerably less likely to have Internet access
in Australia. While Internet access is becoming more widespread - 6
million people surfed in 1999 - the digital divide persists.
Only 13 percent of over 55s had gone online in the 12 month period
prior to the survey while 77 percent of 18-24 year olds had gone
online. Just under a quarter of the unemployed and 37 percent of
low-income individuals had gone online while over half (56 percent) of
those who work and 66 percent of high earners had gone online.
The ABS calculate that 3.5 million households, or half of all
households in Australia, had PCs and 1.9 million, or 28 percent had
Internet access in February 2000. This represents an increases of
300,000 households with PCs and 600,000 with Internet access since
February 1999.
More than 5 percent of Australian adults or 740,000 people bought goods
or services online between February 1999 and February 2000, up from
480,000 the year earlier. Books, magazines and computer software remain
the most popular categories.
Again, it was high-earning young men who were most likely to have
purchased from ecommerce sites. Those with salaries of USD40,000 or
more were four times more likely to have purchased online than those
with lower incomes. 46 percent of male adults have Internet access
while 41 percent of women have.
<http://www.abs.gov.au/Ausstats/ABS%40.nsf/dddcf05472f88677ca2568b5007b
8615/f28f14aa10c60cfbca2568fd000503a1!OpenDocument>
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Jupiter Communications: Income & Age Are Largest Gap in Digital Divide
A report from Jupiter finds that the digital divide reflects
differences in household income and age, rather than differences in
ethnic origin. Despite this, 60 percent more white households are
online than African-American households.
Jupiter forecasts that 4.6 million African-American households will be
online by the end of 2000, compared with 3.8 million Hispanic-American
households, and 2.2 million Asian American households. Each of these
demographics will grow at double-digit rates annually for the next five
years.
In 1999 Internet adoption rates in African-American households and
Hispanic-American households exceeded critical mass and penetration
rates were 30 percent and 33 percent respectively.
While there are significant gaps between ethnic groups, the largest
adoption gap exists between households with low incomes and households
with high incomes.
Almost one fifth, 19 percent, of the total US population are in
households with incomes of less than USD15,000 per annum, but less than
half of these will be online by 2005, according to the report,
"Assessing the Digital Divide(s)".
15 million households with incomes of USD75,000 upward per annum will
be online by the end of 2000 compared to 3 million households with
incomes of USD15,000 and less. By 2005, there will be 20 million
high-income households online compared to just 9 million low-income
households.
Kids' penetration (2-12) will increase from 32 percent in 2000 to 62
percent by 2005 and senior penetration will increase from 16 percent
currently to 48 percent by 2005. However adults, ages 50 and older,
will account for 23 million users by the end of 2000, comprising a
market larger than that of any of the youth segments: kids (14
million), teens (13 million), or college students (12 million).
<http://www.jup.com/company/pressrelease.jsp?doc=pr000615>
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INFRASTRUCTURES
Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=20>
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IDC Research: European ISPs Gear Up for Broadband
A new report from IDC shows that the Internet access market in Western
Europe will continue to grow, driven by the proliferation of
subscription-free and unmetered access services and the increasing
availability of broadband services.
According to the report, "European Internet Access Market 1999-2004",
the free ISP model which swept across Europe last year is so pervasive
it needs to be supplemented with unmetered access to drive growth. This
is already being offered in the UK.
Demand for broadband access services such as DSL, cable modem and fixed
wireless access grew by 300 percent this year and by 2004 one in three
connections will be broadband. Revenue from broadband will account for
half of all access revenues.
Total Western European spending on Internet access is forecast to
increase at a 28 percent compound annual growth rate from 1999 to 2004,
but this will vary widely across the region. The increase in spending
will be reflecting in a number of high-profile flotations this year.
There will be further local loop unbundling in Europe and this will
lead to increased competition in the regional Internet access market.
This competition, in tandem with the increased availability of
broadband services, will also drive down prices of traditional leased
line services.
<http://www.idc.com/emea/press/PR/ECM060800PR.stm>
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IT/COMPUTER INDUSTRY
Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=12>
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News.Com: Venture Capitalists in Taiwan Turn to the Net
Despite heavy bureaucratic and regulatory supervision, Taiwan's
embryonic Internet and software industries are slowly taking off,
according to a News.com report.
Taiwan has an established computer industry but it has revolved around
hardware manufacturing, a sector that has seen steadily declining
profit margins in recent years.
In the past, regulators did not trust software and Internet companies
as these companies depended on patents, rather than owning big
factories.
This has now changed and interest in Internet companies and software
companies has rocketed since they were allowed go public in March 1999.
The Taiwanese are known for their love of the stock market and, on an
intensive day, the value traded can reach USD7 billion, making Taiwan
the third largest stock exchange in the world.
Online share trading has not yet taken off in Taiwan, however, and only
6 percent of shares are traded electronically. Three quarters of those
trades are made through automated telephone services.
The growing profile of Taiwanese software and Internet companies has
also attracted the attention of venture capitalists and industry
insiders estimate that there are 200 incubators on the island of 23
million people.
<http://cnet.news.com/news/0-1007-200-2064244.html>
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IDC Research: Latin America Poised for IT Skills Shortage
Latin American companies were warned this week to prepare for future IT
skills shortages as the region moves from a manufacturing-based economy
towards a technology-dependent, service-based economy.
A new IDC report, "IT Labor and Latin America Enterprises: A Crisis or
Under Control?", finds that most businesses in Argentina, Brazil and
Mexico remain unconcerned about potential difficulties in recruiting IT
staff.
Although smaller companies would be most affected by future IT labour
shortages, they seem to be the least concerned. Larger firms are more
worried about this problem and many are already feeling the impact of
IT staff shortages.
IDC maintains, however, that the supply of skilled IT staff could
easily outstrip demand as more firms take their business online and
come to depend on application software, as has happened in more
developed areas such as North America, Western Europe and Australia.
"The bottom line: A significant shortage in IT labor can adversely
impact an organization's technology adoption and therefore make it
noncompetitive in an increasingly global and more efficient and
information-driven economy", said the report.
Organisations wishing to retain IT staff will have to offer those
employees lucrative pay deals and bonuses.
<http://www.idc.com/LA/press/PR/LASW061300PR.stm>
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MARKETING/BRANDS
Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=45>
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The Industry Standard: Major Net Players Cut Marketing Spending
Although major Internet companies are cutting their spending on sales
and marketing, these costs still swallow the majority of their budgets,
according to The Industry Standard.
The 20 firms studied spent an average of 61 percent of their revenues
on sales and marketing in Q1 2000, down from an average of 83 percent
in the same period last year and a staggering 149 percent the year
before.
Only 7 of the firms examined by the Industry Standard did not lower
their SMR ratio (sales and marketing expenditure as a percentage of
revenue) last year.
Salon.com and TheStreet.com, both of which have had high-profile
difficulties recently, had the biggest increases in sales and marketing
expenditure between Q1 1999 and Q1 2000, and their SMR ratios are high,
at 165 percent and 143 percent respectively.
Only Amazon, AOL, Priceline.com and Wit Capital kept spending on sales
and marketing at a manageable level, under 25 percent of revenues.
<http://www.thestandard.com/article/display/0%2C1151%2C15864%2C00.html>
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PUBLISHING/MEDIA
Archives: <http://www.nua.ie/surveys/index.cgi?f=FS&cat_id=46>
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Pew Internet & American Life: Napster Now Has Over 10 Million Users
38 percent of Internet users in the US -35 million people, have
downloaded music from the Internet or listened to streamed audio files
via the Internet. Only 2 percent of those have paid for the privilege,
according to a new study by Pew Internet & American Life.
The study aimed to decipher the consumption patterns of music online
and interviewed 2,503 people over the period of a month. It is the
first to detail the extent of the practice of downloading free music
from the Internet.
13 million Americans, 14 percent of US online population, found their
music in shareware libraries such as Napster or Gnutella. The study
referred to these as "freeloaders", people who download music for free.
These users tend to be older; 49 percent were aged between 18 and 29
and 51 percent were aged 30 and over. They tend to be male, 64 percent,
and they tend to be experienced Internet users.
Another 15 million Americans listened to music from Internet radio or
streamed files. These users tended to be female, 52 percent. 1 percent
of users paid to download music they already owned and 2 percent
downloaded music they already owned but did pay for it.
The study looked at Napster during the month of April and found that up
to 5000 users are sharing files at any given moment. Between 500,000
and 600,000 songs are available to those users, therefore the average
Napster user has 100 songs to share.
Napster recently announced that it has over 10 million people using its
service however, an independent group has not audited this figure.
Despite this, Nielsen/NetRatings reported a 19 percent increase in
traffic to Napster from the first week in April to the second. It took
AOL six years to achieve the equivalent.
<http://www.pewinternet.org/reports/toc.asp?Report=16>
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NUA LIMITED
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obtained from sources Nua Ltd. deems reliable.
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