U.S. Consumers Get More Value From Online Media Than Offline, BCG Study Finds

Sun Feb 10, 2013 7:00pm EST

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  BOSTON, MA, Feb 10 (Marketwire) -- 
U.S. consumers derive more value from media online -- net of the
associated costs -- than they receive from offline media, according to
new research by The Boston Consulting Group (BCG). 

    BCG calculates that the average U.S. connected consumer, or online user,
receives a "consumer surplus" from online media of approximately $970 per
year -- or about 2.5 percent of the average U.S. annual income --
compared with approximately $900 for offline media. Consumer surplus is
defined as the value consumers themselves place on a media-related
activity or product over and above what they pay for it. 

    The BCG study -- detailed in the report Follow the Surplus: How U.S.
Consumers Value Online Media -- examined the surplus consumers derive
from each of seven categories -- books, radio and music, U.S. newspapers
and magazines, TV and movies, video games, international newspapers and
magazines, and user-generated content (UGC) and social networks. 

    The highest consumer surplus ($311), accounting for about one-third of
the online total, comes from UGC and social networks accessed through
such platforms as Facebook and YouTube. Books fall at the opposite end of
the spectrum: they generate the greatest offline surplus, even taking
into account fast-selling e-books.

    "The fact that the consumer surplus is already higher for online media is
somewhat extraordinary, given that online revenues represent less than 15
percent of the total media industry pie," said John Rose, a BCG senior
partner and coauthor of the report. "This surplus will only continue to
grow, driven by consumers' appreciation for an expanding array of
high-quality content and the proliferation of devices."

    The BCG study found that device ownership is increasing, with
proliferation driven first by the desire for mobile access, then by
fragmentation of use -- that is, consumers using different devices for
different purposes in different situations throughout the day. 

    The average consumer today owns 2.9 devices -- almost double the figure
from three years ago -- and expects to own 4.1 devices in three years'
time. The number of hours spent consuming online media jumps 50 percent
when people start using a second connected device, which is often their
first mobile device. It rises again for consumers owning five or more
devices, by as much as 25 percent. Owners of multiple devices report big
increases in value from online media consumption.

    "Shrewd media companies that build effective digital capabilities will
enjoy opportunities to extract some of this growing consumer surplus for
themselves," said Neal Zuckerman, a BCG partner and coauthor of the
report. "They will need to develop products that work across the growing
range of devices and capitalize on both new and existing models of
commercialization, including advertising, new products and services, an
increasing ability to charge for online content, and the still-evolving
ecosystem for monetizing the massive volumes of consumer data that the
Internet serves up."

    Among the other findings:

--  More than two-thirds (68 percent) of consumers say they have more
    access to higher-quality online content today than three years ago.
--  Nearly two-thirds (62 percent) cite the unique nature of such content
    as a major reason to go online.
--  The same percentage believes that the Internet promotes U.S. culture
--  More than three-quarters (77 percent) feel that it is their own
    responsibility to filter for accurate online content, and they believe
    they have the capability to do so effectively.
--  By a margin of some five to one, U.S. consumers are more excited about
    the Internet's potential rewards than they are worried about the
    potential risks.


The patterns of media consumption in the U.S. are remarkably
consistent -- especially for online media -- across age, gender, and
region. But what people are doing while they are online can vary. For
example, men and women consume the same amount of online media -- 12
hours a week (men consume slightly more offline media) -- but men listen
to significantly more music online while women enjoy more online
interaction through UGC and games. 

    Follow the Surplus, released today, builds on BCG's prior analyses of the
Internet's economic and business impact on countries and companies. It's
also part of the firm's 50th anniversary "Game Changing Program," which
throughout the year will pull together the firm's best ideas, insights
and practical recommendations for navigating the seismic shifts in
today's global economy. 

    A copy of the report can be downloaded at www.bcgperspectives.com.

    To arrange an interview with one of the authors, please contact Alexandra
Corriveau at +1 212 446 3261 or corriveau.alexandra@bcg.com 

    About bcgperspectives.com

    Bcgperspectives.com features the latest thinking from BCG experts as well
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    About The Boston Consulting Group

    The Boston Consulting Group (BCG) is a global management consulting firm
and the world's leading advisor on business strategy. We partner with
clients from the private, public, and not-for-profit sectors in all
regions to identify their highest-value opportunities, address their most
critical challenges, and transform their enterprises. Our customized
approach combines deep insight into the dynamics of companies and markets
with close collaboration at all levels of the client organization. This
ensures that our clients achieve sustainable competitive advantage, build
more capable organizations, and secure lasting results. Founded in 1963,
BCG is a private company with 78 offices in 43 countries. For more
information, please visit bcg.com.


The Boston Consulting Group
Alexandra Corriveau
Media Relations Manager, The Americas

Tel +1 212 446 3261
Fax +1 212 446 2801

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