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

BOSTON, MA -- (Marketwire) -- 02/10/13 -- 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 abroad.
  • 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 as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back almost 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed via PC, mobile, iPad, Facebook, Twitter, and LinkedIn.

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
corriveau.alexandra@bcg.com

About Marketwired .
Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

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