Communication And Entertainment Proliferate Over The Internet

Commerce Increases, While Content And Communication Take An Even Broader Stage On The Internet, Reveals Ipsos-Insight's The Face Of The Web Study

New York, NY - Internet users are highly involved in accessing the Internet for entertainment and communication, with a marked growth in image sharing and banking, according to The Face of the Web, the annual study of Internet trends by Ipsos-Insight, the global survey-based marketing research firm, which has been tracking Internet developments around the world since 1999. The latest findings -- based on interviews in thirteen key global markets with more than 7,100 adults, including 3,250 active Internet users -- show that, with the growing Internet traffic and bandwidth, mainstream entertainment and communication are poised to flourish substantially in the next few years.

"Not long ago, the Internet was heralded as the Information Superhighway. That phrase is shaping itself today in more ways than imagined before," said Brian Cruikshank, Senior VP of Ipsos-Insight and co- author of the study. "The Internet has become a medium for more than just surfing for information; rather it has become a conduit for accessing, sending, and receiving content, both audio and video, that is increasingly replacing traditional media and the communications infrastructure."

Last year, sending or receiving digital pictures or videos was by far the most popular online activity, with more than two out of three Internet users in Leading Edge and Advanced economies sharing digital media, while close to half sharing images in Nascent and Emergent markets. Furthermore, more than one in ten users have watched TV shows or video streams on the Internet, a figure that is expected to grow substantially within the next couple of years.

Music Downloading and Copying Change their Tune, While Online Gaming Slows in the U.S.

While streaming digital video and TV shows is still in its inception, accessing music continues to be popular, with more than half of the people who accessed the Internet listening to music online. However, music downloading slowed or stalled in most markets, with the exception of South Korea and Urban China where it increased. The decline in downloading population is primarily driven by a 31% drop in U.S. where downloaders may be sensitive to the legal scrutiny surrounding the music copyright issues.

Overall, globally, more users listened to online music (50%) than downloaded a music file (37%), shared a music file (27%), or burned a music file (26%). This ratio is particularly pronounced in the U.S., the U.K., Urban Mexico and Japan. Cruikshank commented, "As a business rule, sampling of a product or service often leads consumers to later buy. Given that in the future music will likely be delivered digitally via an online source, music suppliers could fare well by offering this promotional-driven alternative as way to lure music enthusiasts to purchase."

Online gaming also increased (8%), but South Korea, Japan, and Germany drove most of it. The U.S. continues to have the largest population of online gamers, representing an estimated 82 million gaming aficionados, who are likely to grow in numbers with the introduction of interactive online gaming.

eCommerce still Strong and Growing

Online commerce follows a close lead to image sharing and continues to be the second most popular online activity. An estimated 33 million new Internet users acquired a product or service online, representing a 17% growth in the e-commerce population, much of it (92%) fuelled by Germany, France, Japan, and South Korea.

Despite recent concerns around identity theft and fraud, online banking saw the largest activity growth, with year-over-year increase of 26%, suggesting that many users are not compromising their use of the Internet for conducting financial transactions over security concerns. Today, 42% of Internet users in the surveyed markets, representing roughly 142 million users, bank online. While branches may still dominate banking in Europe, Western European countries drove one-third of banking online growth in 2003. Online banking will continue to rise as users get more integrated with the online medium.

Digital Voice and Data to Change the Way we Communicate

Who would have thought that one day it would cost considerably less money to place a call to China than it would to a neighboring state? Many suggest that the days for landlines are numbered. On one hand, people are disconnecting their landlines for wireless phones, and, on the other, many VoIP (Voice over Internet Protocol) companies are competing to provide less expensive phone communication alternatives over the Internet.

In the past, call failure rate due to limitations in commercially available data transfer technology has been the main reason restricting VoIP's widespread use. That is changing. Globally, 15% of Internet users have received or placed an Internet call in some capacity. Evidently, a larger proportion of users (more than one in five) in South Korea and the urban environments of India, Mexico, Russia and Brazil have attempted data driven voice communication.

Nilesh Modi, co-author of the study, commented: "No doubt, the continued transfer to broadband, and increased deployment of Wi-Fi and cellular technology is most likely to stimulate greater consumer use of VoIP, through both wired and wireless networks."

Methodology

The Face of the Web 2003 study was conducted in October 2003 among a random sample of approximately 7,100 adults in urban Brazil, Canada, urban China, France, Germany, urban India, Japan, urban Mexico, urban Russia, South Korea, South Africa, the U.K., and the U.S. The results of the survey were published in a 135-slide report by Ipsos-Insight in December 2003.

Among the key findings:

  • Globally, 72% of Internet users have sent or received digital pictures or videos;
  • More than half have played music online, while music downloading decreased significantly;
  • One in four have watched TV shows or video streams;
  • Already, 15% have made or received an Internet phone call
  • 50% have communicated using instant messaging;
  • Online banking saw the largest activity growth (by 26%), representing close to 30 million new users;
  • An estimated 200 million people in the measured markets use Instant Messaging

The Face of the Web 2003 study also examined:

  • Equipment and technologies used to access the Internet, as they relate to future home networking possibilities
  • Both wired and wireless activities performed
  • Types of connectivity (i.e., broadband cable, DSL, dial-up modem, etc.) and trends in emerging technologies such as Wi-Fi
  • Extent of wireless Internet connectivity, types of wireless devices in use, and intentions for adopting Internet-enabled wireless Internet technologies
  • Global Internet awareness, trial and usage within thirteen key markets around the world
  • Barriers to Internet usage, future plans to go online and implications of Internet growth.

To read more about The Face of the Web 2003 and to access future press releases, please visit our news center at www.ipsos- na.com/news.

Ipsos-Insight Ipsos-Insight, the flagship marketing research division of Ipsos in the U.S., specializes in research for companies in the following industries: agrifood; cable, media and entertainment; consumer packaged goods; energy and utilities; financial services; health; lottery and gaming; retail; and technology & communications. Ipsos-Insight provides custom and tracking research services to domestic clients, as well as U.S.-based multinationals. It offers concept and product testing, package testing, attitude and usage studies, omnibuses, tracking systems, brand equity, volume forecasting, marketing models, advanced analytics and global research. Ipsos-Insight is an Ipsos company, a leading global survey-based market research group. To learn more, please visit www.ipsos-insight.com.

Ipsos Ipsos is a leading global survey-based market research group, which conducts research in more than 100 countries. Member companies offer160expertise in160advertising, customer loyalty, marketing, media and public affairs research, as well as forecasting and modeling and consulting.160 Ipsos has160a full line of custom, syndicated, omnibus, panel, and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies.

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