surveying the digital future: the impact of the internet

The Impact of the Internet--Year Four Report, 2004

Surveying the Digital Future—The World Internet Project USC Annenberg Center for the Digital Future

“Surveying the Digital Future: A Project of The Center for the Digital Future at USC Annenberg, 2004

Surveying the Digital Future:The Impact of the Internet

Year Four: Ten Years (1994-2004)/ Ten Trends

Jeffrey Cole, Ph.D.Director, The Center for the Digital Future

at USC Annenberg

MicrosoftAugust 27, 2004Redmond, WA




Ten Years (1994-2004)/Ten Trends

1994 the beginning of the popular Internet (1969 beginning of ARPANET)

AOL offered Internet access as a additional feature of walled-garden service

Netscape browser first appeared




Lost Research Opportunity

A Longitudinal Study of Television, beginning in 1948 could have found

– Where the time for television came from

– How it affected …consumer behavior, connection to the civic process, desire to travel, career goals and much else




We are undertaking the study of the Internet that

should have been conducted on television in the late

1940s




Countries and Regions in Current Comparisons

United StatesSingaporeItalySwedenJapanTaiwanGreat BritainIndiaIranAustraliaBoliviaHong Kong

Mainland China*MacaoSouth KoreaGermanyHungarySpainChileArgentinaBrazilPhilipinesPortugualAfrica about to join




Trend #1

The Digital Divide is closing (but not yet closed)




Internet Use Continues to Grow

Household access over 60% Hours per week at 12.5 Growth in hours/years of experience Gap between new and experienced

users narrowing Gender and income gap narrowing




Hours online from any location (Year to Year)

9.49.8

11.0

12.5

0

2

4

6

8

10

12

14

2000 2001 2002 2003

Year of Study

Ave

rag

e H

ou

rs o

f T

ota

l In

tern

et U

se p

er W

eek

Weihuaextra (W-1)




Number of hours online at any location by years of experience

7.26.3

8.5

17.1

12.1

0

2

4

6

8

10

12

14

16

18

20

< 1 Year 1 to LT 3 Years 3 to LT 5 Years 5 to LT 7 Years 7 Years or More

Years of Internet Experience

Ave

rag

e H

ou

rs o

f T

ota

l In

tern

et U

se p

er W

eek

Weihuaextra (W-2)




Percent of Males and Females Who Use the Internet

Stage 4 – Usenet x Gender (10-14-03)

63.6%

50.4%

20.3%

41.7%

54.7%

67.8%

37.8%

47.2% 46.4%

67.7%

25.1%

73.1%

69.0%

27.2%

34.0%

28.8%

53.8%

46.2%

21.5%

15.1%

41.7%

55.0%

23.5%

64.4%

0%

20%

40%

60%

80%

Britain Germany Hungary Italy Japan Korea Macao Singapore Spain Sweden Taiwan USA

Pe

rce

nt

of

Re

sp

on

de

nts

Male Female




How many hours per week do you use the Internet for…?

Q710 (B-1)

7.2%

2.8%

6.4%

11.3%

1.3% 0.7%2.7%

22.3%

7.8%

4.3% 2.5%4.3%

5.5%3.8%

2.7% 3.0% 0.7% 0.9%

4.2%

2.9%0.2%

22.2%

11.4%

6.3% 7.1%7.0%

3.3%

5.0% 4.7%3.2% 2.5%

3.1%4.2%

2.5% 3.4% 3.0%

0%

5%

10%

15%

20%

25%

Categories of Internet Usage

Per

cen

t T

ota

l H

ou

rs O

nli

ne

New Users Experienced Users




Trend # 2

Broadband Changes Everything




How do you connect to the Internet? (Year to Year)

88.1%

8.0%3.9%

1.2%

81.3%

11.5%

1.7%3.7%

16.6%

.4%5.0%

24.2%

0.6%

12.0%

74.8%

61.5%

0%

20%

40%

60%

80%

100%

Telephone Modem Cable Modem Web TV DSL

Per

cen

t o

f U

sers

2000 2001 2002 2003

Q360 (P-1)




Broadband Changes EverythingBigger gap between dial-up and broadband than between non-

user and dial-up

Dial-up is disruptive — broadband integrative

Broadband determines how often people log on, how long they stay on, what they do online and where they log on from

Broadband predicts purchasing behavior and overall relationship to Internet




Broadband vs. Dial-up

Broadband users on 17.3 hours a week vs. 10.6 for dialup

Dial-up users on 2-4 times a day, broadband 16-30+

Broadband users do more of everything except using medical information and distance learning




The Future of Broadband

Most users expect to be on broadband

Broadband users leading effort in WiFi and networks

Broadband users spend more on all electronics and also on on-line buying

Early broadband users are innovators across many areas




Trend #3

Media use (especially television) has shown

profound change




Offline Media Use Continues to Change

Television dispacement changing Newspaper and magazine use drops for

second year Book use declining slightly for first time Radio and home film watching remains

stable Age makes enormous difference




Average Hours per Week Spent Watching Television:Users vs. Non-Users

HTV x Usenet – 7 extra questions (10-22-03)

13.0

18.3

11.8

20.9

10.2

16.2

20.4

14.112.9

15.5

15.9

20.2

15.514.5

18.7

22.9

17.5

26.3

18.1

24.3

15.623.0

0

5

10

15

20

25

30

Britain Chile(Santiago)

Germany Hungary Japan Korea Macao Singapore Sweden Taiwan USA

Nu

mb

er

of

Ho

urs

Users Non-users




During a typical week, about how many hours of your leisure time, if any, do you spend with the following activities OFFLINE?

(Use)

0.92.1

2.82.0

0.41.5

0.6

4.8

16.2

1.6

11.6

7.8

6.1

4.7

8.1

3.1

4.75.5

0

5

10

15

20

Reading books Watchingmovies in the

theater

Watching rentedmovies at home

Playingvideo/computer

games

Listening torecorded music,

such as CDs,tapes, MP3 files

Readingnew spapers

Readingmagazines

Listening toradio

Watchingtelevision

Ave

rag

e N

um

ber

of

Ho

urs

per

Wee

k

User Non-user

Q690 (K-4)




During a typical week, about how many hours of your leisure time, if any, do you spend with the following activities OFFLINE?

(Age)

Q690 (K-5)

2.33.0

1.7 1.50.9

2.71.8

10.9

4.5

0.61.9

0.7

5.0

2.82.1

8.6

11.9

6.5

0.4 0.9 0.8

4.25.4

3.1

7.6

15.3

3.7

7.76.7

9.9

3.1

7.4

4.2

2.0 1.9

7.9

0

5

10

15

20

Reading books Watching moviesin the theater

Watching rentedmovies at home

Playingvideo/computer

games

Listening torecorded music,

such as CDs,tapes, MP3 files

Readingnewspapers

Readingmagazines

Listening toradio

Watchingtelevision

Ave

rag

e N

um

ber

of

Ho

urs

per

Wee

k

Youth (< 18) 18-34 35-54 55+




Online Media making a Real Impact

Online newspaper readership rising Magazine and radio use climbing Online books, telephone and television

use still very low Online game use very high, but drops

slightly in 4th year For young, some online media use

VERY high




During a typical week, about how many minutes of your leisure time, if any, do you spend with the following activities online?

(Year to Year)

50.2

11.8

63.4

40.4

15.4

21.5

10.8

46.5

17.3

27.7

1.7

10.9

6.1

35.6

3.47.4

20.2

6.5

55.6

15.7

42.0

1.3

49.0

5.9

0

10

20

30

40

50

60

70

Reading books Playingcomputer

games

Listening torecorded

music

Readingnew spapers

Readingmagazines

Listening toradio

Talking on thetelephone

Watchingtelevision

Av

era

ge

Nu

mb

er

of

Min

ute

s p

er

We

ek

2001 2002 2003

Q700 (K-2)




During a typical week, about how many minutes of your leisure time, if any, do you spend with the following activities online?

(Age)

106.0

36.8

3.8

57.0

46.0

0.60.8

35.5

18.7

45.8

15.8 13.17.2

1.11.6

50.0

22.0

5.511.3 8.1

1.4

11.319.1

129.0

3.6

17.9

29.3

11.4

60.0

12.7

29.0

19.8

6.2 5.4

37.5

2.0

0

25

50

75

100

125

150

Reading books WatchingMovies

Playingcomputer

games

Listening torecorded music

Readingnewspapers

Readingmagazines

Listening toradio

Talking on thetelephone

Watchingtelevision

Av

era

ge

Nu

mb

er

of

Min

ute

s p

er

We

ek

Youth (< 18) 18-34 35-54 55+

Q700 (K-4)




Trend #4

Internet is the most important source of

information (for Internet users)




Internet #1 Information Source

First place people go to for information Broadband greatly accelerates this

process Want access to Internet everywhere Growth is in information, not

entertainment




How important is the Internet as a source of information? (Connection)

4.5%7.3%

39.0%

27.4%

21.8%

1.5%3.9%

23.9%

40.7%

30.1%

0%

10%

20%

30%

40%

50%

Not important Somewhat important Moderately important Very important Extremely important

Per

cen

t o

f R

esp

on

den

ts

Telephone Modem Broadband

Q530a (P-1)




Trend # 5

Reliability and credibility of media varies greatly

based on source and in different countries




Reliability and Credibility of Media

Continuing to drop—a healthy trend

Credibility high in much of the world

Trust in information varies widely depending on familiarity with the source




How much of the information on the World Wide Web overall do you think is reliable and accurate? (Year to Year) (Users)

0.4%

7.1%

37.7%

52.1%

2.9%0.0%

5.7%

36.3%

56.1%

1.9%0.2%

7.2%

39.9%

2.2%0.1%

8.3%

41.5%

48.8%

1.3%

50.6%

0%

20%

40%

60%

80%

None Small Portion About Half Most All

Per

cen

t o

f U

sers

2000 2001 2002 2003

Q160 (M-1)




Information on the Internet: Is it Reliable and Accurate? (Users Age 18 and above)

Stage 5 – RELIA x Usenet (10-14-03)

7.2%

18.5%

5.0%

25.3%

4.8%

18.3% 17.6%

36.0%

7.1%

54.0%

13.4%

53.1%

47.3%

54.9%

13.3%

59.7%

26.4%

58.0%

69.7%

32.3%

0%

20%

40%

60%

80%

Britain China Germany Hungary Japan Korea Singapore Spain Sweden USA

Per

cen

t o

f A

du

lt U

sers

None of it or Some of it Most of it or All of it




How much of the information on the World Wide Web sites that you visit regularly do you think is reliable and accurate?

0.0%3.0%

18.7%

70.2%

8.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

None of it A small portionof it

About half of it Most of it All of it

Per

cen

t o

f U

sers

Wh

o F

req

uen

tly

Vis

it W

ebsi

tes

Q170 (M-2)




How reliable and accurate are: News Pages posted by Established Media

1.3%5.0%

19.4%

62.1%

12.3%

0%

10%

20%

30%

40%

50%

60%

70%

None of it A smallportion of it


Per

cen

t o

f U

sers

Q173-1 (M-1)




How reliable and accurate are:Government Websites

2.1%6.1%

18.3%

56.5%

17.0%

0%

10%

20%

30%

40%

50%

60%

None of it A smallportion of it

About half ofit

Most of it All of it

Per

cen

t o

f U

sers

Q173-3 (M-1)




How reliable and accurate are: Information Pages posted by Individuals

3.0%

35.6%

51.8%

8.1%

1.4%

0%

10%

20%

30%

40%

50%

60%

None of it A small portionof it


Per

cen

t o

f U

sers

Q173-2 (M-1)




Trend #6

Online buying increasing substantially and piracy

starting to decline




In an average year, how many times do you purchase products or services over the Internet? (Adult purchasers)

10.81

28.3229.93

0

10

20

30

40

2001 2002 2003

Year of Study

Av

era

ge

Nu

mb

er

of

An

nu

al P

urc

ha

se

s

Q780 (W-1)




Downloading “Free” Content

41% of new users use P2P such as Kazaa

62% of experienced users use P2P

14% of Internet users have at least 100 free downloaded pieces of content




Attitudes Toward Dowloading

94% of users believe taking a CD from a record store is wrong in all instances

36% believe that “taking” the same content from the Internet is wrong in all instances

Little change from 2000 through early 2003




Change in 2003-4

For the first time there seems to be a significant crack in the unwillingness to pay for “any” digital content. The arguments that artists deserve fair pay or the costs of a record company never carried any weight and still do not. What seems to have changes is the available of “fair” services (i-tunes) and subpoenas.




Differences between Music and Movies

Among those under 30, significant belief that CDs are “over-priced” and that unfair to buy entire CD for “one” song.

Same group feels DVDs (movies) are fairly priced and you “get more than you pay for” with extras.




Trend #7

Fears about privacy and security are still extremely high, but no longer are a

barrier to buying




Privacy and Security Fears

Overall still at very high levels Shift from extremely concerned to

somewhat concerned Users do not have to see their fears

disappear, buying in spite of fear Internet users buying earlier, less lag

time




How concerned would you be about the security of your credit card information when or if you ever bought something online?

(Experience)

9.2%

19.5%

51.4%

35.9%

23.0%

39.5% 39.0%

16.5%

2.4%5.1%

41.5%

17.1%

0%

10%

20%

30%

40%

50%

60%

Non-users New Users (<1 Year) Very Experienced Users (7 or More Years)

Pe

rce

nt

of

Re

sp

on

de

nts

18

an

d O

ve

r

Not at All Concerned Somewhat Concerned Very Concerned Extremely Concerned

Q830 (W-3)




How concerned would you be about the security of your credit card information when or if you ever bought something online?

(Purchase Frequency)

7.1%

70.0%

14.3%15.1%

8.6%10.9% 11.3%

49.0%

59.0%

14.6%

23.5%16.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Online Purchase <2 times/month Online Purchase 2-4 times/month Online Purchase >4 times/month

Per

cen

t o

f In

tern

et P

urc

has

ers

18 a

nd

Ove

r

Not at All Concerned Somewhat Concerned Very Concerned Extremely Concerned

Q830 (W-6)




Trend #8

You do not become a “Geek” (or stay one) when

you go online




Online world is not filled with Geeks and Nerds

You do not put your social life at risk when you go online

Users get 1 hour less sleep per week and exercise a bit more

Users spend same amount of time with family and more time with friends

Users less alienated, lonely and more confident




Trend #9

Parents losing some of their enthusiasm for the Internet and more likely to equate

it with television




Parents losing some of their enthusiasm

Believe their children are at great risk (but also that it is important to be online)

More likely to feel children spend too much time online and to punish by denying Internet

Less likely to believe that Internet will help their children’s grades in school




Does anyone under 18 in your household get punished by being denied access to…?

49.3% 48.9%

53.0%

32.1%

37.4% 36.5%

45.1%

56.2%

0%

20%

40%

60%

2000 2001 2002 2003

Pe

rce

nt

of

Ad

ult

Us

ers

wit

h C

hild

ren

in H

ou

se

ho

ld W

ho

Ha

ve

Ac

ce

ss

to

Inte

rne

t a

t H

om

e TV Internet

Q1070 (W-3)




How important is the Internet for your schoolwork? Would you say it is…

3.6%

34.8%40.1%

21.5%

0%

20%

40%

60%

80%

100%

Not At All Important Somewhat Important Very Important Extremely Important

Per

cen

t O

f R

esp

on

den

ts

Q1135 (E-1)




In your opinion, have the grades of those under 18 in your household improved or declined since your household started

using the Internet?

20.5% 22.2%15.9%

76.0% 75.2%79.8%

3.6% 2.5% 4.3%

0%

20%

40%

60%

80%

100%

2001 2002 2003

Children's Grades

Per

cen

t o

f A

du

lts

wit

h C

hil

dre

n w

ho

Use

In

tern

et i

n H

ou

seh

old

Improved Stayed the Same Declined

Q1080 (W-1)




Trend #10

E-nuff Already




Some Signs of a Slowdown

Those who expect to go online dropping

Some drop off the net (but most expect to return)

Suggestions of e-mail and information overload: “E-nuff already.” No clear e-mail etiquette




How likely will you be to use the Internet within the next year?

Q610 (MW-2)

41.4%44.3%

47.0%

38.8%

0%

10%

20%

30%

40%

50%

60%

2000 2001 2002 2003

Per

cen

t o

f N

on

-use

rs




Do you think that you will ever go back to using the Internet?

73.7%

26.3%

0%

20%

40%

60%

80%

100%

Yes No

Per

cen

t o

f P

ast

Use

rs

Q620 (M-1)




How quickly should one reply to a personal e-mail message? (Experience)

29.7%

27.0%

18.9%

2.7%

13.5%

0.0% 0.0%

2.7%

0.0%

5.4%

14.7%

33.7%

30.8%

2.3%0.8% 0.4%

3.1%

0.0%

2.5%

11.8%

0%

10%

20%

30%

40%

As Soon asPossible

In One Day In Tw o orThree Days

In Four orFive Days

Within aWeek

Within Tw oWeeks

Within aMonth

WheneverOne Can GetAround to It

It Is NotNecessary

to Reply

Other

Time

Per

cen

t o

f R

esp

on

den

ts

New Users (less than 1 year) Very Experienced Users (7 years or more)

Q263 (E-2)




Overall, do you think that new communications technologies such as the Internet, cell phones, and pagers have made the world a better

place, a worse place, or neither better nor worse? (Non-users)

16.7%

34.0%

49.3%

17.7%

31.6%

50.7%

17.4%

28.7%

53.9%

18.6%

36.8%

44.5%

0%

10%

20%

30%

40%

50%

60%

Worse place Neither better nor Worse Better place

Per

cen

t o

f In

tern

et N

on

-use

rs

2000 2001 2002 2003

Q180 (M-3)




Overall, do you think that new communications technologies such as the Internet, cell phones, and pagers have made the world a better

place, a worse place, or neither better nor worse? (Users)

7.4%

26.6%

66.0%

5.4%

32.6%

62.0%

6.0%

28.4%

65.6%

4.5%

39.1%

56.4%

0%

10%

20%

30%

40%

50%

60%

70%

Worse place Neither better nor Worse Better place

Per

cen

t o

f In

tern

et U

sers

2000 2001 2002 2003

Q180 (M-2)




Ten Internet Trends 1994-2004

1. The Digital Divide is closing (but not yet closed.

2. Broadband changes everything 3. Media use (especially television) has

shown profound change 4. Internet is the most important source of

information (for Internet users) 5. Reliability and credibility of media varies

greatly based on source and in different countries




Ten Internet Trends 1994-2004

6. Online buying increasing substantially and piracy starting to decline

7. Fears about privacy and security are still extremely high, but no longer are a barrier to buying

8. You do not become a “Geek” (or stay one) when you go online

9. Parents losing some of their enthusiasm for the Internet and more likely to equate it with television

10. E-nuff Already




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