New research has revealed that US consumers derive more value from online media than offline media.
Boston Consulting Group defined the value consumers themselves place on a media-related activity or product over and above what they pay for it as ‘consumer surplus’.
According to the findings, the average online user receives a ‘surplus’ from online media of approximately $970 per year—or about 2.5% of the average US annual income—compared with approximately $900 for offline media.
John Rose, a BCG senior partner and co-author of the report, said: “The fact that the consumer surplus is already higher for online media is somewhat extraordinary, given that online revenues represent less than 15% of the total media industry pie. This surplus will only continue to grow, driven by consumers’ appreciation for an expanding array of high-quality content and the proliferation of devices.”
BCG examined the surplus consumers derive from seven categories including books, radio and music, U.S. newspapers and magazines, and found the highest surplus came from user-generated content (UGC) and social networks with $311, accounting for about one-third of the online total. Books were found to record the greatest offline figures.
Additionally, the study examined the growing rate of device ownership with findings showing 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 jumped 50% when people start using a second connected device, which is often their first mobile device, said the report.
Neal Zuckerman, a BCG partner and co-author of the report, added: “Shrewd media companies that build effective digital capabilities will enjoy opportunities to extract some of this growing consumer surplus for themselves.
“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.”