Offline Offers Less Net Value Than Online Media, Say Connected Consumers

February 11, 2013

This article is included in these additional categories:

Media & Entertainment | Men | Radio | Social Media | Television | Women

BCG-Online-v-Offline-Media-Value-Feb2013Connected consumers in the US place more monetary value on offline media activities or products than online ones ($1,600 per year vs. $1,132), finds Boston Consulting Group (BCG) [pdf] in a new study. But, because offline media is more costly ($696 vs. $165), on a net basis, consumers derive less surplus value from offline than online media ($904 vs. $967), per the report. BCG describes the surplus as “the value consumers themselves place on a media-related activity or product over and above what they pay for it.”

To arrive at this conclusion, BCG measured economic values associated with 7 categories of media: books; radio and music; US newspapers and magazines; TV and movies; video games; international newspapers and magazines; and user-generated content (UGC) and social networks. Consumers were asked to choose the most and least valuable offering from different groups of media-related activities or products. It is worth keeping in mind that the survey was therefore limited to connected consumers, which likely skews the overall results. (To those with no access to the internet, online media would have no perceived value.)

Turning back to the study results, the economic surplus associated with the categories differs greatly. Offline media wins biggest for books, which offer a $315 surplus offline compared to a $83 surplus online. Radio and music also have a higher surplus value offline than online ($261 vs. $132), as do US newspapers and magazines ($147 vs. $119). Interestingly, TV and movies actually offer more surplus value online than offline. That’s because even though consumers watch far more traditional than online TV, and see far greater gross value in the offline TV and movie experience, online consumption is far cheaper.

Other Findings:

  • Video games, international newspapers and magazines, and UGC and social networks (obviously) all provide consumers with a greater surplus online than offline.
  • Looking at media consumption habits, BCG finds that 44% of total consumption in November 2012 was online, forecasting that to soon pass the majority threshold.
  • Men and women both consume 12 hours a week of online media (although men consume more offline media), but women are more active with UGC and games, while men listent o more music.
  • The difference in media consumption across age groups is fairly insignificant, ranging from a low of 25 to a high of 29 hours per week.
  • On average, today’s consumer owns 3 connected devices, and expects to own 4 three years from now.
  • Consumers tend to place more perceived value to online media the more devices they own.
  • Consumers are 5 times more excited about the internet’s potential worried than they are worried about its potential risks.

About the Data: BCG describes its methodology as follows:

“1. Consumption hours are calculated using the November 2012 results of the BCG U.S. Media Consumer Survey. This analysis is based on the Internet-enabled population and includes only
those hours of consumption attributable to personal use; that is, it excludes educational and business- related use.

“2. The consumer surplus quantifies the benefit of an activity or product to consumers that exceeds what they pay for that activity or product. We measure what is called the “equivalent surplus”””the amount of additional income that consumers would need to receive to generate the same value they get from the activity or product. Quantifying this value is inherently difficult. To elicit reliable valuations, we use a methodology that asks consumers to choose the most and least valuable offering from different groups of media-related activities or products. By including opportunities to save different amounts of money among the options presented, we are able to use statistical methods to derive a monetary value for each activity or product.”

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