Deloitte 'State of the Media Democracy' Survey: Recession Intensifies America's Love For TV

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December 15th, 2009

via press release:

Deloitte 'State of the Media Democracy' Survey: Recession Intensifies America's Love For TV

A New Era of Television is Near as the TV Set and the Internet Converge

The Future of Online Advertising is Social; Consumers Turning to Each Other When Making Purchasing Decisions Online

NEW YORK, Dec. 15 /PRNewswire/ -- In a year dramatically impacted by the economic recession, consumers have returned to in-home entertainment, showing increased interest in watching television over other types of entertainment. Released today, Deloitte's 2009 "State of the Media Democracy" survey reveals a 26 percent increase in the number of Americans choosing the TV as their favorite type of media as compared to the previous year.

Deloitte's fourth edition State of the Media Democracy survey assesses media consumption preferences of 2,046 consumers, ages 14 to 75 in the United States, revealing significant trends including a surge in television viewing, the ascension of the game console as a stand-alone media platform, the mobile phone's rapid decoupling of the Internet from the desktop and the rise of tribal marketing.

More than 70 percent of survey respondents rank watching TV in their top three favorite media activities. And, when ranked alongside activities such as surfing the Web, listening to music or reading, 34 percent of consumers place it at the top of the list. This is a substantial increase from last year and more than double the percent selecting the number two choice, the Internet, which came in at 14 percent.

When watching their favorite TV programming, 86 percent of survey respondents prefer watching on their television set, enjoying the programming either live, via their DVR/TiVo, or using an "On Demand" feature. While less than 10 percent of Americans say they prefer watching the same content online, a growing number of consumers are using online platforms to watch their favorite TV shows.

At the same time, 72 percent of Americans report that they have been forced to reduce their purchases of other entertainment products like movies, concerts, sporting events, DVDs, CDs and videogames.

According to the survey, consumers are watching close to 18 hours of television programming on their home TV in a typical seven day week -- up notably from less than 16 hours last year. Millennials (ages 14-26) had the largest increase, to almost 15 hours from 10.5 hours.

Potentially foreshadowing an increasingly central role for the television, 65 percent of respondents would like to be able to easily connect their home TV to the Internet so that they can view videos or downloaded content. This is a significant trend that has gained strength over the last three years.

"Television content continues to fascinate Americans," said Ed Moran, Deloitte director of insights and innovation. "The recession has increased demand for in-home entertainment, with consumers choosing to invest in the enhancement of their TV experience. This dynamic, combined with new flat panel models that access content from the Internet, will further blur the lines between TV and the Internet."

Video Game Consoles Emerge as "Shadow" Distribution Channel

In 2009, gaming surged on every major platform, notably the console. Nearly 60 percent of U.S. homes now own a video game console, a dramatic increase from 44 percent three years ago. This growth is being driven primarily by Generation X (Xers) (ages 27-43) and Baby Boomers (Boomers) (ages 44-62), with almost 70 percent (53 percent three years ago) of Xers and 44 percent (31 percent three years ago) of Boomers owning a Wii, Xbox, Playstation or other system.

Increased console ownership by Xers and Boomers has also driven increased game playing. Thirty-one percent of surveyed Boomers played a newly released videogame via a game console over the past six months, up significantly from 12 percent in 2008. The number of Xers playing these games increased to 54 percent from 37 percent over the last year. Millennials jumped to 74 percent from 59 percent in 2008 and Matures (ages 63-75) went to 8 percent this year from 3 percent in 2008.

"The last year has posed serious financial challenges for American families and their media consumption habits have changed as a result," said Phil Asmundson, vice chairman and Deloitte U.S. Technology, Media & Telecommunications leader. "The dramatically increased appeal of the gaming console is noteworthy on two levels. It is further proof of the renewed focus on the television as the home entertainment hub, and it also raises the possibility of the console becoming a significant content distribution channel into the home."

Mobile Phones Decoupling the Internet from the Desktop

The mobile phone is a critical link for the connected American consumer and continues its popularity as an entertainment device. One-third of surveyed consumers use their mobile phone as an entertainment device and 47 percent of smart phone owners identify the device as one of their three most valuable media and entertainment products -- a significant increase from 20 percent last year.

Survey findings also indicate that mobile phone use is rapidly decoupling the Internet experience from the desktop for almost half of the population. Forty-eight percent of those surveyed have data plans for their mobile phones and 42 percent are using their phones to access the Internet. This decoupling is expected to facilitate new consumer behavior including mobile search, social networking and purchasing.

The online shopping experience is already beginning to translate to the mobile device, with 15 percent of consumers already purchasing products on their phone. Some of the most popular mobile activities, according to the survey include: text messaging (72 percent), accessing the Internet (42 percent), online search (30 percent), downloading applications (27 percent) and using GPS (26 percent).

Online Recommendations More Influential than Online Advertising...Time for Tribal Marketing?

Television continues to reign as the most influential advertising medium, with 83 percent of consumers identifying TV advertising as one of the top three media with the most impact on their buying decisions. Online advertising ranks much lower in impact than television. Less than half of those surveyed identify online advertising, which includes banner and video ads, search engine result ads and pop-ups, amongst the top three.

The ability of ads on websites to move traffic to other sites has dropped from 72 percent to 59 percent over the past three surveys. Moreover, respondents articulate a decreased inclination to click on more Internet ads, even if the ads are targeted to their needs. Those who say they would click on more Internet ads if they were targeted to their needs fell from 66 percent in the 2007 edition of the survey to 50 percent in the current edition.

While current online advertising is still effective, survey findings point to a significant opportunity for advertisers to take advantage of social tools and engage the consumer in a more impactful new way.

Over half of all U.S. consumers and 69 percent of Millennials believe that online customer reviews and ratings influence their buying decisions more than any other type of online advertising, and 51 percent have purchased products based on an online recommendation. In fact, 24 percent of U.S. consumers would like to have an online service that recommends a product based on other consumers' preferences.

According to the survey, one-quarter of U.S. consumers are socializing online almost every day and nearly 60 percent currently maintain a social networking site, up from 48 percent last year. The connections maintained over social networks provide powerful sources for trusted recommendations.

"Consumers prefer recommendations from a trusted group, not a corporation," said Moran. "Businesses need to evolve beyond the comfort zone of applying traditional ad techniques online. Success will involve engaging tribes of individuals sharing a common passion. Working with consumers to take hold of a company's message, and then to manage, amplify, and spread it to their own network of trusted contacts will generate new levels of brand loyalty."

About the Survey

Deloitte's fourth edition State of the Media Democracy survey was architected by Deloitte's Media and Entertainment practice and conducted by Harrison Group, an independent research company, between September 11 and October 13, 2009. The online survey polled 2,046 consumers between the ages of 14 and 75 in the United States. The survey results have a margin of error of plus or minus five percentage points. For more information on Deloitte's State of Media Democracy survey, please visit http://www.deloitte.com/us/mediademocracy

About Deloitte

As used in this press release, "Deloitte" means Deloitte LLP and Deloitte Services LP, a separate subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

 
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