KPMG published KPMG International 2013 Digital Debate survey.
Urban consumers in China, Brazil and Singapore are proving to be the world’s most voracious users of digital media, powered by the rapid uptake of smartphones and tablets according to the KPMG International 2013 Digital Debate.
All around the world, consumers are showing an insatiable hunger for media in all its forms be it digital or offline, according to the survey which measures the current impact of digital and traditional content on approximately 9,000 consumers in nine countries around the world.
“Consumers in China, Brazil and Singapore across all age groups are accessing and using media at an astonishing pace,” says Gary Matuszak, Global Chair, Technology, Media and Telecommunications at KPMG. “They’re quick to acquire hand-held mobile devices, and are incredibly receptive to all forms of information, news and entertainment from TV, internet, newspapers, magazines and radio.”
Devices set ground rules for new revenue models
A new generation of mobile-centric consumers is getting its first media experience via devices. This growing segment has a much greater preference for digital media, and the coming of next-generation, high-speed mobile networks will accelerate this trend.
Among urban Chinese consumers, 78% own a smartphone, slightly more than those owning laptops (76%), and 51% say they have a tablet computer – a higher penetration than the US, UK, Germany or Australia. Overall, 53% of total respondents own a smartphone and just over a quarter (26%) own a tablet computer.
Moreover, consumers from China, Brazil and Singapore not only prefer to access their content digitally, they’re more willing to pay for it. Mobile-centric consumers’ propensity to pay for content may provide invaluable insights to media and tech providers in mastering breakthrough revenue models.
“In emerging, high-growth markets such as China, people are not encumbered with the legacy of PCs and have leap-frogged straight onto portable devices,” observed David Elms, Head of Media for KPMG in the UK. “This creates amazing opportunities for tech and media companies many of which are struggling to devise models that are profitable and which truly sate consumers’ vast needs for information. They need delve into understanding content much more intimately as it relates to their customers and then, marry the two.”
Traditional media still popular
Interestingly, consumers across all markets spend a similar amount of time accessing media online as they do using traditional media.
Visiting social networking sites, accessing maps and directions, and viewing news online are the top three digital activities across all markets. Consumers in China and Brazil lead all countries in accessing social networking, news and downloading music.
In the traditional media space, TV is still the most popular traditional medium across all markets followed by listening to the radio and thirdly, print such as newspapers and magazines.
”The move to digital has had a dramatic impact on how we consume music, publishing and newspapers. But we are still early in the process of a transition to digital anytime anywhere availability across all media sectors,” said Paul Wissmann, Head of Media & Telecommunications, KPMG in the US.
“Until online services can provide content – especially film and video – on all devices, including home televisions, and be as seamless and easy to use as their offline counterparts, ‘old’ and digital media will continue to co-exist.”
Online, time spent doesn’t necessarily mean money – yet
Most consumers are still spending more money offline in traditional activities than online, although this varies considerably according to country and type of media.
Overall, however, consumer spending for digital content is gradually rising, with respondents reporting higher year-on-year spend for every form of digital media. In North America and Europe, for example, 37% and 20% of consumers, respectively, say that have increased their spend in accessing magazine applications compared to last year.
While China, Brazil and Singapore lead in their willingness to pay for online content, consumers in North America and Europe show a higher willingness to only pay for access to certain content, such as dating sites and books and less on news, music and games, for example.
“A number of content owners are trying to repeat the traditional revenue models online, aiming to reverse the trend of getting information for free. Consumers are only prepared to pay for content if it is perceived to have value, at the right price, in the right format and accessible on the right device,” KPMG’s Elms said.
Offline, consumers are cutting their expenditures on packaged media, especially CDs, DVDs and console games, with the same proportion of all respondents (23%) saying they have spent less on CDs and DVDs in the last 12 months. The big offline winners are those tied to a venue: sporting events, concerts, and cinemas.
Rise of the ‘digital multi-tasker’ – opportunity and threat to advertisers
The ‘second screen’ experience lets consumers interact with multiple connected devices simultaneously often while also watching TV. Nearly half (48%) of all Chinese consumers say they use their smartphone while viewing the TV, while 60% say they use their laptop while watching TV, around half (52%) read newspapers and around a third (36%) are accessing social networks. Half of all North American respondents say they watch TV and access the internet for reasons other than social networking using a laptop or a PC. 44% of European respondents say they do the same.
Accessing these multiple devices concurrently appears to impact advertising effectiveness – but not everywhere, according to the survey. Urban consumers in Brazil, China and Singapore have the highest receptivity to advertising and accept that it can underwrite the cost of the content they enjoy. 77% of Chinese consumers and 62% of Brazilian consumers are happy to receive online ads in return for lower-priced or free services.
The story is a little different in the more developed markets, where the aversion to advertising is greater, with only 46% of North Americans and 39% Europeans willing to accept such a deal.
“The opportunity exists for media companies to tap into ‘second and third screens’ via social media channels such as Twitter and Facebook and create an overall experience and effectiveness for advertising,” Elms asserted. “At the current time, however, the integration tends to be only partial.”
Media and technology players cannot go it alone
To satisfy the intense information needs of tech-savvy consumers, content, devices and distribution channels need to be integrated, the survey suggests. It’s unlikely that any single player can master all these components, making cooperation and collaboration a necessary approach.
“The new class of digital consumers wants more and different ‘information experiences’ and is prepared to pay for high-quality, video, music, books, and digital print material from recognized brands,” said KPMG’s Matuszak. “While tech companies have powered the ecosystem for the new user experiences and will continue to drive innovation in content creation and delivery models, traditional media companies have the opportunity to evolve, as some have done, to join tech companies as innovators in these areas, and open the door to new business models.”
The trends described in the survey can also be seen in Russia, says Yerkozha Akylbek, Partner and Head of Communications & Media at KPMG in Russia. "Russia has made considerable progress in terms of introducing new technology," he said. "For example, there is the fact that major media companies see great potential in online media services such as ivi.ru and now.ru and are investing in their development, providing some of their content free of charge, in addition to the not entire legal content users can find on social media networks. Additional impetus for growth may come from the future development of devices (televisions) that make it possible to use online resources and media content."
"We are also seeing greater interest from users in e-magazines, even if they have to pay for them," observed Yerkozha. "And Russian branches of international publishing houses are putting considerable resources into developing such applications (e.g. Condé Nast magazine). In addition, Russia's biggest media company, Gazprom Media, launched its own online video advertising sales house more than a year ago."
Yerkozha believes that in the next few years this trend is only going to intensify and we will see new products and mobile devices. For example, he forecasts rapid development of data transmission technologies, "because the volume of data transmitted is increasing at insane rates."
Another area of innovation where users are awaiting advances is the development of a universal payment device. "As one of my colleagues says, we can expect to see virtual money that can be used for payment not only online but also in everyday life," he said. "Unfortunately, bank cards do not yet have all the features required for users to feel totally comfortable."
About the survey
To understand how consumers are allocating their time and budgets to media in all its forms, KPMG International commissioned YouGov to undertake an online global survey of more than 9,000 consumers across North America (US, Canada), Europe (Germany, Spain, United Kingdom), Asia Pacific (Australia, metropolitan China, and Singapore), and Latin America (metropolitan Brazil). Metropolitan China has an estimated population of 426 mln and metropolitan Brazil 50 mln. In each market, around 1,000 adults (aged 16+) were interviewed, with the exception of the US, where the interviewees were all 18+ and China and Brazil where the data was representative of the “urban populations”. The data was weighted across age, sex and region. All figures, unless otherwise stated, are from YouGov Plc. Fieldwork was undertaken between 1st and 15th October 2012.
YouGov is an international, full-service market research agency offering added value consultancy, qualitative research, field and tab services, syndicated products such as the daily brand perception tracker BrandIndex and social media analysis tool SoMA, fast turnaround omnibus and comprehensive SixthSense market intelligence reports. YouGov’s sector specialist teams serve financial, media, technology and telecoms, FMCG and public sector markets.
YouGov is considered a pioneer of online market research and has a panel of 2.5 million people worldwide, including over 350,000 people in the UK representing all ages, socio-economic groups and other demographic types. As the most quoted market research agency in the UK, YouGov has a well-documented and published track record illustrating the accuracy of its survey methods.
For further information visit yougov.co.uk