Posted by: Ashley Highfield, MD of Microsoft UK (Consumer & Online)
All together now
Almost three quarters of us now have broadband in the UK, nine out of 10 watch digital TV, and a quarter now carry a smartphone, as revealed 19 August by technology industry watchdog Ofcom. Apparently we’re happy with this – there is over 90% positive customer appreciation for each and every digital service. Although the amount we spend each month on our digital lives – a colossal £91 – is falling, that’s mainly because competition in the marketplace is leading to price drops on mobile and other digital services.
The recession appears to have had only a small impact on our digital world. More people will take bundled services from the likes of Virgin, BT and Sky to save costs, but no one’s switching off.
Expert multi-taskers
In fact, consumption is up: we now spend in excess of seven hours a day using media (almost half our waking hours – the average person clearly gets more sleep than I do!). Within these seven hours, some eight hours and 40 minutes worth of media gets consumed, by dint of people doing two or more things at once. Actually, although Ofcom trumpets this, this level of multi-tasking is less than I expected, until you look at the breakdown and realise that the trend is much higher for younger audiences.
At the moment, most of this simultaneous media consumption is still relatively distinct and unrelated. You text your friends while the TV is on, you IM while doing your homework on the PC (MP3 headphones on). But, in the main, these activities are unrelated.
TV still rules… but for how long?
The Ofcom report also highlights that peak time TV viewing, from drama to the mid-week football derby, is still a ‘solus’ activity – watching without any other digital distraction. I believe both these trends are changing fast, the best example of this being the huge rise of in-game gambling – people watching the match on the big screen and using the laptop, tablet or smartphone to place a bet on who’ll score the next goal.
The tipping point came during the world cup is not the fact that more money was bet over the internet versus the bookies, but that more money was bet during the match, necessitating two-screen coordinated activity (watch on one screen, bet on another), rather than one screen or physically placing a bet at a bookies before the match.
There’s another interesting point about all this multi-tasking. The report says that that “16-24 year olds managed to fit just over nine and a half hours’ worth of media into a little over six and a half hours of actual time”. So, far from being obsessed with doing nothing but texting and playing with apps, young adults actually appear to want to spend less time on these activities. They use this time more efficiently, consuming and communicating more in less time, so that they can get on with their busy, social lives.
The smartphone clearly plays an increasingly important part in all this and the rise in the number of users from 5.5m to 12m in the last two years with one of these high-end internet-enabled devices is striking. This is causing a shift in the way phones are used. Under 24s now only use their phone to make calls a quarter of the time: the rest is text (over 100 billion texts sent in 2009) and data (all the growth in broadband take-up in the UK has come from mobile broadband in the last year).
Content is king
So what are people using all this digital technology for and what are they doing with all this time spent in front of multiple screens?
Firstly TV which among the 16-24s at least appears to be enjoying something of a revival. A full 39% of this group cite it as the media they’d most miss if taken away; with internet and mobile (together 50%) dipping slightly. Is this the Simon Cowell effect? Is this trend being witnessed in other countries I wonder? Has the internet failed to offer alternative lean-back entertainment content?
Certainly, in the same way video didn’t kill the radio star, the internet hasn’t done for TV, and won’t: the rise and rise of time-shifted consumption though – up three fold in the last four years – does mean that ever more flexible ways of watching TV will continue to increase: Sky on Xbox and Windows 7, BBC iPlayer on mobile devices, MSN Video Player and so on.
Secondly, it looks like piracy may have plateaued, with the overall decline in recorded music revenue all but having stopped.
Also worth noting that after TV watching, the second most popular daily activity remains email, one reason we’ve spent so much time packing our new Hotmail full of easy to use, time-saving features.
The rise of social media
You have to plough through to page 235 of the Ofcom report before you get to one of the biggest trends: the rise of social media (accounting for almost a quarter of time online) driven by Facebook and Twitter (something we’ve been very aware of here at Microsoft, building Twitter into our search engine Bing, and Facebook and Twitter updates into the new MSN homepage and the new Windows Live Messenger).
However, there is strong evidence that this growth has plateaued. Since October 09 the number of people using social websites like Facebook and Twitter has stayed flat at 30 million in the UK, and the number of hours spent on Facebook has steadily declined from almost nine hours a month in October 09 to 6.5 hours in March 10, a significant annualised fall of 40%. Is ‘social media’ now increasingly becoming part of the web, part of every website, and perhaps less about standalone ‘destination’ sites?
The main brands online remain very consistent across age groups: Google with 56% reach, Microsoft’s online stable of MSN/Hotmail/Bing second with 45%, Facebook third, and BBC and Yahoo! tying for fourth place on 35%. On the PC, the two most popular apps are Windows Live Messenger and Windows Media Player, followed by iTunes and then Skype. (This combination of a large following on MSN/Hotmail/Bing and a leading position on PC apps helps explain why Microsoft is the UK’s number one digital advertising sales house.)
For me, the big take-away is that while this is still a very volatile emerging market, where trends like social media and sites like Twitter and FourSquare can still come from nowhere to pre-eminence very quickly (and may fall away like MySpace and Bebo just as quickly), traditional media like TV and long-standing brands like Google (yes, it’s heritage now!), Microsoft and the BBC, are still in rude health, and with the rise of multi-tasking, will all clearly find a way of bumping along together.
Ashley Highfield is Managing Director and VP of Microsoft UK (Consumer & Online)
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