(19 November 2008 6:00 pm)

MUMBAI: IBM’s second global online survey of consumer digital media and entertainment habits revealed that consumers are adopting digital content services -- such as social networking and videos -- on mobile phones and personal computers at an accelerated pace, and it is impacting traditional consumption habits.

The survey, which was conducted with 2,800 people in six countries -- India, Australia, Germany, Japan, the U.K. and the U.S. -- also shows that people are willing to get personal with advertisers by sharing information about themselves if it results in targetted incentives that match their lifestyle. This presents companies with significant advertising revenue opportunities among today’s informed and empowered consumers.

Last year’s study showed the decline of TV as the primary media device. This year’s study found large scale adoption and usage of digital content services accessed via the PC and mobile phone, with ad-supported models (versus consumer-paid) preferred almost three to one by respondents globally. Adoption for most categories of digital content services doubled from last year, with services such as social networking now at 60 per cent penetration and Internet data plans for mobile devices at over 40 per cent for respondents globally.

While digital content services adoption is widespread, interactivity through features such as user ratings tools and video uploads is primarily concentrated among the more digital savvy consumers.

IBM Media and Entertainment GM Dick Anderson says, "With the rise of Web 2.0, millions of people can instantly create, publish and consume content. In order to survive, advertisers must understand how to reach their target audiences across multiple devices. Knowing distinct consumer segment preferences and delivering consistent content and messaging are essential for long-term success."

76 per cent of consumers surveyed have already watched video on their PC, up 27 per cent from last year. 32 per cent indicated that they have viewed video on a portable device or mobile phone, up 45 per cent from last year. Interest in mobile video content has more than doubled since last year to 55 per cent.

For both PC and mobile video, over 70 per cent of respondents prefer advertising-supported models as opposed to consumer-paid models, representing a huge growth opportunity for the industry. Preference for ad-supported models ranged from 62 per cent to over 80 per cent by country, with Japan having the highest preference for ad-supported on both devices.

Watch Less TV Because of Online Video Alternatives : Consumers are moving beyond the trial stage of watching online video. Of those who have watched videos on their PC, 45 per cent are doing so regularly -- at least a few times per month.

As adoption of online video continues, cannibalization of overall television consumption is becoming more apparent. Over 50 per cent of respondents who have watched online video claim they watch slightly less -- 15 per cent -- to significantly less -- 36 per cent -- television as a result, implying place-shifting alternatives may be changing consumer "couch potato" behaviour.

Hey Corporate America, Get out of my Online Video : When asked about how they prefer to view advertising associated with online videos, the majority of respondents said they prefer to see it before or after a video. Respondents from all six countries polled protested traditional television models such as interruption advertisements during the video or the use of product placements within programs.

IBM Global Business Services global lead partner, strategy and change consulting Saul Berman says, "Consumers have grown accustomed to accessing new forms of content through alternative sources, such as online video and video-on-demand, at no cost to them -- no fee, with very limited advertising shown" said , and the author of many recent IBM studies. The industry must find appealing ways to monetise new content sources or risk a similar fate as that of the music industry where value shifted away from core players."

Trade Information in Exchange for Incentives : Close to 60 per cent of total respondents were willing to provide information about themselves -- such as age, gender, lifestyle or communications preferences -- in exchange for something of value. Younger respondents had fewer concerns about revealing personal preferences, and a sizeable portion of participants over the age of 45 were also willing to share information about themselves. However, all respondents indicated the need for perceived value and incentives as a trade-off to provide personal information.

Consumers listed free high-quality music/videos, discounts to favourite stores and air travel/hotel points as the most desired and attractive incentives. These findings were consistent across all countries polled, with Japan and India having the least reservations about providing personal preferences, with over 62 and 72 per cent of respondents respectively willing to share information, versus 45 per cent of respondents in the US.

Geographical Preferences : Within the six countries polled, Australia and the UK had the highest adoption of social networking sites, with over 65 per cent and 70 per cent respectively, compared to an average of 60 per cent for all countries. The US had the highest adoption of premium video services for the traditional TV at over 45 per cent, versus Australia which had the lowest penetration at less than 25 per cent.

The US also had high adoption of online TV/video sites such as HULU or YouTube, at close to 40 per cent, versus the UK which had the lowest at 28 per cent. Japan, Germany and India had the highest adoption of mobile services, including Internet data plans and mobile content plans for video and music.

While there were differences between countries, the majority of all respondents stated that recommendations from friends had the most impact on the type of content they viewed over celebrity, amateur and professional endorsements.