The head of the Center for the Digital Future shared his insights with iMedia Summit attendees.

In July 2004, Jeffrey Cole joined the USC Annenberg School for Communication as Director of the newly formed Center for the Digital Future and as a Research Professor. Prior to joining USC, Cole was a long-time member of the UCLA faculty and served as Director of the UCLA Center for Communication Policy, based in the Anderson Graduate School of Management. At UCLA and now at USC Annenberg, Cole founded the World Internet Project, a long-term longitudinal look at the effects of computer and Internet technology on all aspects of society, which is conducted in over 20 countries. At the announcement of the project in June 1999, Vice President Al Gore praised Cole as a "true visionary providing the public with information on how to understand the impact of media."

In an Insight Presentation to the iMedia Summit last month titled, "New Internet Trends: Changing Media Use, Declining Credibility and the Rise of Broadband," Cole enlightened the audience with results from 10 years' worth of research. Here's the first third of that conversation:

It’s really a pleasure to be here. Some of you may know our work from UCLA, the UCLA Internet Report, when I ran the Center for Communication Policy. I made a move, along with my entire staff over the summer, to USC, where we now run the Center for the Digital Future. And actually, the move went smoothly. There were no real divided loyalties until the football game on Saturday. And actually, it worked out pretty well. UCLA did well until the last minute, and then USC won. And in retrospect, I think that was a pretty good solution.

Let me share with you a little bit of what we’re doing, and a little bit of what we’re finding, particularly as it relates to some of the businesses you’re interested in.

As we start, I actually think of this, the year 2004, as the 10th Anniversary of the public Internet. The Internet itself has been around since 1969, as the ARPANET. As a matter of fact, my former university, UCLA, considers it the birthplace of the Internet, with some justification. But interestingly, UCLA didn’t even decide that the Internet was worth taking credit for until about 1997, 1998. 

But this is the 10th year that the public has been on the Internet. It was 10 years ago, in 1994, that AOL went from a walled garden, or a propriety service featuring only its own kinds of activities, to offering the Internet as one of the features of membership. That, incidentally, was to the screams of the academic and research community who didn’t want the masses on their Internet, afraid that they would look at pornography, exchange recipes, and of course, none of that ever really happened! And it was also in 1994 that Netscape introduced its first commercial browser, Navigator. Mosaic had been around before, but Navigator really changed the nature of the Internet.

So this is the 10th year that the public’s been using the Internet. And we want to look at these 10 years and identify what we see as some key trends. But before I do that, a word or two about the work I’m doing. When I was in graduate school I was taught that we blew it where television was concerned in the 1940s. Television was the one mass medium everyone knew was going to be a mass medium. There was no question as to whether people would like radio with pictures. Television was going to be popular. We knew that before the first signal aired. And what I was taught -- that we should have done and didn’t do -- is we should have tracked people before they had television and then gone back to them year after year to see how television changed their lives. And if we had done that we could have learned some pretty interesting things: Where did the time for television come from? When Americans were watching three hours of television a day in 1960 and we were asked where’d those three hours come from, we didn’t know. We just sort of glommed them from space. Well, we could have learned if those three hours came from talking as a family, from reading books or newspapers, or listening to the radio, or sleep, or from some other place. We could have learned how television changed our consumer behavior. Did it make us more likely to buy the goods and services we saw advertised? I think you know better than almost anyone, it did. How did it change our connection to the civic process? Did television make us more engaged in politics and likely to participate and vote, or more cynical and detached? And how did it change our desire to travel? And where we wanted to travel to? Who we wanted to be when we grow up … and a thousand other things we could have learned from television. 

And television in America is mostly about leisure and entertainment. The Internet’s about how we work, how we play, how we learn, how we do everything in our lives, and therefore, I think you can easily make the case that long term, the influence of the Internet will be far more significant than television. And therefore, believing that, five years ago we launched the study of the Internet that we think should have been conducted of television in the 1940s. Happily, you are not an academic audience. We don’t have to spend an hour and a half on methodology, although if anyone’s interested I’d be happy to take a methodological question or to meet afterwards and explain how we do this. But essentially what we do, is we track a representative sample of 2,000 people in the United States and go back to the same people year after year, and look at how their lives change, as they move from a non-user to a dial-up user, from a dial-up user to a broadband user. As about three percent drop off the Internet every year, we’re there to see why they dropped off, do they return, and if so, when and why. But beyond looking at everything we can, at their online activity, we also look at how they use media: look at political engagements, social activity, buying behavior -- both online and off. 

And we started this work five years ago in the United States, but we’re now in 23 other countries, with representative samples in each of those countries. And today I’m going to share some new information in the United States. I’ll make a couple of references to other countries, but if someone has a particular interest in one of these countries, I’m happy to answer a question or tell you a little bit about that particular country later. But I will focus primarily on the U.S. today. 

Having said that, in this 10th year of the public Internet, we’ve identified what we see as 10 key trends. And you can look at all 10 of those trends on our Web site. Today I want to take the three trends that are closest to the areas this conference is about and expand on them in a little bit of detail. So let’s start…

First trend we’re going to look at is something that you can’t say any more simply than this: “Broadband changes everything.” First just a statistic about broadband -- right now we’re on the verge of the majority of homes becoming broadband homes. Last year about 46 percent of homes connected through broadband. Right about now we’re crossing the line that the majority of homes connect through broadband.

I actually believe there’s a bigger gap between dial-up use and broadband use than there is between non-use and dial-up use. That’s how significant I think broadband is. Fascinatingly to us, four years ago when we started talking to consumers, we found that 40 percent of those who ordered broadband at home were not aware they were getting an “always-on” or a direct connection. They thought they were just getting a really fast dial-up: You connected the old way and then when you connected it just was really fast. And while they got used to the speed, they bought it for the speed, the speed was addictive and they got used to it immediately. But it was always on, so the direct connection changed their relationship to the Internet far more significantly than the speed did.

We find dial-up to be this disruptive technology. Well, broadband is a very integrative technology. And what I mean by that, when we say that dial-up is disruptive, the average dial-up user is on one, two to three times a day, with exceptions, for 20 to 30 minutes at a time. When they dial-up they usually go into some other part of the house, towards the back, into a den, into a bedroom, into an office. Of course there are exceptions. And generally, dial-up time is time spent away from the family, although they can be around them, and time spent away from television, although the television can be on if people do multitask from the beginning.

Dial-up users view dialing-up as a big deal. They frequently write down on the back of an envelope or a Post-It Note the things they want to do when they log-on. And if they log-off forgetting to do those things, they get irritated at themselves. Even though the act of dialing-up only takes about 30 seconds, they view it as a big deal, or as we in the scientific community call it, a “BFD.”

On the other hand, broadband is a really integrative technology. The average broadband user at home is on 20, 30, 40 times a day, two to three minutes at a time, with lots of exceptions. And, when they go online, it doesn’t displace other activities such as family conversation or television viewing. It occurs in between those activities. It fits into the rhythms of the day. It isn’t as likely to displace anything because they’re only on for two minutes at a time, not 20 or 30 minutes of dial-up. It doesn’t displace family conversation. Conversation occurs around the Internet time on broadband. 

And very importantly, something we began to notice about three years ago is where dial-up tends to displace television programming viewing, broadband displaces television advertising viewing. Where broadband was concerned, the viewers were still watching the program, but less likely to watch the commercial. It became one more thing they could do during the commercial.

And I know this is one of the major themes of this conference. I’ll just add my own two cents to this. I’ve written on this for years. I would argue, as I think you know well, a much bigger impression is made on a lay-audience. But I would argue television advertising has been in trouble for a generation, starting with remote controls, which gave people a way to go somewhere else during the commercial, accelerating with dozens, and now close to hundreds of cable channels, which gives people the somewhere else to go to. It was further endangered by VCRs, which give people the ability to scan through commercials. But our own research shows that only 20 percent of people who ever have owned VCRs have ever recorded on them, so VCRs just have the potential to allow people to skip through advertising, a potential now fully delivered on, as you know well, by PVRs and DVRs and TiVo.

I use the phrase “TiVo” even though I think TiVo will win the battle and lose the war and in 25 years we’re going to call all of our PVRs “TiVo” even though TiVo may be out of business. And the only reason to have a DVR is to record. And I would argue that the Internet is just one more thing that piles up on top of those other things. And I would even argue the Internet is not that significant, as a displacer of television advertising compared to those other things.

We were curious and did our own quick and dirty study, which could be slightly wrong, it’s entirely possible. We wanted to see how many people in our sample actually sit when television commercials come on, and watch them. Those are the people who don’t get up, go to the bathroom, go to the kitchen; who don’t change the channel, go to the Internet, get on the phone -- they sit and watch. And we found -- this may not surprise you -- the figure was 5 percent sit and watch the commercials. More than 5 percent sense the commercials and have some exposure as they’re walking in and out of the room. But only five percent actually sit and actively watch them.

Moving on with beyond broadband -- as people got to like the “always on” of broadband, the fact that it was quicker and easier to go to the Internet than it is to go to the telephone, or it is to go to the newspaper, they began to move the Internet out of the back room, out of the den or the bedroom, and closer to where the family interacts. What we saw three years ago when the Internet was fully wired was they were beginning to move it into the kitchen. The kitchen is the most humanly networked room in the house. It’s the first room you usually enter when you go into the house, the last room you leave before you exit the house. It’s where most people have their answering machines. And as people began to become dependent on the Internet, and the fact that it was always on and they could go to it so consistently, they wanted it where they were, and where they were was in the kitchen. And builders were starting to create pedestals in new inexpensive homes for the Internet. But that began to change with Wi-Fi. 

The only reason most people got Wi-Fi was not to be on a communication network, but to share a broadband connection. Then they discovered the advantage of moving the laptop throughout the home. Wi-Fi lets you move the laptop computer into the bedroom, into the living room, the family room, the backyard, the garage. Interestingly about six months ago, knowing of some of our work with the kitchen, The Wall Street Journal called and wanted to know what our data showed about the use of the Internet in the bathroom. And I must confess, we weren’t asking people about bathroom use. So they went ahead and did their own study, which was really interesting. And it made me think about using the Internet in the bathroom with a Wi-Fi connection. You really can’t use it in the bathtub or the shower. And my first reaction was it was sort of disgusting to be using the Internet while you were sitting on the toilet. And then I realized every hotel I ever stay in, including this one, has a telephone in the bathroom. And it’s actually a little less classy to use the telephone while you’re on the toilet than it is to use the Internet. That’s as far as I want to go with the bathroom…

But interestingly, what The Wall Street Journal found was that about 60 percent of the people who were using the Internet in the bathroom were using it while sitting on the toilet with the lid closed. They were using it as a refuge, as a second office, as a way to get away.

But broadband has made people dependent on the Internet, has made them want it not just everywhere they are in the home, it’s made them want it in their offices, in their pockets, in their cars. It has created this demand that you can just reach for it and it’s there, and it’s why -- one of our other trends I won’t go into detail with today -- it’s why the Internet has become the most important source of information for Internet users, the first place almost everybody goes to for information.

Broadband determines how often people log on the Internet, how long they stay on, what they do online, and where, as I mentioned, they go online from. There’s also a strong correlation between broadband use and purchasing behavior, and overall satisfaction with the Internet. And broadband users are on about 17.3 hours a week versus 10.6 for dial-up users. And broadband users, interestingly, do more of everything on the Internet, with two exceptions.

The first exception is looking at medical information. This was a surprise to us in the beginning. New users to the Internet, one of their heaviest uses is looking at medical information. Almost frantically they look up every question they’ve ever had, things they might not want to ask their parents, or their friends, or their physicians. They look up information on every disease they think they’ve ever had, think they might have, or think they might get. There’s this almost desperate desire for information, which is good to the degree they go to reputable Web sites; frightening to the degree they’re going to chat rooms or other places. But medical information, a very heavy use of new users, and therefore, a much more likely use for dial-up users rather than broadband, because new users are still more likely to be dial-up. 

And distance learning. Many people get their Internet connection only because they’re taking a course and they’re more likely to start with the Internet with dial-up.

And just a couple of other things about broadband -- we find almost all Internet users expect to be on broadband within the next 24 months. Broadband, as I’ve already mentioned, is leading the effort in Wi-Fi broadband users, buying more of all electronics across the board than dial-up users. And early broadband users have been innovators across a wide variety of areas.

Tomorrow: How media usage is changing.