Adoption of New Media Supplementary Material for Chapter 1 in When Media Are New Copyright 2010, John Carey and Martin C.J. Elton

Average Annual U.S. Household Expenses Selected Expenditures Type of ExpenseAverage Annual Spending ($) Food at Home3,465 Health Care2,853 Entertainment2,698 Food Away From Home2,668 Gasoline and Motor Oil2,384 Utilities (gas, electricity, water)2,217 Clothing1,881 Telephone1,110 Source: US Dept of Commerce, Statistical Abstract of the US, 2010 (data are projections for 2010)

Television $ 407 1,607 Home Video Consumer Books Videogames75125 Internet Content67*197 Recorded Music43184 Newspapers44155 Magazines44124 Movie Attendance39 12 Mobile Phone Content 27 NA Media Spending and Hours of Use Consumer Spending Hours of Use Per Person Per Year Source: US Dept of Commerce, Statistical Abstract of the U.S (data are projections for 2010) * Does not include video

Historical Patterns

Rogers’ Categorization of Adopters Source: Rogers Innovators Early Adopters Early Majority Late Majority Laggards

Average Price of Selected Electronic Products RadioB&W TVColor TVVCRCDDVD 1925$ $ $ $ 1, , $ $ Source: Sterling and Haight; Carey, EIA. In Current Dollars

Average Price of Selected Electronic Products RadioB&W TVColor TVVCRCDDVD * * * * * * in Weekly Household Income *The point at which each of these technologies entered half of US households Note: successive rows do not advance by a constant number of years

Average Price Of Fax Machines Dollars Sources: Dataquest; US Dept of Commerce; CEA $185 $4,429

Average Price Of Home Computers Dollars Sources: Dataquest; US Dept of Commerce

Pricing of Telephone Service New York to Chicago - 3 Minute Call (Current Dollars) Source: Historical Statistics of the U.S.; FCC

Price Dropped Over TimePrice Did Not Drop Over Time Long Distance TelephoneCable TV Dial-Up OnlineSatellite TV Broadband DSLSatellite Radio Mobile Phone ServiceVideo-on-Demand DVR Service Services Where The Price Dropped or Did Not Drop Over Time

S-Curve Pattern of Adoption Time

Sources: Sterling and Haight; US Dept of Commerce; Cable Growth, 1950 – 2005 Percent of TV Households Subscribing to Cable Year

Enhancements vs New Services

APPLICATION OR EXPERIENCE TECHNOLOGY IN HOME OR OFFICE Already In PlaceNew Enhanced Software UpdateColor TV Touchtone Telephone New Automated Voice Services Streaming Audio/Video on Web Videotex* Interactive TV Pre-recorded Videocassettes New/Existing Technologies for New/Enhanced Applications * Videotex is a generic term for an important family of online services before the Web.

Replacement Cycles For Electronic Products Product Average Life Cycle Cordless Telephone 8 Years Color TV 8 DVD Player 7 CD Player 6 Telephone Answering Machine 6 Camcorder 5 Fax 4 Digital Camera 3 Personal Computer 2 Mobile Phone 1 Source: Appliance Magazine

Number of Years to Reach 50% Penetration of U.S. Households Source: Sterling and Haight; US Dept. of Commerce Newspapers100+ Telephone 70 Phonograph 55 Cable Television 39 FM Radio 30 Color Television 17 Personal Computer 17 Cell Phone 16 VCR 10 CD Player 10 AM Radio 9 Black & White Television 8 DVD 6

Advantages and Pitfalls of Being First

“First In” Strategy...  AM Radio  HBO  Broadcast Networks

But…  HDTV in Japan  Early Videoconferencing  1950s Pay TV (Zenith)  Early DBS

Killers Apps versus Confluence

Share of Radio Audience Source: Statistical Research Inc. FM Radio % of Audience AM Radio

Technology Push versus User Demand

Transitions As Standards Change Shipment of Recorded Media LPs Cassettes CDs Millions of Units Source: Recording Industry Association Download Single Mobile Song Download Album

Demographics and Adoption

U. S. Population Millions Source: U.S. Census Bureau

Mobility : Percentage of U.S. Households That Move Each Year Source: U.S. Department of Labor

Average Household Size Sources: Historical Statistics of the US; American Demographics

Percentage of U.S. Population 65 or Older: Actual and Projected Source: US Census Bureau

U.S. Population – Languages Spoken People who speak a language other than English at home English Only 80% Other Language 20% Source: U. S. Census Bureau

Other Patterns….. Failures Fads Cyclical Technologies Replacement Piggybacking False Starts

VCR Market Share VHSBeta Source: Klopfenstein

Desktop vs. Laptop Computer Sales Desktop Laptop Source: Appliance Magazine

Obsolescence

Sales of VCR Decks Thousands of Units Source: Appliance

Product Development Mortality “Of the 30,000 new consumer products launched each year, over 90% of them fail.” The Wall Street Journal

Subsidies – When First Launched PS3 MSRPSony Cost to Build Subsidy by Sony $499$806$307 Xbox ’05 MSRPMicrosoft Cost to Build Subsidy by Microsoft $399$525$126 Source: Financial Times

Videogame Console Hardware & Software Sales, 1980 to 2009 Source: NPD Group, cited in the NY Times, WSJ and Video Business Billions of Dollars

Trojan Horse Strategy