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Page 1: Historical Patterns. S Curve Pattern of Adoption Time

Historical Patterns

Page 2: Historical Patterns. S Curve Pattern of Adoption Time

S Curve Pattern of Adoption

0102030405060708090

100

A B

Time

Page 3: Historical Patterns. S Curve Pattern of Adoption Time

Sources: CAB, SRI & AC Nielsen

1% 2%8%

13%

23%

46%

59%64%

67%

1960 1965 1970 1975 1980 1985 1990 1995 1999

Cable Growth, 1975 - 1999Percent of TV Hshlds Subscribing to Cable

Page 4: Historical Patterns. S Curve Pattern of Adoption Time

Pricing of Telephone ServiceNew York to Chicago - 3 Minute Call(Current Dollars)

$5.45

$3.35

$1.55 $1.30

$0.45

1902 1927 1946 1968 1999

Source: Historical Statistics of the U.S.; FCC

Page 5: Historical Patterns. S Curve Pattern of Adoption Time

Average Price of Selected Electronic Products(Current Dollars)

Year Radio Set B&W TV Color TV VCR CD Player

1925 $ 831930 781935 551940 381945 401947 $ 2791950 1901955 138 $ 5001960 132 3921965 3561970 3171975 341 $ 1,1401980 1,1221983 572 $ 7331985 494 3101987 414 2061989 382 218

Source: EIA; Sterling and Haight: Us Dept. of Commerce

Page 6: Historical Patterns. S Curve Pattern of Adoption Time

Price of Selected Electronic ProductsIn Terms of Weekly Household IncomeNumber Of Weeks Income To Pay For Product

Year Radio Set B&W TV Color TV VCR CD Player

1929 1.8*1947 5.31950 3.31955 1.8* 6.61960 4.11965 3.11970 1.9*1975 6.21980 3.31983 1.4 1.81985 1.1* .71987 .8 .41989 .7 .4

Source: US Department of Commerce

* Year Technology Entered Half of US Households

Page 7: Historical Patterns. S Curve Pattern of Adoption Time

Average Price Of Home Computers 1981 to 1998

0

500

1000

1500

2000

2500

3000

81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98

Dollars

Sources: Dataquest; US Dept of Commerce

Page 8: Historical Patterns. S Curve Pattern of Adoption Time

Number of Years to Reach 50% Penetration of U.S. Households

Sources: Electronic Industry Association; US Dept. of Commerce; Dataquest

Newspapers 100+Telephone 70Phonograph 55Electricity 43 Cable Television 39FM Radio 30Color Television 17Personal Computer 17Compact Disk Player 15VCR 10AM Radio 9Black & White Television 8

Page 9: Historical Patterns. S Curve Pattern of Adoption Time

Percentage of U.S. Households With Telephone Service 1900 - 1998

0

10

20

30

40

50

60

70

80

90

100

'00 '10 '20 '30 '40 '50 '60 '70 '80 '90 '98Source: US Dept. of Commerce

Page 10: Historical Patterns. S Curve Pattern of Adoption Time

Replacement Cycles For Electronic Products

Product Average Life Cycle

Cordless Telephone 10 YearsColor TV 8Camcorder 7CD Player 7VCR 6Personal Computer 6Telephone Answering Machine 5Fax 4

Source: Gannett News Service & Appliance

Page 11: Historical Patterns. S Curve Pattern of Adoption Time

Computer Households With Modems1988 - 1998

0

25

50

75

100

1988 1990 1992 1994 1996 1998

Source: Veronis & Suhler

Percentage of PC Homes With A Modem

Page 12: Historical Patterns. S Curve Pattern of Adoption Time

Average Monthly Cellular Phone Bill1987 - 1998

Source: Cellular Telecom Association

$20

$40

$60

$80

$100

$120

87 88 89 90 91 92 93 94 95 96 97 98

Page 13: Historical Patterns. S Curve Pattern of Adoption Time

Business Vs Personal Cellular Phone Use(Percentage of Bills Paid By Businesses vs Individuals)

0

10

20

30

40

50

60

70

80

90

100

1990 1991 1992 1994 1996 1998

Source: Cellular Telecom Industry Association

Business Use

Personal Use

Page 14: Historical Patterns. S Curve Pattern of Adoption Time

Share of Radio Audience

0102030405060708090

100

1973 1976 1979 1982 1985

Source: Statistical Research

FM Radio

% of Audience

AM Radio

Page 15: Historical Patterns. S Curve Pattern of Adoption Time

Current Media Trends

Page 16: Historical Patterns. S Curve Pattern of Adoption Time

Penetration of Media, 1999 Percentage of U.S. Households With Technology or Service, Jan. 1999

98%

95%

91%

67%

67%

50%

43%

27%

15%

11%

2%

Television

Telephone Service

VCR

Basic Cable

Answering Machine

Home Computer

Cellular Phone

Web Service

Fax

Satellite Dish

DVD

Sources: CEMA; NY Times; Video Business, CTIA

Page 17: Historical Patterns. S Curve Pattern of Adoption Time

Household Spending on Subscription Video Services - Cable, Satellite, MMDS & SMATV, 1988 - 2002 (Actual & Projected)

41.9

34.3

27.121.519.4

12.416.3

50

1988 1990 1992 1994 1996 1998 2000 2002

Source: Veronis, Suhler & Assoc.

$ Billion

Page 18: Historical Patterns. S Curve Pattern of Adoption Time

How U.S. Households Receive TV

Broadcast Only22%

Cable, Satellite or Other78%

Source: SRI; Cable World

Page 19: Historical Patterns. S Curve Pattern of Adoption Time

Network Primetime Audience Share1977 - 1998

40

50

60

70

80

90

100

1977 1980 1983 1986 1989 1992 1995 1998

Source: Veronic, Suhler & Assoc.

Page 20: Historical Patterns. S Curve Pattern of Adoption Time

Broadcast & CableViewing Share and Revenue Share, 1998

Source: Veronis & Suhler

Broadcast TV56.5%

Basic Cable37.2%

Pay Cable6.3%

TV Networks29.2%

TV Stations42.7%

Cable 18.9%

Barter/Syndication4.7%

Total Day Viewing Share Ad Revenue Share

Page 21: Historical Patterns. S Curve Pattern of Adoption Time

Number of TVs In Households

27%

35%

22%

10%

6%

1 2 3 4 5+

Percentage of Households

Source: SRI CONTAM Survey

Number of TVs

Page 22: Historical Patterns. S Curve Pattern of Adoption Time

Number of Household Telephones

20%

36%

24%

10%9%

1 2 3 4 5+

Percentage of Households

Number of TelephonesSource: SRI CONTAM Survey

Page 23: Historical Patterns. S Curve Pattern of Adoption Time

Number of Household PCs

36%

10%

4%

1 2 3+

Percentage of Households

Number of Personal ComputersSource: Cable World Survey

45% of PC owners have a PC and TV in the same room

Page 24: Historical Patterns. S Curve Pattern of Adoption Time

Spending on Technology in U.S. K-12 Public Schools, 1992 - 1999

2.12.5

2.8

3.63.9

4.3

5.25.4*

0

1

2

3

4

5

6

1992 1993 1994 1995 1996 1997 1998 1999

Source: Quality Education Data

$ Billion

* Estimated

Page 25: Historical Patterns. S Curve Pattern of Adoption Time

Internet Trends

Page 26: Historical Patterns. S Curve Pattern of Adoption Time

Number of US Households Subscribing ToAn Online/Internet Service Provider, 1985 - 1998

0

5

10

15

20

25

30

85 86 87 88 89 90 91 92 93 94 95 96 97 98

Source: Veronic & Suhler; Jupiter Communication, Decision Analysts

Millions of Households

Online in 1998: 31% of Adults

27 % of Those Under 18

Page 27: Historical Patterns. S Curve Pattern of Adoption Time

Education Level of Adult Internet Users, 1998

Less than H.S. 18% 4%

H.S. Grad 34 25

Some College 25 31

College Grad 24 39

Gen. Population Internet Users

Source: US Census Bureau; Pew Research Center

Page 28: Historical Patterns. S Curve Pattern of Adoption Time

Percentage of Adults Online By Household Income, 1998

11% 13%

45%

70%

48%49%

32%

0%

20%

40%

60%

80%

>20K 20-29K

30-39K

40-49K

50-74K

75-99K

100K+

Source: Cyberdialogue/Findsvp

Page 29: Historical Patterns. S Curve Pattern of Adoption Time

Percentage of Adults Online By Age, 1998

0%

10%

20%

30%

40%

50%

18-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+

Source: Cyberdialogue/Findsvp

Page 30: Historical Patterns. S Curve Pattern of Adoption Time

Percentage of Adults OnlineBy Ethnic Group, 1998

35%

17%19%

26%

0%

10%

20%

30%

40%

White AfricanAmer.

Hispanic Asian &Other

Source: Cyberdialogue/Findsvp

Page 31: Historical Patterns. S Curve Pattern of Adoption Time

Gender of Internet Users in the U.S.

Female

Male

1994 1998

48%14%

52%86%

Source: GVU; Pew Research Center

Page 32: Historical Patterns. S Curve Pattern of Adoption Time

Top 10 Web SitesMost Frequently Visited Web Sites - January, 1999

Source: Media Metrix

1 Yahoo 2 AOL 3 MSN 4 Go 5 Geocities 6 Netscape 7 Excite 8 Lycos 9 Microsoft10 Tripod

Page 33: Historical Patterns. S Curve Pattern of Adoption Time

Electronic Commerce: Consumer Purchases on the Web

0.7

2.9

8

0

2

4

6

8

10

1996 1997 1998

Billions of Dollars

Source: Forrester Research; WSJ

Page 34: Historical Patterns. S Curve Pattern of Adoption Time

Have You Ever Shopped on the Web?

8%

33%36%

47%

0%

10%

20%

30%

40%

50%

60%

1995 1996 1997 1998Source: International Data Corp.; Cable World

Percentage of Web Users Who Say They Have Made a Purchase on the Web

Page 35: Historical Patterns. S Curve Pattern of Adoption Time

Cost To Deliver a 42-Page Document

Internet 3 cents 3 cents

1st Class Mail $3 $7.40

Fedex $15.50 $26.25

Fax $2.40 $16

New York To: Los Angeles Tokyo

Via....

Source: Interactive Week

Page 36: Historical Patterns. S Curve Pattern of Adoption Time

Cost of Banking Transactions

0.01 0.015

0.27

0.52

1.07

$0.00

$0.40

$0.80

$1.20

Internet PCBanking

ATM Telephone Branch

Cost Per Tranaction

Source: Booz-Allen & Hamilton; US Dept. of Commerce

Page 37: Historical Patterns. S Curve Pattern of Adoption Time

Growth in Web Advertising Revenue

.06

.27

.91

1.8

0

1

2

1995 1996 1997 1998

Source: Internet Advertising Bureau

Billions of Dollars

Page 38: Historical Patterns. S Curve Pattern of Adoption Time

Will People Pay for Content on The Web?

WSJ $29-59 275.000

The Street.com 99 25,000

Slate* 20 23,000

ESPN 29-39 235,000

Playboy Cyber Club 72 30,000

Content Source Cost Per Yr Est. Subcribers - 1998

Source: Crain's NY Business

In 1998, subscription revenue was 2 percent of all Web revenue.

* Abandoned subscription model in 1999

Page 39: Historical Patterns. S Curve Pattern of Adoption Time

International Trends

Page 40: Historical Patterns. S Curve Pattern of Adoption Time

U.S. $28,766 64.4

Germany 28,685 55.0

New Zealand 17,775 40.6

Brazil 4,909 10.7

China 670 5.6

Kenya 291 0.8

Per Capita GDP($US 1996)

Telephone LinesPer 100 Pop. ('97)

Source: ITU

Per Capital GDP & Telephone Lines

Page 41: Historical Patterns. S Curve Pattern of Adoption Time

Households With Telephone Service, 1996

34%

16%

94%

0%

20%

40%

60%

80%

100%

The World DevelopingCountries

DevelopedCountries

Percentage of Households

Source: ITU

Page 42: Historical Patterns. S Curve Pattern of Adoption Time

Countries With The Most Cellular Subscribers Per 100 Population, 1998

1. Finland 50.92. Norway 46.53. Sweden 45.84. Guam 43.05. Hong Kong 39.06. Israel 37.47. Japan* 36.7

*U.S. ranks 14th with 25.0

Source: The Stratigic Group; USA Today

Rank N of Cell Phones Per 100 People

Page 43: Historical Patterns. S Curve Pattern of Adoption Time

France 11% 7%

Germany 53 6

UK 11 19

Poland 23 2

Canada 76 3

Brazil 7 2

Japan 16 20

Cable TV Satellite

Source: The Strategis Group

Cable TVand Direct BroadcastSatellite (DBS) Penetration, 1998

Percent of TV HHs

Page 44: Historical Patterns. S Curve Pattern of Adoption Time

Internet Access in Selected Countries, 1998

Italy 8%

Sweden 25

Hungary 8

Canada 42

Mexico 1

Argentina 2

Japan 14

Australia 11

Source: The Strategis Group

Percentage of Households

Page 45: Historical Patterns. S Curve Pattern of Adoption Time

Internet Content Worldwide: Language and Source, 1998

Language of Web Sites Source of Web Sites

Other Languages15%

English85%

U.S.80%

Other Countries20%

Source: Fortune

Page 46: Historical Patterns. S Curve Pattern of Adoption Time

Projected Distribution of World Online Households By Region, 2000

North America57%

38.2 Million HHsEurope

25%16.5 Million HHs

Asia/Pacific Rim15%

10 Million HHs

Other Regions3%

1.9 Million HHs

Source: Jupiter Communications/Multichannel News

Page 47: Historical Patterns. S Curve Pattern of Adoption Time

Spotlight on China: Technology & Media Usage, 1998

Technology in Households

TV 25%

Telephone Line 3

Personal Computer 1-2

Credit Cards 1-2

Internet <1

China

Population 1.2 Billion

Rural 70%Urban 30%

Source: Grey Advertising; The Industry Standard

Page 48: Historical Patterns. S Curve Pattern of Adoption Time

Spotlight on China: Technology & Media Usage, 1998...continued

Technology Use By Households In Four Cities*

Source: Grey Advertising; The Industry Standard

Pagers 62%Cell Phone 32Personal Computer 16DVD 3

* Beijing, Shanghai, Guangzhou, & Chengdu

Growth of Web Users

Users

1997 670,0001998 1,200,000

Page 49: Historical Patterns. S Curve Pattern of Adoption Time

Social Trends That Affect Media Usage

& Impacts of Media

on Social Life

Page 50: Historical Patterns. S Curve Pattern of Adoption Time

Growth of ATM Machines in the U.S. 1972-1998

Sources: The Nielson Report, Diebold

72 74 76 78 80 82 84 86 88 90 92 95 97 98

190,000

Page 51: Historical Patterns. S Curve Pattern of Adoption Time

Growth in Remote Control PenetrationPercentage of TV Households With Remotes

0

20

40

60

80

100

1982 1984 1986 1988 1990 1992 1994 1996 1998

Sources: EIA, SRI; Video Business

Page 52: Historical Patterns. S Curve Pattern of Adoption Time

Two-Income Households: Percentage Of Married Couples With Both Spouses Working

22%

29%

39%

47%52%

62%

1950 1960 1970 1980 1990 1997

Source: U.S. Department of Labor

Page 53: Historical Patterns. S Curve Pattern of Adoption Time

Pressed For Time: Percentage of People Who Feel Rushed And Have No Spare Time

30%

33%

42%

41%

45%

35%

All Men

All Women

Men 35-44

Women 35-40

Men Working 40+ Hours

Women Working 40+ Hours

Source: Maryland Univ. Time Use Project

Page 54: Historical Patterns. S Curve Pattern of Adoption Time

Home Offices in the U.S. 1988 - 1998

20.6

26.6

31.734.8

39

52.1

1988 1990 1992 1994 1996 1998

Sources: IDC/Link, Find/SVP

Millions of Households

Page 55: Historical Patterns. S Curve Pattern of Adoption Time

TelecommutersPeople Who Work Part Time or Full Time At Home

2.4

4.6

8.39.1

8.18.7 9

11.1

1988 1990 1992 1994 1995 1996 1997 1998

Millions of Workers

Sources: USA Today/Link; Find/SVP

Page 56: Historical Patterns. S Curve Pattern of Adoption Time

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

0

5

10

15

20

25

1975 1980 1985 1990 1995 1997

Source: U.S. Department of Labor

Page 57: Historical Patterns. S Curve Pattern of Adoption Time

Press Stories About The Internet And PrivacySelected Newspapers, Magazines & TV News Sources, 1990 - 1997

0

200

400

600

800

90 91 92 93 94 95 96 97

Source: Greystone Communications

Page 58: Historical Patterns. S Curve Pattern of Adoption Time

Privacy Concerns: Percentage of People Who Say They Are Concerned About Privacy

34%

47%

64%

77% 79% 78%84% 84%

1970 1977 1978 1983 1990 1992 1994 1996

Source: Louis Harris Assoc../SNET/Equifax

Page 59: Historical Patterns. S Curve Pattern of Adoption Time

Percentage of U.S. Population 65 or Older: Actual and Projected

4%

20%

16%

13%13%11%

8%

0%

5%

10%

15%

20%

1900 1950 1980 2000 2010 2020 2030

Source: US Census Bureau

Page 60: Historical Patterns. S Curve Pattern of Adoption Time

Average Household Size

2.62.62.52.63.33.4

4.14.5

4.8

5.8 5.6

3.12.8

Sources: Historical Statistics of the US; American Demographics

Page 61: Historical Patterns. S Curve Pattern of Adoption Time

Skepticism" We are in a great haste to construct a magnetic telegraph from Main to Texas, but Maine and Texas, it may be, have nothing important to communicate."

Henry David Thoreau, 1849

Page 62: Historical Patterns. S Curve Pattern of Adoption Time

Hype and Stock Speculation

0

5

10

15

20

25

30

35

Jan Mar May July Sep Nov Jan

IPO... Anglo -American Brush Electric Lighting Corp., 1882

Source: The Economist

Page 63: Historical Patterns. S Curve Pattern of Adoption Time

Hype and Stock Speculation

0

5

10

15

20

25

30

35

Jan Mar May July Sep Nov Jan

IPO of Anglo -American Brush Electric Lighting Corp., 1882

1882 1883Source: The Economist

Page 64: Historical Patterns. S Curve Pattern of Adoption Time

Serendipity

Two U.S. companies rent audio-books on tape to truck drivers at truck stopson the East coast. Drivers rent at one stop and return the tapes further up the road.

-- The New York Times, 12/26/98

Page 65: Historical Patterns. S Curve Pattern of Adoption Time

Communications Sector of U.S. Economy

267

61

291

76

322

94

357

106

395

120

$0

$100

$200

$300

$400

$500

$600

1994 1995 1996 1997 1998

Total Revenues in Billions

Source: Census Bureau; 1998 Telecom Market Review

Communication Services Communication Equipment

Page 66: Historical Patterns. S Curve Pattern of Adoption Time

Information Technology: Share of U.S. Economy

4.2 4.54.9

6.1 6.4

8.2

0

1

2

3

4

5

6

7

8

9

1977 1980 1985 1990 1993 1998

% of GDP

Source: US Dept. of Commerce

Page 67: Historical Patterns. S Curve Pattern of Adoption Time

U.S. Industries Ranked By 5-Yr Growth 1992-1997

US Industry Rank CompoundAnnual Growth

Telecommunication Services 1 9.4%Electronic Equipment & Services 2 8.4Educational Services 3 7.8Communications Media 4 7.2Motor Vehicles & Parts 5 7.0Insurance 6 6.9Health & Medical Services 7 6.3

Source: Verronis & Suhler; US Dept. of Commerce

Page 68: Historical Patterns. S Curve Pattern of Adoption Time

US Labor Force, 1900 - 2000Percentage of All Workers in Each Job Category

0%

20%

40%

60%

80%

100%

1900 1970 1980 1990 2000

Source: US Dept. of Commerce

Agriculture Industrial Services

Page 69: Historical Patterns. S Curve Pattern of Adoption Time

How Companies Train Workers

Classroom Instruction

1997 2000

Electronic/ Web

Other

1997 Corporate Training = $61 BillionSource: Am. Society for Training