European Consumers Value Media at About €2,100 per Year, of which €1,077 Comes from Online Media
London, —Media are migrating online at a rapid rate, and economic value is following, according to a new study by The Boston Consulting Group (BCG). European consumers value online media at €1,077 per year over and above what they pay for it, or approximately half the €2,078 online and offline total for each connected consumer.
Across the nine European countries covered by the new BCG report, Follow the Surplus: European Consumers Embrace Online Media, the online net value, or “consumer surplus,” ranged from €792 to €1,557. European consumers derive the biggest online surplus (about 30 percent of online total) from user-generated content and social networks, but traditional media categories are catching up fast. The report is based on surveys of some 7,000 consumers.
BCG calculates the consumer surplus—defined as the value consumers themselves place on an activity or product over and above what they pay for it—for seven major categories of media: books, local newspapers and magazines, international newspapers and magazines, TV programs and movies, radio and music, games, and user-generated content and social media.
“Based on the richness of the media content available across Europe, we expected to find a large consumer surplus,” said Paul Zwillenberg, a BCG partner and coauthor of the report. “But what’s notable, given the relative youth of the Internet, is that the surplus from online media has surpassed, or nearly caught up with that of offline media in every country surveyed. Economic value is following media online.”
By wide margins (with majorities from 65 to 78 percent, depending on the country), European consumers believe they have access to higher-quality online content than they did three years ago. Most Europeans (from 55 to 72 percent) expect continued improvement in online media. Strong majorities in virtually all countries (as high as 75 percent) are more excited about the benefits of the Internet than worried about the risks.
Based on its research, BCG believes that the key factors are in place to accelerate online consumption across Europe. One such factor is rising device ownership. Throughout Europe, consumers using three or more devices enjoy higher online media consumer surplus—an average of about 50 percent higher—than those with fewer devices. Europeans owned an average of 1.4 devices three years ago; today they own 2.6. They expect to own 4 devices in three years’ time.
Another key factor is the increasing penetration of fast mobile broadband. This facilitates the availability of more high-quality digital content, for which there is significant demand.
“The Internet is giving consumers more access to a wider variety of high-quality content,” said Simon Morrison, public policy manager at Google, which commissioned the report from BCG. “Europeans are already realizing significant value online from everything from news to games to social interaction, and this value will only increase as high-speed access grows and more content becomes available.”
The nine countries covered by the BCG survey were chosen because they broadly represent the makeup of Europe today, span various stages of economic development and online maturity, and embody very different attitudes toward the Internet. They are the large economies of France, Germany, Italy, and the U.K.; smaller to medium-sized countries (Ireland, the Netherlands, Sweden); and more recent EU members, Czech Republic and Poland.
A copy of the report can be downloaded at www.bcgperspectives.com.
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About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 78 offices in 43 countries.
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