Crunching Numbers

 
 
By Tom Steinert-Threlkeld  |  Posted 2001-03-05 Email Print this article Print
 
 
 
 
 
 
 

The headline on the news release blared the good news: "Broadband Access Soars Nearly 150 Percent At Home, According to Nielsen//NetRatings."

The headline on the news release blared the good news: "Broadband Access Soars Nearly 150 Percent At Home, According to Nielsen//NetRatings."

Pretty remarkable. The statistic seemed to scream that broadband use of the Internet was taking over digital communications. But the real screaming should be over the reality that was masked by the focus on the growth rate, rather than the actual growth.

Sure, at the end of 2000, there were five people accessing the Net through cable modems, digital phone lines and local area networks for every two that were doing so at the end of 1999.

But the actual numbers arent that overwhelming. In December 1999, just 4.7 million people were using some high-speed method of accessing the Internet at home. In December 2000, that number went to 11.7 million.

Now, you might see some real mass in the not-too- distant future: If somehow the 148 percent annual growth rate actually holds up for another two years, there would be 71.4 million people accessing the Net by some broadband means. Thats a real market.

But the headline for 2000 should have focused on dial-up access. Specifically, the 56-kilobit-per-second modem. In one year, the number of users dialing into the Net at that ostensible rate grew from 30.9 million to 57.9 million.

Of course, thats only 87.3 percent growth. But just the new users accessing the Net with 56-Kbps modems in 2000 — 27 million — is still more than twice the total number of users doing so via broadband connections.

Right now, high-speed access means 56,000 bits of data per second, not 1.5 million. It still means more like 28,000, 38,000 or maybe 48,000, given the wide variance in actual live performance of 56-Kbps modems.

Statistics often seem at war with themselves. Much has been made of another set of figures from Nielsen//NetRatings that showed Web users might be getting bored with the Internet. The average time spent online (at least in the U.S.) fell from 17.5 hours per month to 14.9 hours per month, from October to December. The number of online sessions per month fell from 33 to 28; and the number of sites visited from 20 to 17.

But its not as if the Internet is a flash in the pan. The number of people accessing the Internet, overall, is still growing. And at a pace that other media would envy.

Once again, its Nielsen//NetRatings jousting with itself. In its latest ratings report, the audience measurement service found the number of Internet users grew from 155.9 million in October to 164.5 million in December; and, 168.8 million in January. Even after almost seven years of growth, roughly 4 million newbies are joining the legions of Internet users — every month. All told, 60 percent of the U.S. population is now hooking into the Net, either from work or home.

Much also has been made of the popularity of cell phones in Scandinavia, particularly Finland. How startling to think that Finns use cell phones to pay for beverages at vending machines, or as always-available receptacles for downloading the latest releases by popular recording artists.

You start to think about what you are missing, as the rest of the world seems to leap past the desktop Web and right into the handheld version. But, statistically speaking, dont be fooled. An Accenture survey last month found that only 15 percent of consumers in Finland, Germany, Japan, the U.K. and the U.S. who owned a cell phone or wireless device were using it to connect to the Internet. And less than one percent used their mobile devices to buy something online. So much for mobile commerce.

The big anomaly is Japan, where more than 70 percent of cell users access the Net via their phones. But theres a simpler equation. Sending a 50-character message to a friend costs just one yen. A one-minute phone call costs 20 yen.

Those are the kind of numbers that produce incontrovertible results, in any market.

 
 
 
 
Editor-in-Chief
tst@ziffdavisenterprise.com
Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.
 
 
 
 
 
 
 

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