Deloitte Digital Index: July 2008 update |
| Apr 2008 | Jul 2008 | ||
| Telecoms | Fixed broadband (h) | 59% | 61% |
| Total mobile (p) | 84% | 84% | |
| Consumer Voice over IP (VoIP) (p) | 1.7% | 2% | |
| Mobile internet (p) | 22% | 22% | |
| Technology | PC (h) | 76% | 76% |
| Digital video recorder (h) | 26% | 28% | |
| DVD player (h) | 64% | 64% | |
| MP3 player (p) | 46% | 47% | |
| Media | DAB radio (h) | 22% | 23% |
| Digital TV (h) | 89% | 90% | |
| Online video (h) | 19% | 23% | |
| Mobile TV (p) | 1% | 1% |
Key:
(h) = penetration of UK households
(p) = penetration of UK population
Commentary
In July’s update to the Deloitte Digital Index, adoption for six digital products and services rose. The remainder were unchanged.
The six rising indicators were: Digital Video Recorders, Digital Radio, Digital Television, Online video, Fixed Broadband and Consumer Voice over IP.
The digital service that enjoyed the biggest rise in usage was online video, for which content remains the principal major driver of adoption. Online video, in the UK and in the rest of the world, appears to be enjoying a virtuous circle: more content appears to be rewarded by increased demand. Both clip-based and programme-based online video sites have experienced strong growth. The BBC’s iPlayer received 100 million requests within its first six months of operation, ITV’s video content saw a 1,102 per cent rise in downloads in the year to May 2008. And overall for the UK, there are approaching 4 billion video downloads per month.
However, as a proportion of all video watched, broadcast television still dominates: the average viewer in the UK consumes 3.6 hours of television per day. This compares to a few minutes per day for all forms of online video.
Consumer VoIP experienced a large percentage rise in adoption, but this was from a low base. Overall adoption of Consumer VoIP remains minimal, at just 2 percent. Economic downturn may however encourage usage of VoIP, if consumers believe the savings attainable from using VoIP merit the set-up costs or inconvenience relative to standard telephony.
The penetration rate of digital video recorders in UK households is rising steadily, up by two percentage points, helped by the DVR’s potential role in client acquisition and retention, and, also the falling price of hard disk drives. The DVR should continue growing strongly through the end of 2008.
DAB radio however, while rising moderately over the last quarter, may see adoption rates slowing down over the remainder of 2008. DAB radio sets have been a popular purchase over the last few years, but DAB’s lack of exclusive content may cause some potential buyers to stick with their existing analogue radios if wallets are feeling the pinch. For DAB to enjoy major success this Christmas, the average price point may have to drop in sympathy with UK households’ new-found frugality.
Amongst the indicators that registered no change, Deloitte expects the penetration rate for PCs and DVD players to remain constant for the remainder of the year. Lack of perceived need and economic downturn are expected to constrain any rise in penetration for PCs; everyone who wants to own a DVD player appears to have one – or even several. Yet as PCs and DVDs are almost always owned, rather than rented, ownership is unlikely to decline.
While no indicators recorded a fall, the outlook for mobile television, the indicator with one of the lowest adoption rates, deteriorated over the quarter. Several countries that had been among the early proponents of mobile television, including Italy and Korea, saw several operators moving to a free model, suggesting that the model for paid-for mobile television may not work in every market. As of July 2008, Deloitte’s view was that mobile television was heading towards half a per cent. Other research undertaken by Deloitte indicated that the television industry was losing faith in the medium.
Download a printable copy of the July update (PDF, 75KB)
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Digital Index: July 2008
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