Understanding Multimedia Adoption Trends

In keeping with my recent series of posts about trends in the current Internet space and the need for entrepreneurs and investors to better understand the world outside the tech bubble, I thought it might be helpful to examine multimedia technology adoption and penetration trends.

I compiled the chart below from data available on the US Census Bureau's web site. 

I see several interesting things in this chart.  First, it demonstrates that cable TV adoption  seems to be leveling off at around 70 percent.  In fact, over the past 15 years, there has only been about a 10 point increase in the total percentage of households with cable.

This is interesting for several reasons, not the least of which is the fact that it suggests to me that this may well be the point at which broadband could begin to level off.  There are similarities between the two technologies in that they are infrastructure-oriented and would seemingly appeal to a similar set of consumers.  Now, wireless broadband could help to overcome some of the current constraints on cable TV penetration and permit more rural consumers to access broadband Internet services, but I think this remains an open question.

It is also interesting to note that VCR adoption took off much faster and has achieved much greater ubiquity than cable TV.  Part of this is likely the lack of availability of cable services in some areas, as well as the fact that it represents a monthly cost to the consumer whereas a VCR is (at least in its purest form) a one-time expenditure.

But one should not overlook the fact that in 1984, about the same percentage of households had VCRs and personal computers (10.7 and 8.2 percent respectively).  But where VCR adoption took off, PC adoption has grown at a much slower pace.  Obviously it is a more complicated and expensive technology, but the trend is nevertheless worth considering.

The latest numbers also suggest that most folks who have a computer also have Internet access.  But only about a third of computer owners have broadband today.  While that number will certainly grow and numerous studies have estimates as to how quickly it will do so, this is an important cautionary note to startups focused on broadband-intensive applications.  The fact of the matter is that a significant number of consumers still have slower Internet access at home and they must not be overlooked in a mass-market applicaiton.  But to all of the entrepeneurs and developers and designers out there: when was the last time you used dial-up access? (Apologies to VC Matt Rightmire of Borealis Ventures whom I interviewed recently and discovered he has no broadband at his home.) We all must work to put ourselves better in the shoes of consumers to be certain we're delivering the best products possible.

Obviously, those who focus more on B-to-B solutions are likely to have fewer issues with dial-up access by customers, but consumer-oriented businesses cannot overlook these stark statistics.

None of this is meant to put a damper on the spirit of web-based entrepreneurs.  That is, of course, the very space I live and breathe every day.  But examining the reality of existing trends will help all of us to build stronger companies based on a better understanding of the broader marketplace.

Comments

[Brian]

Interesting perspective on things. Its always wise to remind oneself to make a service that works best for the "least common denominators" of broadband usage.

However, the possibilities of WiFi and more so WiMAX could change the broadband market place faster than expected. Its not unrealistic to think that "last mile" customers could easily have broadband connections in 2-3 years.