Digital Insights Report 2016 Contents
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Virgin Media Digital Insights Report 2016 Contents 2 Executive Summary 5 Introduction 6 Digital Economy 10 Digital Lives 14 Digital Media I’m delighted to share with you this third report from our “ unique research which tracks the uptake and impact of digital technology in Ireland since 2012. The findings underline the many benefits of high speed broadband as an enabler of life and living in a rapidly moving society and economy. The report highlights significant opportunities and some challenges for people and businesses everywhere as we continue towards an increasingly connected future. Tony Hanway, CEO, “ Virgin Media 1 Introduction Executive Summary We’re at a fascinating juncture in Ireland’s Digital Lives Overall conclusions journey to the digital future where digital technologies are having a pervasive The report reveals that consumers are still Growth in the digital economy continues impact on almost every aspect of our lives. adjusting to both the positive and to outpace that of the overall economy sometimes not so positive effects of while digital technologies are having an The monetary value we place on our digital technologies on their personal increasingly widespread effect on our broadband connections has tripled since lives. Promoters of digital working and personal lives. 2014 – the average consumer would now solutions will in future need to focus on the demand compensation of €390 per month emotional and relational impact of those There will be winners and losers if their broadband service was removed. solutions on their customers’ lives – creating in the digital future. The goal of an overall wellbeing effect will be important all stakeholders should be to This report focuses on three aspects of that for the future. ensure that citizens journey: the Digital Economy; Digital Lives; and consumers are among the and Digital Media. You can see more winners and that the economic detailed information online at growth necessary to underpin Virginmedia.ie/Insights sustainable national progress is achieved. Digital Economy In value terms, the digital economy is now worth about 6% of Ireland’s GDP and every indication is that its growth will continue to outpace total GDP growth over the rest of the decade. Some 94% of Irish internet users now shop online with average adult online spending per month rising by 13% since 2014, from Digital Media €71 to €80 per month per person. Overall Digital media is changing the relationship consumer spending grew by just 9% over the between consumers and media, in how same period. they select their news and information and form opinions. This study provides strong The share of Irish consumer spending evidence that consumers want more accounted for by the digital economy is control over their use of and exposure expected to grow from 7.7% in 2016 to 12.4% to media. by 2021. This means that media owners and We predict that the value of online advertisers must continue to provide more spending will almost double between now choice to consumers while persuading them and 2021, rising from an estimated €7.5bn to remain open to receiving their messages. to €14.1bn. Unfortunately, about 60% of Irish online shopping still goes abroad. 2 3 Introduction As a nation, Ireland is at a critical juncture We hope you find the Virgin Media Digital in its digital development. We already Insights report helpful and informative as enjoy many of the benefits of a digital we continue our shared journey towards economy and society with the vast majority Ireland’s digital future. of consumers utilising advanced digital technologies and services in their daily lives at home and at work. But our digital journey Methodology is just beginning when it comes to realising the full potential for economic growth, job This study was commissioned by Virgin creation and higher standards of living. Media Ireland. As in the previous studies carried out in this series in 2012 and 2014, Compensation required every month if a Amárach conducted an online survey of consumer's broadband was ‘removed’: a representative sample of 1,000 adults throughout the Republic of Ireland exploring their experiences, behaviours and intentions 2014 = €130 in relation to the digital future. This latest survey, allows us to make direct 2016 = €390 comparisons with previous studies, as well as to look in detail at the different The report also highlights changes from experiences and attitudes of various previous studies in this series¹, giving an age groups, social classes and regions indication of just how far we have come in throughout Ireland. terms of our digital development. The report also highlights in stark terms our increased level of digital dependence – the degree to which we have become dependent on digital technologies in our everyday lives. One simple measure of this dependence is the ‘consumer surplus’ – the amount of compensation an average consumer would want if their broadband service was cut off. That is the difference between the monetary value we place on our broadband connections and what we actually pay for them. In 2014 this difference or ‘surplus’ stood at €130 per month; now just two years later it has tripled to €390. This offers proof, if any were needed, of the extraordinary speed at which we have adopted, and adapted to, digital technologies. 1 See: The UPC Report on Ireland’s Digital Future 2012 & The Second UPC Report on Ireland’s Digital Future 2014 4 5 The Digital Economy opportunities as well as posing substantial What is it? challenges in the years and decades ahead. Ireland’s economic growth has been among All available medium and long term the fastest in Europe in recent years.² But forecasts for the digital economy at a global the Digital this wasn’t always the case. When we level and for Ireland point to strong and started this series back in 2012 Ireland’s Economy is now sustained growth in both its value and the economic recovery was fragile and patchy number of jobs reliant on it.⁴ worth about 6% at best. of Ireland’s GDP Ambitious companies and start-ups will However, one part of the Irish economy has find their prospects for success and growth consistently flourished and is set to continue enhanced as a result of the availability of growing at a faster rate than the rest. This is digital channels as a platform for selling the element known as the digital economy. goods and services. The digital economy comprises those But success will require a deep products and services which are purchased understanding of the needs, wants and online, the businesses and employees who preferences of online customers who for the deliver them, as well as those aspects of most part will be consumers but could also wider business activity and government be other businesses, at home or abroad. spending conducted over the internet. The Virgin Media Digital Insights Report Our 2014 report predicted strong growth for offers just such insights for ambitious Irish the digital economy and recent estimates³ entrepreneurs, business leaders and policy valued it at €12.3 billion in 2015 which was makers. broadly in line with our 2014 forecast. In value terms, the digital economy is now worth about 6% of Ireland’s GDP and every indication is that its growth will continue to outpace total GDP growth over the rest of the decade. Why does it matter? The digital economy has proven to be remarkably resistant to the economic volatility experienced in recent years and it accounts for an increasing share of consumer spending and business activity. For businesses and government, the growth in the digital economy will create new 2 Eurostat: http://ec.europa.eu/eurostat/web/national-accounts/statistics-illustrated 3 Assessment of the Macro-Eonomic Impact of Internet Digital on the Irish Economy, Indecon report for Department of Communications, Energy and Natural Resources, March 2016 4 See, for example, Ovum forecast for 2025: http://www.ovum.com/press_releases/road-to-2025-digital- economy-to-hit-4-8trillion-during- 6 second-digital-revolution-analysts-predict/ 7 Top four most frequently used apps or What do we functions on smartphone: know? almost unchanged from the 2014 survey – rising Texting 58% just 1% to 41%. A lot of online shopping is still Talking 50% going abroad. Our study illustrates how quickly the Irish Facebook 46% % using internet to economy is changing and how rapidly Whatsapp 42% interact with Government There has been a notable shift in the reasons consumer demand is shifting towards digital Departments or public for buying online rather than in a store, platforms. Another highly significant component of the authorities in the past 12 however. digital economy is Government services. Nearly months: For example, the average adult online spend half – 45% – of Irish adults have interacted with per month has risen by 13% over the 2014 a Government Department or public authority level. That’s considerably ahead of the overall in the past 12 months and the overwhelming Revenue Online 87% 9% growth in total consumer spending over the Reasons to purchase a 2014 2016 majority of internet users have chosen digital System (ROS) same period. product or service online channels for that interaction. Car tax 83% rather than in a store: 2014 2016 Property tax 82% The product is not 41% 53% There is also a clear appetite for even available in local shops greater use of online and digital channels for Water charge 67% €71 €80 this purpose. Some 62% of those who have per person per person Income tax 61% I can get it online at 59% 72% interacted with them in the past 12 months per month per month a lower price agree that Government Departments and While rising incomes and improved connectivity More convenient to 55% 48% authorities could make better use of the are undoubtedly playing a role in this trend it’s purchase online internet and other digital tools to deliver clear that it is also driven by online spending services to citizens.