Tuesday, 26 February 2013

Does faster broadband encourage usage? Not so much

If faster broadband speeds enabled a cornucopia of marvellous services, we might expect countries with higher speed to spend more time online. However, the data from Europe doesn't show that picture:

Source: Akamai (Q3 2012) and Comscore (Dec 2012). Free registration required

As you can see, there's not much of a pattern (R2 of 0.04, with a negative slope). In other words, there's no evidence here that, as between European countries, higher speeds are leading to greater use of the internet.

Of course one might argue that the ability to get things done quicker means that people with higher speeds spend less time online, but this certainly hasn't been the historic outcome - in the UK in 2006, broadband users were spending 60% more time online that dial-up users, for example.

I don't want to overstate my case here - there's lots of factors that drive hours spent online, and it may be that some combination of these represent so much 'noise' that they are masking a positive impact from higher broadband speeds. However, that in itself is interesting - it suggests that even if higher broadband is important, it is readily swamped by these other factors.

The above finding regarding time online is also consistent with evidence that broadband speed makes no detectable difference to the economic impact of the internet across a range of European countries. (See p4 of this)

Friday, 22 February 2013

The scale of the Facebook time sink

Nielsen has some figures on US usage of social media, looking in detail at July 2012. In that month, US consumers spent a little over 93bn minutes, or 1.5bn hours on Facebook, of which 1/3 was via a mobile device.

The US population aged 13 and over (Facebook's minimum) is roughly 252m, so this usage works out at 6.2 hours per month for every single American adult and teenager. The figure would of course be even higher for Facebook users in that group.

Another way to look at this is to compare to the working hours of the American labour force - 142m people in July. This includes part-timers and those working long hours, but to keep things simple, let's assume a 40 hour work week. This means the US economy has monthly working hours of 23bn, and monthly US Facebook usage is equivalent to 7% of this figure.

I am not suggesting that this 7% substitutes for working hours, though certainly some does. And some of it likely substitutes for study time. The sheer scale of Facebook usage means it must be substituting for a whole range of activities, be they productive or purely pleasurable.

Something to put on the balance sheet the next time you're being told about the (real) positive economic impacts of the internet.