The Internet Value Chain

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THE INTERNET VALUE CHAIN

Internet value chain

The shift to online

As we consider the competitive health of the internet

value chain, we should recognise that it competes to

some extent with legacy products and services. It is

clearly winning this competition on almost all fronts (see

figure 2). Taking the United States as an example, in 2012

the average American spent 12.4 hours each day online

or consuming media (which includes duplicated

consumption, for example listening to the radio while

reading a newspaper). Of this time 251 minutes were

spent on the internet. By 2015 this figure had reached

329 minutes, and by 2017 it is expected to increase

further to 356 minutes. In other words, over this

five-year period people will have spent an extra 105

minutes of their day online—partly at the expense of

traditional media.

Figure 2

Internet usage in the United States

Time spent online and on offline media

Average hours per day per person

Time spent online

Average hours per day per person

12.4

6%

17%

44%

12.8 12.9 12.9 13.0 13.0 4.2 4.8 5.2 5.5 5.8 5.9

6% 5% 5% 4% 4%

37% 39% 38% 35% 33% 31%

16% 15% 15% 14% 14%

41%

40% 39% 38% 37%

2012-2017f

Minutes

+19

24%

20% 18%

18%

19%

20%

+11

34%

37%

40% 42%

44% 46%

13%

12%

15%

13%

12% 12%

16% 16% 16%

12%

13% 13%

+25

+14

14%

16% 17%

19% 20% 20%

+37

2012 2013 2014 2015 2016f 2017f

2012 2013 2014 2015

2016f

2017f

Newspapers and magazines

Radio

Television

Internet

Others

News and print

Music

Social networks

Video

Note: Data includes simultaneous media consumption. ‘Others’ comprises e-commerce, travel bookings, and other online activity not included elsewhere.

Sources: Zenith Optimedia, eMarketer, Pew Research Center; A.T. Kearney analysis

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