Analysts: Consumers drop TV, turn to Internet for entertainment

NEW YORK, N.Y. - Many consumers are now spending less time watching TV, reading, and talking on the phone, preferring Web-based video, gaming, and social networks for entertainment instead, says new research by Magid Associates.

Consumers are shifting quickly and dramatically from TV to the Internet for "leisure time entertainment," and the transition is most apparent among under 35-year-olds, according to new research from Frank N. Magid Associates.

Over 92% of Internet users say they are using their PCs for entertainment on a weekly basis, and 35% of them claim to be watching less fare on TV as a result, according to Mike Vorhaus, president of Magid Advisors, who delivered results of the firm's study at the recent Future of Television Conference here last week.

During his talk at the conference, Vorhaus also pointed out that while the study looked at use of the Internet for entertainment as opposed to other purposes -- such as information gathering -- the term "entertainment" wasn't used synonymously with video viewing.

"Many consumers are reporting that new media is cannibalizing their viewing of TV. This self-reported reduction of TV viewing is across a broad range of Internet users, including those who watch online video, use social networks, and otherwise use their PCs for entertainment," according to the analyst. Online gaming is another entertainment favorite, he suggested.

Over 25% of online video viewers said they are watching less TV since they started watching video through online services such as Hulu, said the Magid advisor, whose company has done extensively since the 1950s with TV stations, cable networks, magazines, and other media around strategic planning, branding, programming, and promotion.

Meanwhile, almost 30% of social network users taking part in Magid's study said they're reducing their TV viewing "due to their use of MySpace, Facebook, etc.," according to Vorhaus.

The study was conducted exclusively among consumers who are Internet users. Many of the participants also said that use of the Internet is reducing time spent on on their activities, but not by such substantial margins.

Other activities impacted by use of the Internet for entertainment included reading newspapers/magazines, talking on the phone, sleeping, playing games on consoles, playing sports or exercising, watching DVDs or VHS tapes, spending time with family and friends, listening to music, and working.

On the whole, 21% of the 12-to-64-year-old Internet users participating in the study said they prefer the Internet for entertainment, while 18% said they prefer watching TV. Among males, the Internet edged out TV by only a single percentage point, at 19% vs. 18% . Among females, the Internet was slightly more of a favorite, at 22% vs. 19%.

Both males and females between 55 and 64 -- the oldest age bracket studied -- actually preferred TV to the Internet for entertainment, though not by very much.

Out of 12 different leisure activities presented in the survey, the four favorites among 55- to 64-year-old males were as follows: watching TV (21%). reading books (18%); using the Internet (17%); and playing sports or exercising (11%).

The youngest males in the survey -- aged 12 to 17 -- actually preferred "playing games on consoles like PlayStation 3, Xbox 360, Wii, etc." (45%) and playing sports and exercising (17%) to either using the Internet (12%) or watching TV (3%).

To TV advertisers, males in this age bracket are sometimes called "the lost boys." Consequently, it's interesting that the survey shows TV to be so unimportant to them relative to other entertainment activities, Vorhaus said.

Vorhaus urged the TV industry to come to grips with the fact that many Internet users are drifting away from television.

"The TV industry seems to take solace in the fact that Nielsen ratings do not reflect [cannibalization]. But at a minimum this self-reported behavior by consumers must mean a reduction in engagement in TV if not a reduction in actual hours the set is turned on, as measured by Nielsen," according to the analyst.

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