November 23, 2003

Consumption of Information Goods and Services in the U.S.

Part 1. Introduction

A defining characteristic of the changing U.S. household has been the growth in consumption of information goods and services.

As the average size of the household has declined in the past century, Americans have increasingly filled their homes with tools to send and receive information, including computers, telephones, and digital videodisc (DVD) players. In the 1990s, the average yearly expenditure by Americans for media and information services rose from $365.42 to $640.86 per person, a growth in real terms of 32%. We Americans also spend more time processing information, with a 6% increase between 1990 and 2000 in the time spent on various communications media.2 At home, work, school, and on the road, today’s Americans are far more likely than earlier generations to use information and have close at hand tools to manipulate and distribute it.

The upshot has been a growing need for personal information processing – a need for individuals to have the wherewithal to gather and share information that shapes the decisions they make as consumers, citizens, family members, friends, and neighbors. Today, electronic gadgets and information services are a crucial, and in some cases primary, means by which people conduct personal information processing. The Pew Internet & American Life Project has focused on the online portion of this phenomenon, showing in a number of reports the Internet’s beneficial role in health care decisions, social connectedness, civic and political engagement, and in important life decisions such as choosing a college or buying a house.

In this report, we cast our net more widely by asking Americans more comprehensively the ways in which they engage in personal information processing. The October 2002 survey of 1,677 Americans that is the basis for this report focused on the following personal technologies: Internet, cable television, cell phones, computers, satellite dishes, premium television channels, the pager, digital videodisc players (DVDs), personal digital assistants (PDAs), and digital video recorders (DVRs). We asked people whether they own or subscribe to these information services and how much per month they pay for subscription services. For the Internet, we asked how much they pay for service and how much per month they pay for online content available over the Internet. As is our normal practice, we asked online users about a number of Internet activities available online, as well as questions about how they manage their interface with the Web (e.g., what Internet service providers they subscribe to, whether they have switched ISPs, and whether they manipulate the homepage that first appears when they click on their browser).

The perils and promise of personal information processing manifest themselves in everyday ways and also generate considerable buzz among analysts of trendsetting. The cell phone call of the person next to you on the train may annoy, the person tapping something on a personal digital assistant may look odd. Is he typing an email or catching up on the news? You may be that person reading the news on a PDA or connecting to the Internet wirelessly at the coffee shop – and enjoying the easy access to information.

Analysts give different labels to the people and processes involved with personal information processing. Some see a group of “influentials” in society – about 10% of the population – who are information conduits in identifying new trends. These people use a variety of means to connect others to new ideas and information, and they are more likely to have Internet access and use it as a main source for information and communications.3 Others see an emerging “creative class”, an economic grouping of people such as engineers, architects, writers, or musicians, as an underpinning to economic vitality and, at 30% of the workforce, a growing segment of the population. These “creatives” access and exchange information more often than others.4

In a less sanguine take on information’s role in modern society, some worry about the detrimental effects of the “daily me.” When people automatically route information of their choosing to their “daily me” news file, they thereby eliminate the chance of encountering different views and, some feel, jeopardize the health of our civil society.5 Others look at the bright side. The torrent of information we have at our disposal – especially as more becomes available by mobile means – may enable people to interact more effectively. “Smart mobs” are one such example of this phenomenon, whereby people use text messaging to organize heretofore unconnected people. These smart mobs could help foster cooperation in society and enable people to easily determine the reputations of anonymous people and groups. The overall result would be a more trustworthy and better functioning society – one with more social capital.5 More puckishly, we have seen the recent wave of “flash mobs” by which a loose network of people, connected by the Net or cell phones, converge on a site in a city simply for the sake of assembling.

Using information is more important than ever for all Americans.

Whichever way the population is divided, using information is more important than ever. This report charts in detail the information goods and services that Americans consume and how much they pay for them on a monthly basis. Specifically, the report develops a typology of technology users as a way to examine the variation in the intensity with which different segments of the population use technology. In addition to benchmarking what people purchase and how much they pay, the report also looks at people’s perspectives and behaviors regarding the information technology marketplace.

  1. Information on spending and time use comes from The Statistical Abstract of the United States, 1998 and 2002 editions and extends from 1990 to 2000. The items included in spending and time use categories are: television, radio, recorded music, daily newspaper, consumer books, consumer magazines, home video, movies in theaters, and Internet access.
  2. Ed Keller and Jon Berry, The Influentials. New York: The Free Press, 2003.
  3. Richard Florida, The Rise of the Creative Class. New York: Basic Books, 2002.
  4. Howard Rheingold, Smart Mobs: The Next Social Revolution. Cambridge, MA: Perseus Publishing, 2002.