As we look at our iConsumer research — McKinsey and Company’s research into how consumer digital behavior is changing across platforms, activities and geographies that we’ve been doing for the last 5 years — we’re seeing fundamental changes in the way people are interacting with digital media.
Take, for example, the emergence of the smartphone and tablet computing experience — it is changing where and how computing devices are used. Smaller format screens don’t just mean changing column widths, they mean rethinking the business model. Companies need to have a “mobile first” mindset when developing new content.
In the early years of web browsers, there was so much angst about whether print media was doomed that newspapers didn’t know whether to dive into digital editions. Although business models are still evolving, all publishing titles have some form of website now. But a site scaled for desktop monitors isn’t the optimal format today. Just as we’ve seen physical newspapers shrink in size, digital versions must follow suit.
Last year, for the first time, smartphones and tablets outshipped PCs and we’re starting to see this pattern mirrored in usage. Over the last four years, PC use has fallen from 78 percent of all computing time to 57 percent. Over the same period, mobile phones have risen from 22 percent to 33 percent and tablets from 0 percent to 11 percent.
Already, more than a third of the time people spend web browsing, using social networking sites, and using e-mail/messaging software is on mobile devices. In a couple of years, we expect it to be more than half. This is creating a ‘touch first’ computing paradigm.
It’s not a question of replacing the PC but about finding new use cases around the home. Most people think of mobile usage as accessing local apps as they walk down the street. Based on our research, half to two-thirds of tablet and mobile smartphone usage is at home. People are using these devices in new locations around the home – the kitchen table, in the living room, in their bedroom.
It’s not just size forcing a rethink from publishers. Smartphones and tablets (and now some laptops) are touchscreen devices. This means overhauling how information is delivered to and accessed by the consumer. Simply scaling down a website to fit a smaller screen is no longer a viable option. This isn’t the same as moving from broadsheet to Berliner format, this is more like moving from broadsheet to braille. What does this mean for developers and business models? Faster download times, short-form content, more video?
Small devices are on the rise. The real growth in the device market is not at the high end but in the sub-$300 market. Consumers expect PC-level computing power from subsidized devices. Entry-level smartphones now come in at the $100-200 level while tablets such as the Kindle, Nexus and iPad-mini are bringing the average price down to $200-350.
As cost falls, and uptake rises, publishers will have to be mobile first, and PC second. That means developing for Android and iOS first, and everything else second.
In this world of personalized media, business models need to change to compete at the low end, with services subsidizing devices and subscription-based and micropayment models dominating. Advertising revenue may be harder to secure with limited screen space – full sponsorship may be a more lucrative avenue. It will be interesting to see how other players in the space will evolve relative to integrated vertical players like Apple, Google, Amazon and Microsoft.
Tags: digital, iConsumer, iPad, iPhone, mobile, tablets