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Tech Industry

Study: Net an entertainment option

The online medium is beginning to steal time away from television watching and reading.

As it becomes a more dominant source of consumer entertainment, the Internet is beginning to steal time away from television watching and reading, according to a survey released yesterday.

Some 34 percent of those questioned reported that personal home use of the Internet is replacing time spent watching TV, according to Research International, which prepared the study on behalf of PricewaterhouseCoopers.

An equal percentage of consumers reported that time spent on the Internet at home is replacing their reading time. That's especially true with older consumers, the report found.

Separately, the study examines consumer attitudes toward digital TV (DTV), a new high-definition technology whose profile will increase beginning November 1, when about 24 U.S. stations are expected to begin broadcasting digital programming. Only a few high-cost, next-generation TV sets capable of receiving these signals, and consumers are largely unfamiliar with the DTV.

The survey, which was released at the Business Week/PricewaterhouseCoopers Global Convergence Summit, polled 1,000 American and 963 British consumers on technology and its impact on their lives.

"The Web is brimming with new services and content that is proving irresistible to consumers," said Kevin Carton, Senior Partner and Global Leader of PricewaterhouseCoopers' entertainment and media group. "The networks, publishers, and even Hollywood will need to rethink their businesses to maintain and grow their share of consumers."

Research and email still top the list of why people get on the Net but e-commerce, including online banking and shopping, is starting to pick up, according to the report.

In both the United States and the United Kingdom, comparison shopping for products was cited as the No. 1 reason for logging online. In the States, 67 percent of respondents said that most online shopping involves large purchases such as cars or electronic equipment. Only 36 percent of all consumers who comparison-shop online actually make a purchase.

"E-commerce is clearly bringing 'window shopping' into the home and consumers are taking advantage,'' said Steven Abraham, managing partner in PwC's entertainment and media group. "As the conversion rates of 'shopping' to 'purchasing' grow, e-commerce will become a more critical revenue stream for retailers.''

Security is still an issue with most Web shoppers, however, with 60 percent of respondents saying that they would be likely to spend more if they knew their credit card information was more secure and privacy was better protected. When broken out by gender, the amount that the sexes are willing to spend varies greatly. Men are comfortable with spending larger sums online, up to $420, compared to about $120 on average spent by women, who tend to buy less expensive items such as clothing or books.

Separately, the study found that while consumers on both sides of the Atlantic are aware of DTV, few have actually seen it fired up. Most desire to find out more about DTV. With digital technology, broadcasters can offer a high-definition digital TV signal with significantly greater picture clarity than current analog TVs allow.

"Consumers just need to know more about what digital television is and how it will impact their lives,'' said Carton. "As more broadcasters experiment with the new format, consumers will have a much better grasp of the benefits of DTV."

The cost buying a digital television will be a factor in respondents' willingness to own one, according to the survey. A significant number could not place a number on how much more they would be willing to pay for digital television.

Analysts said that this finding is primarily due to the fact that many have not ever come in contact with a DTV. Those who would pay more for a set would only be willing to pay between $80-90 more for DTV, while the survey also found that generally younger respondents are willing to pay more for this technology.

As with the Internet, convergence plays a role in acquiring access to digital television. Consumers said they would be more likely to pay more if they received a cable-like package of a flat-rate bill for a specific package of channels.

Movie-quality entertainment is the main attraction to digital television that consumers are looking for. Fifty-four percent of respondents stated that "sharper, more clear movie theater quality pictures and sound is the most important potential attraction, followed by "enhanced programming options and more channels," which 33 percent of those surveyed said was important to them.

A major obstacle is that there isn't enough content developed in digital format to attract viewers. Nonetheless, this pace is slowing changing. CBS recently announced it would begin HDTV broadcasts of NFL football games this season.