New generation abandons TV for Internet

A new 'networked generation' is increasingly abandoning TV, radio and newspapers for the Internet as falling prices and greater choice boost high-speed broadband adoption and mobile phone usage among UK households, according to telecoms watchdog Ofcom's annual market report.

Nine million households now have broadband connections in the UK -- up 63 per cent between 2004 and 2005 -- with the cost of services over 1Mbps falling from an average of around £41 to £16 per month.

In addition to this the number of Wi-Fi hotspots across the UK has almost doubled in the last year to 14,600 -- up from 8,500 in 2005 -- while 1.8 million households now use their broadband connections to make cheap or free phone calls using voice over IP.

The report also reveals mobile phone usage accounts for almost a third (31 per cent) of all calls made and that 10 per cent of households now rely exclusively on their mobile phones rather than a landline phone.

Ofcom says this trend will continue and that it is leading to a radical shift in the media consumption of the UK's 'networked generation', who are increasingly abandoning TV, radio and newspapers for online services and communities.

The Internet now plays a central role in the daily life of the 16- to 24-year-old age group, who watch TV for an hour less a day, listen to radio less and read newspapers less than the average viewer as a result of their online usage, according to Ofcom.

Online advertising is also continuing to attract significant revenues away from other media and reached £1.3bn per year in 2005 -- compared with £3.8bn for TV advertising revenue and £0.5bn for radio advertising revenue.

Ed Richards, chief operating officer at Ofcom, confirmed this. "The sector is being transformed by greater competition, falling prices and the erosion of traditional revenues and audiences. A new generation of consumers is emerging for whom online is the lead medium and convergence is instinctive," he said.