Related Web Works

October 21, 1996

Household Internet Access Doubled in the Past Year

By JARED SANDBERG Staff Reporter of THE WALL STREET JOURNAL

NEW YORK -- The number of U.S. households with access to the Internet more than doubled to 14.7 million in the past year while growth at Internet-access providers outstripped commercial on-line services, a recent survey shows.

"What's really dramatic is the acceptance of the Internet from home," said Thomas E. Miller, vice president at Find/SVP, the market-research firm that conducted the survey with Jupiter Communications. "Consumers are ready for information access from the Internet," he said.

As of September 1996, roughly nine million adult Americans logged onto the Internet's World Wide Web daily, while nearly 20 million people signed onto the Web weekly. A year ago, 2.3 million logged onto the Internet each day, while 5.3 million users went on-line each week. Last year, 6.2 million households had access to the Internet. Mr. Miller of FIND/SVP estimates that roughly 38.7 million Americans over the age of 18 have tapped into cyberspace at least once.

Surveys of the Internet population have been watched closely as media and technology companies spend hundreds of millions of dollars developing on-line storefronts for a consumer audience that few fully know. Though companies can see how many times users view files on the Web, they often don't know who their customers are or how frequently they visit.

What's worse, respected researchers have been proved wrong. Last year, Donna Hoffman, a consultant to a major survey of Internet usage by Dun & Bradstreet Corp.'s Nielsen Media Research unit and an associate professor of management at Vanderbilt University in Nashville, Tenn., pointed out that its findings inflated the numbers of users and their income levels.

The Find/SVP and Jupiter study, projectable to U.S. homes owning telephones, was conducted by randomly dialing 3,255 U.S. households and interviewing adults at least 18 years of age. Of those households, 1,018 were found to own personal computers, and these homes were asked extensively about their computer usage. Although Prof. Hoffman said she and others have asked for more detailed disclosure of methodology from Find/SVP and others, the survey's numbers are "in the neighborhood" of other studies suggesting the number of U.S. Internet users is roughly 35 million.

Increasingly, those users are bypassing commercial on-line services for direct Internet-access providers. Internet-access providers simply connect people to the Internet, and while on-line services are now providing wider access too, they have traditionally offered content through their own closed systems. Though more than half of the Internet usage from home is provided by commercial on-line services, the number of users gaining access to the global computer network from Internet-access providers has more than tripled to 4.4 million households from 1.4 million last year. By contrast, commercial on-line services have grown only 28%, providing access to 8.9 million households, compared with 6.9 million last year.

Adam Schoenfeld, vice president at Jupiter Communications, said that the survey confirms that commercial on-line services such as America Online Inc. have met with hefty price competition from smaller Internet-access providers.

The survey shows banks are also under threat of increased competition. Mr. Schoenfeld said that consumers expressed "a strong antipathy" toward banks and could bypass them in order to electronically pay bills and balance checkbooks, according to focus groups. "Banks need to be vigilant, or they face losing their customer base to brokerages, insurance companies and other nonbanks," Mr. Schoenfeld said.

While only 6% of all PC households go on-line for banking chores, the survey shows that banks may be overlooking a key market when trying to attract more on-line traffic. While women represent only about one-third of on-line users, they balance the check book and pay bills in half of PC-owning households. In only a quarter of such households are these financial activities conducted solely by men. "The banks haven't realized the degree to which women are involved," Mr. Schoenfeld said.