Future Foundation: The highs & lows of the broadband recession

In our latest Research Focus report, Future Foundation questions why a “whacking 90%” of British consumers would refuse to pay £5 a month to visit their favourite newspaper online…

The Future Foundation has for some time now been tracking an increased sense of consumer empowerment that has intensified even in the wake of the economic downturn – never before have we had such power over brands to demand value and quality: cheap air travel, competitively priced groceries, multi-channelled television, beautiful fashions for women and men, inexpensive internet availability, mobile phones that double as cameras / computers / live maps / gaming platforms / social networking tools. 

We want it and we mean to get it good.

The Broadband Recession

One of the key drivers behind this raft of new, post-recessional lifestyle behaviours is, of course, the internet – thanks to the explosion in online services designed specifically to help consumers manage their personal finances better, we are now able to research the best deals, , trade down or up or across, devise new ways to boost our personal income, restyle existing goods to make them last longer, use short-term rental markets, enhance our professional capital with sites like LinkedIn and much more.

Looking to our last wave of Changing Lives research in Autumn 2009, we see the outcomes of what we term the Broadband Recession: 74% of consumers are now shopping around and using all the tools at their disposal to get the best deals.  More than 80% say they are more aware of the price of goods and services than previously.  Just under half the British population agree that they “trust price comparison websites to honestly compare prices and show me the best deals.

The rise of Free

One of the defining features of the digital decade has been the vast proliferation of free content – in a bid to engage with and entice cash-strapped customers, brands have made a huge wealth of content available free-of-charge.  Every day, millions can access entertainment websites without clicking a penny; read newspapers, magazines and books; watch amusing video clips; consult tourist guides; compare prices, and so much more.

This extends to the offline world too – commuters in most major UK cities can grab a copy of a free newspaper – resulting in more than a third of consumers now saying they “no longer buy newspapers as often as before” now they are available for free (rising to 46% of 15-24 year olds).

Busy Rascals

But there is a dark side to this online phenomenon: a much reinforced capacity on the part of shoppers to take things from shelves, both real and virtual, without paying.  In fact, for many, there is an assumption that many of them should indeed be free for all, for ever more.

Looking to the music industry, perhaps the biggest victim to date of the rise in ‘dark consumerism’, the recording sector’s global trade body IFPI estimates that 95% of all music downloads across the world are unauthorised, “with no payment to artists and producers”.  The motion picture body MPAA quotes a study by the ITIF (2009), which says that by the mid-00s, the American film industry was losing $20 billion a year through illegal downloading, copying etc.  As for videogame piracy, the ITIF quotes a report from the Entertainment Software Alliance, which claims that in 2008 that same body issued 6 million copyright infringement notices; in the same year, some 13 prominent titles were, apparently, illicitly downloaded a stunning 6.4 million times.

What is also becoming clear is just how confident consumers are in their belief that they should be able to view what they want.  A recent Pew study records that 75% of young music downloaders in the USA agree that file-sharing is “so easy to do it’s unrealistic to expect people not to do it”.  When the Future Foundation asked British consumers if they would pay £5 a month to visit their favourite newspaper in its online version, a whacking 90% said NO.  We also found that a majority of under-24s agreed that they should be able to download movies and music for free.

The government has prioritised the assault on illegal activity on the internet – the hastily enforced Digital Economy Bill includes plans to give Ofcom powers to cut off the internet connections of persistent net pirates.  But the debate over the notion that the internet and all its content – fabulous and frivolous, ugly and elevating – are essentially public goods has gathered serious intellectual support and we see no easy end in sight.

So we end by again revisiting the sheer appetite for free-of-charge goods, which the internet has unleashed – of course, there is a lot of petty crime underneath our story here and many victims too. But one has the sense that all consumers, the virtuous and the venal alike, are being given powerful tools of personal control in conditions in which 21st century economics is no longer the science of scarcity.  That is our still emerging story here.

For more, contact Karen Canty at the Future Foundation on 020 3008 5772 or karenc@futurefoundation.net