Monday, August 24, 2009

Here's why Social Media is Growing


In October, I will be giving a presentation on Social Media and Marketing to a group of local business owners.

Today, this piece of research landed in my inbox, which shows why Social Media continues to grow.

I'll give you the quick version first.

As more and more people rely on dial-up internet connections less and less, the whole internet experience becomes more mainstream and easier to use which includes social media. Here's the details:

Broadband Catching Up in Rural Areas
A new comScore study on broadband growth in rural, micropolitan and metropolitan areas in the United States finds that broadband has experienced the most significant gains in rural areas during the past two years.

Rural markets (population less than 10,000) in the U.S. experienced a 16-percentage point increase in broadband penetration from Q2 2007 to Q2 2009, making it the fastest growing geographic market segment in the nation. Comparatively, micropolitan areas (population between 10,000-50,000) grew 14 percentage points during the same period, while metropolitan areas (population 50,000+) grew 11 percentage points.

Broadband Penetration (% of Homes With Internet Connection, Total U.S.)

Geographic Area

Q2 2007

Q2 2008

Q2 2009

Point Change Q2 2009 vs. Q2 2007

Metropolitan

81%

87%

92%

11

Micropolitan

69%

76%

83%

14

Rural

59%

66%

75%

16

Source: comScore, Inc., August 2009; Metropolitan defined as area with 50,000+ population, Micropolitan defined as area with 10,000-50,000 population.

Brian Jurutka, vice president of telecommunications at comScore, notes that "... with low-speed DSL priced at about the same level as dial-up in many areas, there is little incentive for households to remain on dial-up."

Broadband penetration of 75% in rural markets remains well below the national average of 89%. Lower broadband penetration in rural areas is compounded by lower Internet usage overall of 63% of all rural households with at least one member access the Internet, compared with 73% of urban households.

The fastest growing local markets in broadband adoption were all smaller, ranking at or below #50 in terms of size. Ft. Myers - Naples was the fastest growing market with a 12-percentage point increase in broadband penetration from Q1 2008 to Q1 2009.

Fastest Growing Local Markets Based on Broadband Penetration Growth (Q1 2009 vs. Q1 2008, Total U.S)

Market

Market Size Rank

Q1 2008

Q1 2009

Point Change Q1 2009 vs. Q1 2008

Ft. Myers-Naples

70

76%

88%

12

Flint-Saginaw-Bay City

64

69%

80%

11

Louisville

50

68%

79%

11

Evansville

99

65%

77%

11

Tri-Cities, TN-VA

90

60%

70%

10

Source: comScore, Inc., August 2009

In comparison, the nation's largest markets are closer to reaching saturation and experienced low single-digit growth.

Broadband Penetration in Largest National Local Markets Based on Market Size of Internet Households (Q1 2009 vs. Q1 2008, Total U.S.)

Market

Market Size Rank

Q1 2008

Q1 2009

Point Change Q1 2009 vs. Q1 2008

New York

1

94%

96%

2

Los Angeles

2

85%

87%

2

Chicago

3

88%

92%

4

Philadelphia

4

86%

89%

3

San Francisco-Oakland-San Jose

5

86%

89%

3

Source: comScore, Inc

While large broadband providers such as AT&T and Comcast have a presence in rural areas, smaller and more localized providers such as Cincinnati Bell, Insight, PenTeleData, Mediacom and Bresnan Communications are proving tough competition in the battle for market share.

And, the Leichtman Research Group study found that the nineteen largest cable and telephone providers in the US, representing about 93% of the market, acquired 634,000 net additional high-speed Internet subscribers in the second quarter of 2009. Net broadband additions in the quarter were the fewest of any quarter in the eight years LRG has been tracking the industry.

Other broadband findings for the quarter include:

  • The top phone companies added about 385,000 subscribers, representing 61% of the net broadband additions for the quarter versus the top cable companies
  • Overall, broadband additions in 2Q 2009 amounted to 71% of those in 2Q 2008, with Telcos having 178% as many additions as a year ago, and cable 37% as many adds as a year ago
  • The top broadband providers now account for 69.9 million subscribers - with cable companies having 38 million broadband subscribers, and telephone companies having about 31.9 million subscribers
  • The top cable broadband providers have a 54% share of the overall market

Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc., summarizes by saying "The second quarter has proven to be traditionally weak for broadband growth, but with the market becoming more mature, broadband (additions) further waned in 2Q 2009... In a reverse of last year's second quarter, when cable operators got three-quarters of the net broadband adds, Telcos earned over 60% of the broadband net adds in 2Q 2009."

Broadband Subscribers (July 1, 2009)

Broadband Internet

Subscribers at end of 2Q 2009

Net Adds in 2Q 2009

Cable Companies

Comcast

15,322,000

64,000

Time Warner

9,046,000

94,000

Cox

4,110,000

30,000

Charter

2,957,700

10,600

Cablevision

2,503,000

18,000

Mediacom

754,000

6,000

Insight

481,500

3,000

Cable ONE

386,472

371

RCN

307,000

1,000

Other major private cable companies

2,137,500

22,500

Total Top Cable

38,005,172

249,471

Telephone Companies

AT&T

15,548,000

112,000

Verizon

9,111,000

186,000

Qwest

2,923,000

34,000

CenturyLink

2,145,200

28,200

Windstream

1,024,600

14,900

Frontier

613,810

13,763

FairPoint

296,107

(4,775)

Cincinnati Bell

235,400

400

Total Top Telephone Companies

31,897,117

384,488

Total Broadband

69,902,289

633,959

Sources: The Companies and Leichtman Research Group, Inc.

For additional information about these studies, please visit ComScore here, and the Leichtman Research Group here.

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