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Executive summary

The research commissioned as part of this report highlights a variety of opportunities to promote UK consumers’ engagement with digital communications services. A single over-arching theme unites all of these opportunities – the need to make it easier for consumers to engage. However, this theme needs to be tailored for different groups – as the challenges to engagement vary for each.

Consumer engagement with technology

• Ofcom’s Communications Market: Nations and Regions report (April 2006) highlighted continued growth in the take-up and consumption of digital services across the UK.
• Consumers generally recognise the benefits that technology can bring – but they are also aware of drawbacks such as complexity, intrusion and the encouragement of anti-social behaviour. Technology is now intrinsically linked to how consumers like to spend their leisure time, as people increasingly rely on technology for their everyday needs.
• However, many consumers do not feel confident or competent with technology – and are frequently happy to devolve responsibility for this to others in their household. Consumers may also perceive that cost is preventing them from engaging with digital services sooner and more fully.
• Realising the potential value in digital communications services is not solely dependent on higher take-up of digital platforms, but is also related to increasing use of technology that consumers already have access to. It is frequently the case that only a small minority of those who might value a digital function claim to be actually using it.

Ofcom’s consumer engagement segmentation model

The research reveals that there are wide ranging differences in how and why UK consumers engage with digital communications services. However, these differences in engagement cannot be explained by an individual’s age, gender or income; broader attitudes towards technology and digital services are more influential factors.

An attitudinal segmentation model was developed to provide a richer and more in-depth understanding of the different ways that UK consumers are engaging with digital communications services. The key characteristics of the model are as follows:

• Figure 1 shows that the majority (68%) of consumers have the same broad attitude towards each of the four main digital communications platforms: TV, radio, the internet and mobile phones (cross-platform attitudes). A minority (32%) of consumers think about and see value in one platform differently from the others (platform-specific attitudes).

Figure 1: Consumer attitudes towards digital communications services

• Among consumers with attitudes which are consistent across communications platforms, the segmentation model identifies five consumer segments – each one painting a picture of the way certain UK consumers value digital services.
• Among consumers with platform-specific attitudes, two key reasons generally explained the absence of more common ‘cross-platform’ behaviour:
  
  one platform or medium was considered to be a much more integral part of their life, and they placed significantly greater importance on it;
  
  they had a specific goal or need from one platform or medium, which was not mirrored in the other platforms.
• These attitudes were not primarily defined by take-up of digital services. Consumers with high ownership of digital services can be found across many of the segments.

The cross-platform segments

Each of the five cross-platform segments reveals opportunities to promote consumers’ engagement with digital communications services. In general, these opportunities relate to:

• improved support and better promotion of benefits; and
• targeted product and pricing development

A map of the nature of opportunities for each of the cross-platform segments is shown in Figure 2.

Figure 2: The five cross-platform segments – opportunities for further engagement

• The Enthusiasts are keen and adventurous digital users for whom technology plays a broad and important role in delivering practical benefits and social or leisure opportunities. Even these individuals, though, are not always taking advantage of some of the functionality they might value – as a hectic work and personal life often takes priority over further digital exploration. This group needs a fast track through to new benefits and features – potentially via convergent devices.
• The Functionalists are very confident with and feel knowledgeable about technology, but engage with digital services in a cautious and considered manner. While open to new developments, they are only prepared to broaden their horizons if there is a very clear benefit to them. This group needs ‘fit for purpose’ products and services without bolt-on ‘bells and whistles’.
• The Economisers see clear value in the full range of benefits that digital services can offer and take advantage of the platforms at their disposal – but costs may be limiting further take-up and use, particularly of the internet. This group needs an affordable entry point and products and services with reasonable ongoing costs.
• The Abstainers often have access to digital services at home but use them little, primarily due to lack of confidence, knowledge or interest. In the absence of support and guidance, many have taken the easier option of turning their back on digital services as they are uncomfortable with trying something new in case it goes wrong. This group needs considerable back-up to get them started and to help them gain confidence and experience in the use of digital communications services.
• The Resistors are detached from digital services, believing them to be of little relevance to their lives - and actively resisting technology adoption. However, this initial rejection frequently masks a sense of being daunted by technology and a desire for digital products and services that are easier and simpler. These people also need to be clearly shown how digital services could benefit them.

Figure 3 outlines the key characteristics of the cross-platform segments.

Figure 3: Key characteristics of the cross-platform segments

	Enthusiasts	Functionalists	Economisers	Abstainers	Resistors
More likely to be	Minority ethnic groups From metropolitan areas	More affluent Male	Younger Lower Income From Metropolitan areas	Female Less Affluent	Older
Most likely to own and use...	Everything	Everything within reason	Everything except the internet-but with one eye on the cost	A Mobile phone(but live in a household with other devices they don't use)	Nothing
Most likely to say...	I couldn't do without it	Would I really use that?	I'd really like to be able to do that	My partner/children use all that	It's just not for me
Most likely to be put off by because	I've too many other things to do	I don't have a use for all this	I can't afford it	I don't know where to start	I'd get no vale or benefit from this
Most likely to need or want..	A fast-track (Convergent devices)	Straightforward - no bells and whistles	Lower cost entry point Lower ongoing costs	Ongoing support and guidance	A reason to believe-awareness of the benefits for them

Consumer engagement with digital TV services

• Improved picture quality and greater ease of use are the two improvements to TV services that UK adults stated they would value most. Greater channel choice appealed to half of TV viewers. A minority of consumers now consider that their TV set provides more than just the opportunity to view television – for example, a way to listen to music, or a monitor for console games.
• Two broad themes cover the more advanced digital TV functionality that consumers find most attractive: features that make it easier to watch when you want to (e.g. Personal Video Recorders), and features that make it easier to find what you want to watch (e.g. electronic programme guides).
• Most consumers are aware of digital TV, and recognise some of its benefits - but this often focuses solely on greater channel choice and improved picture quality. Consumers typically do not automatically associate digital TV with ease of use, information or control benefits, despite frequently believing that these would be valuable improvements to current TV services.
• The research identified seven different ways in which consumers value digital TV services. These were illustrated through the five cross-platform segments (Enthusiasts, Functionalists, Economisers, Abstainers and Resistors) and two TV-specific mindsets (the TV-Centrics and the TV Optimisers).
• The TV-Centrics’ interest in and reliance on television drives their ownership of digital TV, in spite of their lack of confidence with the technology. Like the Abstainers, they need ongoing support and guidance to encourage more advanced digital TV use. (10% of UK adults have this attitude towards television.)
• The TV Optimisers strongly value digital TV benefits as a means of maximising (not expanding) their viewing experience. Like the Enthusiasts, they need a ‘fast track’ to new benefits and features, but greater promotion of the benefits of TV delivery through other delivery mechanisms could also prove valuable. (12% of UK adults have this attitude towards television.)
• Figure 4 maps the potential opportunities for further engagement with digital TV services for each of these seven groups.

Figure 4: Attitudes to television - opportunities for further engagement

Consumer engagement with digital radio services

• Improved sound quality and greater ease of use are the two improvements to radio services that UK adults state they would value most. These were found to be considerably more appealing than any of the other benefits of digital radio – including greater station choice – for both digital and analogue listeners.
• Awareness remains a considerable challenge to further engagement with digital radio. Slightly more than half of UK consumers claim to have heard of the term ‘DAB digital radio’ but only one of its benefits (improved sound quality/reception) was spontaneously mentioned by more than half of respondents. Ease of use is the benefit where there is the largest gap between the proportion of consumers valuing that feature and the number spontaneously associating it with digital radio.
• Interest in the delivery of radio content through a range of other delivery mechanisms (such as the internet, TV and portable devices) appealed to a minority of consumers. This finding mirrors the high levels of access to digital radio services in UK households – but lower levels of actual listening to radio via these platforms.
• The research identified seven different ways in which consumers value digital radio services. These were illustrated through the five cross-platform segments (Enthusiasts, Functionalists, Economisers, Abstainers and Resistors) and two radio-specific mindsets (the Radio-Centrics and the Radio Agnostics).
• The Radio-Centrics are strongly committed to radio as a medium but lack confidence and competence with technology. The benefits of digital are not enough to trigger a step change. Like the Resistors, they need a better understanding of the improved sound quality of digital radio – together with raised awareness of the ease of use of DAB sets and their ease-of-tuning benefits. (9% of UK adults have this attitude towards radio.)
• The Radio Agnostics are confident with technology but their limited interest in radio (primarily music) may restrict a wider appreciation of digital benefits. Like the Functionalists, they need an easy and straightforward upgrade path to DAB radio sets. (16% of UK adults have this attitude towards radio.)
• Figure 5 maps the potential opportunities for further engagement with digital radio services for these seven groups.

Figure 5: Attitudes to radio - opportunities for further engagement

Consumer engagement with internet and broadband services

• Many people have concerns about the internet, whether or not they have access at home. This suggests that these concerns may not be – on their own – a primary factor in determining engagement with internet services. Affordability, low levels of media literacy and lack of interest are stronger influences.
• While the main purposes of the internet are still seen to relate to communication, transactions and information, the role of the internet for entertainment is beginning to emerge. Broadband-facilitated applications, such as VoIP and music downloading, are now starting to be appreciated by a significant proportion of consumers.
• However, perceptions of the benefits of broadband still largely relate to the improved connectivity that it offers, rather than the new applications that it can support. Dial-up customers often do not believe that broadband would significantly improve their internet experience – given what they currently use the internet for.
• The research identified seven different ways in which consumers value the internet and broadband services. These were illustrated through the five cross-platform segments (Enthusiasts, Functionalists, Economisers, Abstainers and Resistors) and two internet-specific mindsets (the Internet Selectives and the Internet Enthusiasts).
• The Internet Selectives tend to see the internet for more limited uses such as email and occasional transactions, and broadband exclusively for improved connectivity. Like the Abstainers, they need encouragement to broaden their horizons in terms of the benefits that the internet could bring. (6% of UK adults have this attitude towards the internet.)
• The Internet Enthusiasts see wide ranging uses for the internet as a whole, valuing the connectivity benefits of broadband as well as certain communications and entertainment applications – like the cross-platform Enthusiasts. They need greater reassurance regarding the security of the internet to ensure that their natural thirst for knowledge in this area can continue. (13% of UK adults have this attitude towards the internet.)
• Figure 6 maps the potential opportunities for further engagement with the internet and broadband services for each of these seven groups.

Figure 6: Attitudes to the internet/broadband - opportunities for further engagement

Consumer engagement with mobile phones and portable devices

• UK consumers appear to have a love-hate relationship with their mobile phones. Many claimed that there are times when they don’t want to be disturbed and wish they didn’t have a mobile phone, but just as many believed that they would be completely lost without it as a means of contact.
• Affordability and complexity may be a barrier to further engagement for both current owners and non-owners of mobile phones. In addition, many non-owners do not believe that they would gain sufficient value to offset the cost of using a mobile, considering it to be something that they would never use and an expensive luxury.
• Awareness and perceived relevance remain the main challenges for 3G technology. Half of consumers are aware of the term ‘3G’, and the majority are not certain what additional benefit they would gain from a 3G phone.
• The perceived value of the functions of portable devices is relatively muted – primarily concentrated on email, audio entertainment and applications that help people to organise their lives. None of the portable features enabled by 3G were valued by more than one-fifth of consumers.
• The research identified seven different ways in which consumers value mobile phones and portable devices. These were illustrated through the five cross-platform segments (Enthusiasts, Functionalists, Economisers, Abstainers and Resistors) and two mobile/portable-specific mindsets (Mobile Reliants and the Mobile Organisers).
• The Mobile Reliants are wholly dependent on their mobile phones as a means of contact and a tool to organise their social life. They need peer-level support and advice, like the cross-platform Abstainers, to encourage more advanced use of the functionality that mobile phones and portable devices can provide. (6% of UK adults have this attitude towards mobile phones/portable devices.)
• The Mobile Organisers value the increased efficiency and organisational benefits that portable devices offer (in both a personal and a business context). Like the Functionalists, they need tried and tested products and services, as they often wait to adopt until the ‘emerging’ functions match the performance of established technology. (9% of UK adults have this attitude towards mobile phones/portable devices).
• Figure 7 maps the potential opportunities for further engagement with mobile phones and portable devices for each of these seven groups.

Figure 7: Attitudes to mobile phones and portable devices- opportunities for further engagement

Full document available below

• Consumer Engagement with Digital Communications Services [pdf]
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