182 NET STATISTICS
November 19, 1998
In considering the role the internet is likely to play in the future, it is worth
examining a few internet statistics. The statistics I have included were drawn from
four principle sources: Andrew Kantor's seminar at Internet World in October,
Barbara Brundage's presentation at Photo East and a recent PACA members survey on
image scanning and storage practices and TrendWatch's survey on "Creatives Use Of
The Internet". Barbara is president of Pacific Stock in
Honolulu. Andrew is executive editor or "Earth Web" in New York.
It should be noted that most internet statistics are based on projections based on
very small amounts of hard data. Thus, various "authoritative" sources can produce
widely differing results. The numbers below may be more indicative of trends rather
than hard facts.
There will be somewhere between 120 and 150 million web users by the end of 1998.
In 1994 the estimated number of users was 25 million. By the end of 1996 it had
more than doubled to 57 million, and the steady growth is expected to continue.
About 55% to 60% of these users are in North America. Europe has 20% to 25% of the
users, but the level of growth in Europe has been flat. Use in Eastern Europe is
going up and the use in the northern countries (Norway, Sweden, Finland) is among
the highest per capita in the world. The Asia/Pacific region represents about 15%
of total users and that percentage is increasing. This leaves the rest of the world
with maybe 5% of the users.
81% of internet users have some college experience and half have a degree. However,
in the U.S. only 54% have college experience which means that in the U.S. younger
people and non-college educated business men and women use the net to a much greater
degree than they do in other countries.
In the U.S. the average household income of families using the internet is $52,500
which is much higher than the $37,005 average for the country according the U.S.
census. The average age of internet users is 35 to 36.
Sixty percent of internet users in the U.S. are male. Blacks, American Indians and
women over 50 are the fastest growing segments of the internet population.
Eighty two percent of net users say they have used it for shopping and estimates of
the numbers that have actually bought something on-line range from 27 million to 36
In 1997 consumer sales on the net were estimated to be just under $1 billion, but
one year later there are estimates that between $26 and $32 billion will be
spent on-line in 1998.
A study of North American Internet retailers by the Boston Consulting Group, released on
November 17, 1998, says retailers will collect more than $13 billion during 1998 from
Fifty nine percent of this revenue is generated by established retailers using the
web to complement other sales channels, such as mail-order catalogs and physical
Other sources estimate that by 2002 around $300 billion in goods and services will
be purchased annually on the web. John Chambers, CEO of Cisco Systems goes much
higher and says net sales will be between $1 to $2 trillion by 2002.
Business to business transactions are expected to account for 80% of the e-commerce
throughout the next 5 years. By 2002 the U.S. is expected to account for 63% of all
Right now, internet users say they are more likely to buy on-line than to buy from
print catalogs -- but the difference is just a couple percentage points.
Nevertheless, it is clear that a large number of interent users are very comfortable
with buying online.
The principle reason people, in general, give for not shopping on-line is that they
"can't see the product" and they "can't test it." Clearly, this will not be an
issue for stock photography buyers. Reviewing an image online gives the buyer the
same information that they get when purchasing from a print catalog -- and much more
accurate information than they would get if if they request a file search or make an
Other reasons people give for not shopping online are: (1) that they don't feel
safe, (2) concerns for the privacy of the data they supply, (3) unreliable web
sites, (4) lack of coordination among web sites and distribution channels, and (5)
that it is easier to shop locally.
Internet shoppers tend to shop by brand because they know the quality of the product
and service that certain brands provide. In the stock photo area the "quality of
product" issue is unlikely to play much of a role because stock photo buyers see
exactly what they are getting. Selection and service will be extremely important.
Customers will want to fulfill as much of their needs as possible at one location.
They will want prompt and courteous attention when they need service. Andrew Kantor
pointed out that the web can't do service nearly as well as a human, and that the
large on-line operations have trouble concentrating on service.
Barbara Brundage also said, "The internet will force many middlemen and distributors
to transform their business models or face decline or liquidation."
According to a Price Waterhouse/World Economic Forum survey, nearly 80% of global
CEO's surveyed believe e-commerce will reshape how they do business. Fifty nine
percent said it will create a significant change to their companies while 20% said
it will completely change the way they do business.
The challenge for many in the stock photo industry will be to modify their current
business model to fit the new realities.
Barbara Brundage surveyed selected foreign agents in the UK, Netherlands, Belgium,
Austria, Japan, Brazil and Argentina to get their perspective on the internet.
All agents either had a web site running, or had one under construction which will
offer clients a large selection of images.
All agents plan to feature images from their affiliates on their web sites and all
but one said they would provide their images to be featured on the U.S. agency web
The general consensus was that printed catalogs will be good for at least 2 to 3
years, but will be replaced by the Internet within 5-10 years. Some believe print
catalogs are here to stay. Foreign clients prefer personal contact and want the agent
to do research. Foreign agents expect this to continue. As it has been with print
catalogs, the clients will either find the image they need quickly and easily, or
contact the agency to help them with research. Agents view web sites, and print
catalogs, as marketing tools that promote the entire library.
The majority of agents surveyed felt that the availability of royalty free images
had not cut into their sales at this time.
One concern of foreign agents is what will happen when the same images are offered
on the web sites of several different affiliates. It is generally believed that if
each agent is offered territorial exclusivity for the images handled, as is the
common practice today, there should be no problem.
What Are U.S. Agencies Doing?
PACA recently surveyed their members on the subject of Image Scanning and Storage
Practices. Fifty Seven agencies responded and seventeen of these had more then 20
employees which means that the survey is somewhat overweighed with responses from
More than 85% of the agencies are doing some scanning of images in house. Almost
90% send digital files to customers, at least occasionally. When asked how they
deliver these digital files to their customers 77.2% responded on-line, 75.4% said
zip or jaz disc, and 56.1% write the image files to custom CD's.
The file sizes delivered are: less than 16MB (21%), between 16MB and 24MB (16%),
larger than 24MB (9%) and depends on the size requested by the customers (51%).
Almost all members are storing images in JPEG format, but most also store images in
at least one other format with 70.2% naming TIFF.
Among the problems encountered when sending images to customers are dissatisfaction
with scan quality, customers wanting higher resolution than the agency's scanners
are capable of producing, and complaints that the files took too long to download.
Creatives Use Of The Internet
According to TrendWatch 32,000 creative businesses have web sites. Only one-third of these
actually host the site themselves, another 1/3 use Internet service providers and the
remaining 1/3 rely on outside webmasters.
More than 21,000 of these businesses work on client web sites. Of this 21,000, 83%
work on promotional projects, 63% develop web strategies for their clients, and 83%
provide web page design services. Only 8% host a client site, but 20% do serve as
webmaster for their clients. Only 9% of clients's websites were used to check order
status or account information.
Thirty-one percent of the sites use digital photography on the sites and 29% use stock
photography. Fifteen percent use audio clips and 14% use video clips.
The TrendWatch survey is based upon nearly 750 statistically representative creative firms
including ad agencies, design firms, publishers, commercial photographers and corporate
esign departments. The survey was of 3200 creative firms with a response rate of 27%.
TrendWatch uses a 'bottom-up process' that starts with business owners to yield clear
and accurate trend monitoring.