Net Statistics

Posted on 11/10/1998 by Jim Pickerell | Printable Version | Comments (0)



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.

Net Users

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

internet sales.

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.

Foreign Demand

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

larger agencies.

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.

Copyright © 1998 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to:  


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