"Networked generation" abandon TV for the internet

A new "networked generation" is increasingly abandoning TV, radio and newspapers for the internet as falling prices and greater choice boost high-speed broadband adoption and mobile phone usage among UK households, according to telecoms watchdog Ofcom's annual market report.

Nine million households now have broadband connections in the UK - up 63 per cent between 2004 and 2005 - with the cost of services over 1Mbps falling from an average of around £41 to £16 per month.

In addition to this the number of wi-fi hotspots across the UK has almost doubled in the last year to 14,600 - up from 8,500 in 2005 - while 1.8 million households now use their broadband connections to make cheap or free phone calls using voice over IP.

The report also reveals mobile phone usage accounts for almost a third (31 per cent) of all calls made and that 10 per cent of households now rely exclusively on their mobile phones rather than a landline phone.

Ofcom says this trend will continue and that it is leading to a radical shift in the media consumption of the UK's "networked generation", who are increasingly abandoning TV, radio and newspapers for online services and communities.

The internet now plays a central role in the daily life of the 16- to 24-year-old age group, who watch TV for an hour less a day, listen to radio less and read newspapers less than the average viewer as a result of their online usage, according to Ofcom.

Online advertising is also continuing to attract significant revenues away from other media and reached £1.3bn per year in 2005 - compared with £3.8bn for TV advertising revenue and £0.5bn for radio advertising revenue.

Ed Richards, COO at Ofcom, said in a statement: "The sector is being transformed by greater competition, falling prices and the erosion of traditional revenues and audiences. A new generation of consumers is emerging for whom online is the lead medium and convergence is instinctive."