Study: Lower-income Web users now fastest-growing U.S. market

NEW YORK (Reuters) -- Low-income Web users drawn to sites like ValuePay.com and GetPaid4.com are going online at three to four times the rates of wealthier groups that favor upscale financial or travel sites, a U.S. study published Monday found.

Market research firm Media Metrix of New York said a survey of 55,000 Internet users found low-income groups, especially those from households earning less than $25,000 a year, grew nearly 50 percent in the 12 months ended in June.

At the other extreme, Internet users from households with incomes greater than $75,000 grew just 13 percent.

While the lower-income Internet users grew more than 49 percent to 7.5 million users, they still represent only 10 percent of the total online population, the smallest group in terms of income. Web surfers earning more than $75,000 make up nearly one-third of the total audience.

At first glance the study appears to reflect the dull statistical fact that low-income groups have more room to grow compared to higher income groups. But it also highlights the changing demographics of the Web as it becomes a mass medium.

"The Internet ... clearly looks more like the mainstream population than ever before," said Media Metrix analyst Anne Rickert, the author of the study entitled "Web Usage Patterns by Household Income."

The U.S. market survey found lower-income Web users, typically newer to the Internet, tend to be less experienced surfers and yet spend more time online -- about 13 hours per month. They viewed 700 Web pages on average during June.

By contrast, higher-income users, who tend to be more experienced Web surfers, spent less time -- just over nine hours -- and viewed an average of only 550 pages during the month of June, the report found.

Household income also appears to influence Internet viewing preferences with lower-income groups visiting Internet career and auction sites, while higher-income audiences flock to hobby, leisure, auto, sports and travel sites. For example, ValuePay.com, which offers visitors a nominal fee of a dollar for each hour spent on the site, was the second most-visited online destination in June among lower-income Web users.

Internet users with mid-level household incomes, defined as between $40,000 and $60,000 a year, the largest group of Web users, showed a wide range of Web site preferences that were more difficult to categorize, a summary of the study said.

"Because Internet users with higher household incomes were among the earliest adopters of the net, they are more likely to have already established their online preferences, thereby streamlining their sessions," Rickert said.

"Because many lower-income users are new to the Internet, and therefore less experienced, they are likely to spend more time and view more content online as they get acquainted with the medium," she said.

With growth slowing among the wealthy and middle-income groups, lower income Americans have partly compensated for the increasing maturation of U.S. Internet market.

The survey found that overall U.S. Internet use grew 23 percent annually, down from explosive rates of prior years, but still faster than some analysts had previously forecast.

This faster growth reflects an unforeseen plunge in the price of personal computers in 1999 and a growing move to new low-cost Web access devices such as handheld PCs, Web TVs and other Internet devices that can retail for as little as $99.

"Income is always the main driver that influences adoption of any new technology, be it digital TV, PCs, cell phones or MP3 (Internet music) players," said Forrester Research's Ekaterina Walsh, another Internet analyst who tracks social trends.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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