Who's Buying Household Furnishings, Services, and Supplies

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New Strategist

3

rd

EDITION

Information Products and Services

THE฀WHO’S฀BUYING฀SERIES BY฀THE฀NEW฀STRATEGIST฀EDITORS

Wh

Information Products and Services 2nd฀EDITION 3rd฀EDITION

New Strategist Publications, Inc. P.O. Box 242, Ithaca, New York 14851 800/848-0842; 607/273-0913 www.newstrategist.com

Copyright 2006. NEW STRATEGIST PUBLICATIONS, INC.

All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, microﬁlming, recording, or otherwise without written permission from the Publisher.

ISBN 978-1-933588-16-2 Printed in the United States of America

Contents About the Data in “Who’s Buying Information Products and Services” ...............................................................................5 1.

Percent Reporting Expenditure and Amount Spent, Average Quarter 2004 ..............................9

Household Spending Trends: 2000 to 2004 .................................................................................................................10 2.

Household Spending Trends, 2000 to 2004 .................................................................................... 11

Household Spending on Information Products and Services, 2004 ...................................................................................14 3.

Information Products and Services Spending, 2000 to 2004 .......................................................16

Household Spending on Information Products and Services by Demographic Characteristic, 2004 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31.

Information Products and Services: Average Spending by Age, 2004 .......................................17 Information Products and Services: Indexed Spending by Age, 2004 .......................................18 Information Products and Services: Total Spending by Age, 2004 .............................................19 Information Products and Services: Market Shares by Age, 2004 ..............................................20 Information Products and Services: Average Spending by Income, 2004 .................................21 Information Products and Services: Indexed Spending by Income, 2004 .................................22 Information Products and Services: Total Spending by Income, 2004 .......................................23 Information Products and Services: Market Shares by Income, 2004 ........................................24 Information Products and Services: Average Spending by High-Income Consumer Units, 2004 .........................................................................................25 Information Products and Services: Indexed Spending by High-Income Consumer Units, 2004 .........................................................................................26 Information Products and Services: Total Spending by High-Income Consumer Units, 2004 .........................................................................................27 Information Products and Services: Market Shares by High-Income Consumer Units, 2004 .........................................................................................28 Information Products and Services: Average Spending by Household Type, 2004 .................29 Information Products and Services: Indexed Spending by Household Type, 2004 .................30 Information Products and Services: Total Spending by Household Type, 2004 ......................31 Information Products and Services: Market Shares by Household Type, 2004 ........................32 Information Products and Services: Average Spending by Race and Hispanic Origin, 2004 .................................................................................................33 Information Products and Services: Indexed Spending by Race and Hispanic Origin, 2004 .................................................................................................34 Information Products and Services: Total Spending by Race and Hispanic Origin, 2004 ......35 Information Products and Services: Market Shares by Race and Hispanic Origin, 2004 .......36 Information Products and Services: Average Spending by Region, 2004 .................................37 Information Products and Services: Indexed Spending by Region, 2004 .................................38 Information Products and Services: Total Spending by Region, 2004 .......................................39 Information Products and Services: Market Shares by Region, 2004 ........................................40 Information Products and Services: Average Spending by Education, 2004 ............................41 Information Products and Services: Indexed Spending by Education, 2004 ............................42 Information Products and Services: Total Spending by Education, 2004 ..................................43 Information Products and Services: Market Shares by Education, 2004 ...................................44

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 3

Household Spending on Information Products and Services by Product Category, 2004 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46.

Books (except Book Clubs) ...............................................................................................................46 Books Purchased through Book Clubs ...........................................................................................48 Cable Service and Community Antenna........................................................................................50 Cellular Phone Service ......................................................................................................................52 Computers and Computer Hardware for Nonbusiness Use .....................................................54 Computer Information Services .....................................................................................................56 Computer Software and Accessories for Nonbusiness Use .......................................................58 Magazines, Nonsubscription ..........................................................................................................60 Magazine Subscriptions ..................................................................................................................62 Newspapers, Nonsubscription .......................................................................................................64 Newspaper Subscriptions ...............................................................................................................66 Phone Cards ......................................................................................................................................68 Residential Telephone Service and Pay Phones ...........................................................................70 Telephones, Answering Machines, and Accessories ...................................................................72 Televison Sets ....................................................................................................................................74

Appendix: Spending by Product and Service Ranked by Amount Spent, 2004.......................................................................76 Glossary ............................................................................................................................................................82

4 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

About the Data in “Who’s Buying Information Products and Services” Introduction The spending data in Who’s Buying Information Products and Services are based on the Bureau of Labor Statistics’ Consumer Expenditure Survey, an ongoing, nationwide survey of household spending. The Consumer Expenditure Survey is a complete accounting of household expenditures, including everything from big-ticket items such as homes and cars, to small purchases like laundry detergent and videos. The survey does not include expenditures by government, business, or institutions. The lag time between data collection and dissemination is about two years. The data in this report are from the 2004 Consumer Expenditure Survey, unless otherwise noted. To produce this report, New Strategist Publications analyzed the Consumer Expenditure Survey’s average household spending data in a variety of ways, calculating household spending indexes, aggregate (or total) household spending, and market shares. Spending data by age, household income, household type, race, Hispanic origin, region of residence, and education are shown in this report. These analyses are presented in two formats—for all product categories by demographic characteristic and for all demographic characteristics by product category.

Deﬁnition of consumer unit The Consumer Expenditure Survey uses consumer unit rather than household as the sampling unit. The term “household” is used interchangeably with the term “consumer unit” in this report for convenience, although they are not exactly the same. Some households contain more than one consumer unit. The Bureau of Labor Statistics deﬁnes consumer unit as either: (1) members of a household who are related by blood, marriage, adoption, or other legal arrangements; (2) a person living alone or sharing a household with others or living as a roomer in a private home or lodging house or in permanent living quarters in a hotel or motel, but who is ﬁnancially independent; or (3) two or more persons living together who pool their income to make joint expenditure decisions. The bureau deﬁnes ﬁnancial independence in terms of “the three major expenses categories: housing, food, and other living expenses. To be considered ﬁnancially independent, at least two of the three major expense categories have to be provided by the respondent.” The Census Bureau uses household as its sampling unit in the decennial census and in the monthly Current Population Survey. The Census Bureau’s household “consists of all persons who occupy a housing unit. A house, an apartment or other groups of rooms, or a single room is regarded as a housing unit when it is occupied or intended for occupancy as separate living quarters; that is, when the occupants do not live and eat with any other persons in the structure and there is direct access from the outside or through a common hall.” The deﬁnition goes on to specify that “a household includes the related family members and all the unrelated persons, if any, such as lodgers, foster children, wards, or employees who share the housing unit. A person living alone in a housing unit or a group of unrelated persons sharing a housing unit as partners is also counted as a household. The count of households excludes group quarters.” Because there can be more than one consumer unit in a household, consumer units outnumber households by several million. Young adults under age 25 head most of the additional consumer units.

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 5

How to use the tables in this report The starting point for all calculations are the unpublished, detailed average household spending data collected by the Consumer Expenditure Survey. These numbers are shown on the report’s average spending tables and on each of the product-speciﬁc tables. New Strategist’s editors calculated the other ﬁgures in the report based on the average ﬁgures. The indexed spending tables and the indexed spending column (Best Customers) on the product-speciﬁc tables reveal whether spending by households in a given segment is above or below the average for all households and by how much. The total (or aggregate) spending tables show the overall size of the market. The market share tables and market share column (Biggest Customers) on the product-speciﬁc tables reveal how much spending each household segment controls. These analyses are described in detail below. • Average Spending The average spending ﬁgures show the average annual spending of households on information products and services in 2004. The Consumer Expenditure Survey produces average spending data for all households in a segment, e.g., all households with a householder aged 25 to 34, not just for those purchasing an item. When examining spending data, it is important to remember that by including both purchasers and nonpurchasers in the calculation, the average is less than the amount spent on the item by buyers. (See Table 1 for the percentage of households spending on information products and services in 2004 and how much the purchasers spent.) Because average spending ﬁgures include both buyers and nonbuyers, they reveal spending patterns by demographic characteristic. By knowing who is most likely to spend on an item, marketers can target their advertising and promotions more efﬁciently, and businesses can determine the market potential of a product or service in a city or neighborhood. By multiplying the average amount households spend on computer information services by the number of households in an area, for example, an Internet service provider can estimate the potential size of the local market for online services. • Indexed Spending (Best Customers) The indexed spending ﬁgures compare the spending of each household segment with that of the average household. To compute the indexes, New Strategist divides the average amount each household segment spends on an item by average household spending, and multiplies the resulting ﬁgure by 100. An index of 100 is the average for all households. An index of 125 means the spending of a household segment is 25 percent above average (100 plus 25). An index of 75 indicates spending that is 25 percent below the average for all households (100 minus 25). Indexed spending ﬁgures identify the best customers for a product or service. Households with an index of 178 for cell phone service, for example, are a strong market for this service. Those with an index below 100 are either a weak or an underserved market. Spending indexes can reveal hidden markets—household segments with a high propensity to buy a particular product or service but which are overshadowed by household segments that account for a larger share of the market. Householders aged 35 to 44, for example, account for 18 percent of the magazine subscription market—larger than the 13 percent share controlled by householders aged 65 to 74. But a look at the indexed spending ﬁgures reveals that, in fact, the older householders are the best customers. Householder aged 65 to 74 spend 39 percent more than the average household on magazine subscriptions, while those aged 35 to 44 spend 15 percent less than average. Magazine publishers can use this information to target their best customers. Note that because of sampling errors, small differences in index values may not be signiﬁcant. But the broader patterns revealed by indexes can guide marketers to the best customers.

6 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

• Total (Aggregate) Spending To produce the total (aggregate) spending ﬁgures, New Strategist multiplies average spending by the number of households in a segment. The result is the dollar size of the total household market and of each market segment. All totals are shown in thousands of dollars. To convert the numbers in the total spending tables to dollars, you must append “000” to the number. For example, households headed by people aged 35 to 44 spent more than $10 billion ($10,861,106,000) on cell phone service in 2004. When comparing the total spending ﬁgures in this report with total spending estimates from the Bureau of Economic Analysis, other government agencies, or trade associations, keep in mind that the Consumer Expenditure Survey includes only household spending, not spending by businesses or institutions. Sales data also will differ from household spending totals because sales ﬁgures for consumer products include the value of goods sold to industries, government, and foreign markets, which may be a signiﬁcant proportion of sales. • Market Shares (Biggest Customers) New Strategist produces market share ﬁgures by converting total (aggregate) spending data into percentages. To calculate the percentage of total spending on an item that is controlled by each demographic segment—i.e., its market share—each segment’s total spending on an item is divided by aggregate household spending on the item. Market shares reveal the biggest customers—the demographic segments that account for the largest share of spending on a particular product or service. In 2004, for example, householders aged 55 or older accounted for 57 percent of spending on newspaper subscriptions. By targeting only older householders, newspaper publishers could reach the majority of their customers. There is a danger here, however. By single-mindedly targeting the biggest customers, businesses cannot nurture potential growth markets. With competition for customers more heated than ever, targeting potential markets is increasingly important to business survival. • Product-Speciﬁc Tables The product-speciﬁc tables reveal at a glance the demographic characteristics of spending by individual product category. These tables show average spending, indexed spending (Best Customers), and market shares (Biggest Customers) by age, income, household type, race and Hispanic origin, region of residence, and education. If you want to see the spending pattern for an individual product at a glance, these are the tables for you.

History and methodology of the Consumer Expenditure Survey The Consumer Expenditure Survey is an ongoing study of the day-to-day spending of American households. In taking the survey, government interviewers collect spending data on products and services as well as the amount and sources of household income, changes in savings and debt, and demographic and economic characteristics of household members. The Bureau of the Census collects data for the CEX under contract with the Bureau of Labor Statistics, which is responsible for analysis and release of the survey data. Since the late nineteenth century, the federal government has conducted expenditure surveys about every ten years. Although the results have been used for a variety of purposes, their primary application is to track consumer prices. In 1980 the CEX became a continuous survey with annual release of data (with a lag time of about two years between data collection and release). The survey is used to update prices for the market basket of products and services used in calculating the Consumer Price Index. The CEX consists of two separate surveys: an interview survey and a diary survey. In the interview portion of the survey, respondents are asked each quarter for ﬁve consecutive quarters to report their expenditures for the previous three months. The purchase of big-ticket items such as houses, cars, and major

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 7

appliances, or recurring expenses such as insurance premiums, utility payments, and rent are recorded by the interview survey. The interview component covers about 95 percent of all expenditures. Expenditures on small, frequently purchased items are recorded during a two-week period by the diary survey. These detailed records include expenses for food and beverages purchased in grocery stores and at restaurants, as well as other items such as tobacco, housekeeping supplies, nonprescription drugs, and personal care products and services. The diary survey is intended to capture expenditures respondents are likely to forget or recall incorrectly over longer periods of time. Two separate, nationally representative samples are used for the interview and diary surveys. For the interview survey, about 7,500 consumer units are interviewed on a rotating panel basis each quarter for ﬁve consecutive quarters. Another 7,500 consumer units keep weekly diaries of spending for two consecutive weeks. Data collection is carried out in 105 areas of the country. The Bureau of Labor Statistics reviews, audits, and cleans the data, and then weights them to reﬂect the number and characteristics of all U.S. consumer units. Like any sample survey, the CEX is subject to two major types of error. Nonsampling error occurs when respondents misinterpret questions or interviewers are inconsistent in the way they ask questions or record answers. Respondents may forget items, recall expenses incorrectly, or deliberately give wrong answers. A respondent may remember how much he or she spent at the grocery store but forget the items picked up at a local convenience store. Nonsampling error can also be caused by mistakes during the various stages of data processing and reﬁnement. Sampling error occurs when a sample does not accurately represent the population it is supposed to represent. This kind of error is present in every sample-based survey and is minimized by using a proper sampling procedure. Standard error tables documenting the extent of sampling error in the CEX are available from the Bureau of Labor Statistics at http://www.bls.gov/cex/csxstnderror.htm. Although the CEX is the best source of information about the spending behavior of American households, it should be treated with caution because of the above problems.

For more information To ﬁnd out more about the CEX, contact the specialists at the Bureau of Labor Statistics at (202) 6916900, or visit the Consumer Expenditure Survey home page at http://www.bls.gov/cex/. The web site includes news releases, technical documentation, and current and historical summary-level CEX data. The detailed average spending data shown in this report are available from the Bureau of Labor Statistics only by special request. For a comprehensive look at detailed household spending data for all products and services, see the 11th edition of Household Spending: Who Spends How Much on What. To see the best and biggest customers for the complete array of products and services examined by the CEX, see the fourth edition of Best Customers: Demographics of Consumer Demand. To download spending reports for individual product and service categories, visit nSpend, the instant-answer service, at http://www.nspend.com. New Strategist’s books are available in hardcopy or as downloads by visiting http://www .newstrategist.com or by calling 1-800-848-0842.

8 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

Table 1. Percent Reporting Expenditure and Amount Spent,

Average Quarter 2004 (percent฀of฀consumer฀units฀reporting฀expenditure฀and฀amount฀spent฀by฀purchasers฀during฀ an฀average฀quarter,฀2004) average quarter percent reporting expenditure

amount spent by purchasers

Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use

45.1% 4.7 4.2

Reading material Newspaper subscriptions Books (except those purchased through book clubs) Newspapers, nonsubscription Magazines, nonsubscription Magazine subscriptions Books purchased through book clubs

21.9 19.7 13.6 10.2 8.4 2.2

47.63 63.15 17.37 20.49 44.50 63.66

Telephone Residential telephone service and pay phones Cellular phone service Phone cards Telephones and accessories

87.4 46.0 9.1 4.4

169.37 205.87 50.96 81.38

Television Cable service and community antenna Televisions (table model) Televisions (console)

71.2 2.6 1.0

165.48 385.66 1,380.53

$77.32 723.49 114.82

Note:฀Expenditures฀shown฀are฀total฀net฀outlays฀at฀the฀time฀of฀purchase,฀whether฀or฀not฀the฀ item฀was฀ﬁnanced. Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀2004฀Consumer฀Expenditure฀Survey

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 9

Household Spending Trends: 2000 to 2004 Between 2000 and 2004, spending by the average household rose 4 percent, to $43,395, after adjusting for inﬂation. At the same time, average household income grew by a larger 11 percent. The considerable gap between income growth and spending growth reveals consumer caution, despite the improving economy. The pundits might accuse Americans of spending beyond their means, but in fact the steady rise in consumer spending at the national level primarily is the result of demographic change—population growth and the aging of the baby-boom generation into the peak earning and spending years. Much of the growth in household spending between 2000 and 2004 was involuntary, brought about by the ever-larger claim of necessities on the household budget. After adjusting for inﬂation, the average household spent 11 percent more on property taxes in 2004 than in 2000. Spending on gasoline rose 13 percent during those years. Spending on vehicle insurance also grew 13 percent. Out-of-pocket spending on health insurance increased by an enormous 24 percent. Spending on education rose an even greater 31 percent. Declines in discretionary spending are evident in the 2000 to 2004 trends. Spending on “other lodging,” a category that includes hotel and motel expenses, fell 10 percent, after adjusting for inﬂation. Spending on furniture declined 3 percent, women’s apparel fell 5 percent, and shoes lost an even larger 13 percent. Spending on public transportation (a category dominated by airline fares) declined 6 percent. Households cut their spending on fees and admissions to entertainment events by 7 percent and reading material by 19 percent. Contrary to popular perception, Americans are cautious spenders at the individual household level. The recession of 2001 followed by the lackluster recovery forced households to spend less on many discretionary items to make ends meet. Rapidly rising energy costs are now reducing discretionary spending even further. With the aging baby-boom generation entering its sixties and leaving the peak spending years behind, average household spending is not likely to grow much in the years ahead. American businesses will have to adapt to a new economic landscape, one in which afﬂuence is becoming less common and the middle class is struggling to stay aﬂoat. The globalization of the workforce coupled with rising energy prices and an increasingly troubled health insurance system will make our future very different from our past.

10 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

Table 2. Household Spending Trends, 2000 to 2004 (average฀annual฀spending฀of฀total฀consumer฀units,฀2000฀and฀2004;฀percent฀change,฀ 2000–04;฀in฀2004฀dollars)฀ ฀ ฀ percent change 2000–04

2004

2000

116,282 $54,453

109,367 $48,975

6.3% 11.2

43,395

41,731

4.0

FOOD Food at home Cereals and bakery products Cereals and cereal products Bakery products Meats, poultry, ﬁsh, and eggs Beef Pork Other meats Poultry Fish and seafood Eggs Dairy products Fresh milk and cream Other dairy products Fruits and vegetables Fresh fruits Fresh vegetables Processed fruits Processed vegetables Other food at home Sugar and other sweets Fats and oils Miscellaneous foods Nonalcoholic beverages Food prepared by consumer unit on trips

5,781 3,347 461 154 307 880 265 181 108 156 128 42 371 144 226 561 187 183 110 82 1,075 128 89 527 290 41

5,658 3,314 497 171 326 872 261 183 111 159 121 37 356 144 212 571 179 174 126 92 1,017 128 91 479 274 44

2.2 1.0 –7.2 –10.0 –5.8 0.9 1.5 –1.2 –2.5 –1.9 6.1 12.6 4.1 0.2 6.8 –1.8 4.6 4.9 –12.8 –11.0 5.7 –0.3 –2.2 9.9 5.8 –6.6

Food away from home

2,434

2,344

3.8

Number of consumer units (in 000s) Average before-tax income Average annual spending

ALCOHOLIC BEVERAGES HOUSING Shelter Owned dwellings Mortgage interest and charges Property taxes Maintenance, repair, insurance, other expenses Rented dwellings Other lodging Utilities, fuels, and public services Natural gas Electricity

459

408

12.5

13,918 7,998 5,324 2,936 1,391

13,513 7,803 5,048 2,895 1,249

3.0 2.5 5.5 1.4 11.3

997 2,201 473

905 2,231 524

10.2 –1.3 –9.8

2,927 424 1,064

2,730 337 999

7.2 25.9 6.5

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 11

percent change 2000–04

2004

2000

Fuel oil and other fuels Telephone Water and other public services Household services Personal services Other household services

$121 990 327 753 300 453

$106 962 325 750 358 393

13.7% 2.9 0.7 0.4 –16.1 15.4

Housekeeping supplies Laundry and cleaning supplies Other household products Postage and stationery

594 149 290 155

529 144 248 138

12.4 3.7 17.0 12.1

Household furnishings and equipment 1,646 Household textiles 158 Furniture 417 Floor coverings 52 Major appliances 204 Small appliances, miscellaneous housewares 105 Miscellaneous household equipment 711

1,699 116 429 48 207 95 802

–3.1 35.9 –2.8 7.7 –1.6 10.0 –11.3

APPAREL AND RELATED SERVICES Men and boys Men, aged 16 or older Boys, aged 2 to 15

1,816 406 317 89

2,036 483 377 105

–10.8 –15.9 –16.0 –15.5

739 631 108

795 666 129

–7.1 –5.2 –16.6

79

90

–12.2

Footwear

329

376

–12.6

Other apparel products and services

264

292

–9.5

TRANSPORTATION Vehicle purchases Cars and trucks, new Cars and trucks, used

7,801 3,397 1,748 1,582

8,136 3,749 1,761 1,941

–4.1 –9.4 –0.7 –18.5

Gasoline and motor oil

1,598

1,416

12.8

Other vehicle expenses 2,365 Vehicle ﬁnance charges 323 Maintenance and repairs 652 Vehicle insurance 964 Vehicle rentals, leases, licenses, other charges 426

2,502 360 684 853 604

–5.5 –10.2 –4.7 13.0 –29.5

441

468

–5.8

HEALTH CARE Health insurance Medical services Drugs Medical supplies

2,574 1,332 648 480 114

2,266 1,078 623 456 109

13.6 23.5 4.0 5.2 5.0

ENTERTAINMENT Fees and admissions Television, radio, and sound equipment Pets, toys, and playground equipment Other entertainment products and services

2,218 528 788 381 522

2,044 565 682 366 431

8.5 –6.5 15.5 4.0 21.1

Women and girls Women, aged 16 or older Girls, aged 2 to 15 Children under age 2

Public transportation

12 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

PERSONAL CARE PRODUCTS AND SERVICES

2004

2000

percent change 2000–04

$581

$619

READING

130

160

–18.8

EDUCATION

905

693

30.5

TOBACCO PRODUCTS AND SMOKING SUPPLIES

288

350

–17.7

MISCELLANEOUS

–6.1%

690

851

–18.9

CASH CONTRIBUTIONS

1,408

1,307

7.7

PERSONAL INSURANCE AND PENSIONS Life and other personal insurance Pensions and Social Security

4,823 390 4,433

3,691 438 3,253

30.7 –10.9 36.3

PERSONAL TAXES Federal income taxes State and local income taxes Other taxes

2,166 1,519 472 175

3,419 2,642 616 160

–36.6 –42.5 –23.4 9.3

GIFTS FOR NONHOUSEHOLD MEMBERS

1,215

1,188

2.3

Note:฀Average฀spending฀is฀rounded฀to฀the฀nearest฀dollar.฀The฀percent฀change฀calculation฀is฀ based฀on฀unrounded฀ﬁgures.฀The฀Bureau฀of฀Labor฀Statistics฀uses฀consumer฀unit฀rather฀than฀ household฀as฀the฀sampling฀unit฀in฀the฀Consumer฀Expenditure฀Survey.฀฀ For฀ the฀ deﬁnition฀ of฀ consumer฀unit,฀see฀the฀glossary.฀Spending฀on฀gifts฀is฀also฀included฀in฀the฀preceding฀product฀ and฀service฀categories.฀ ฀ ฀ Source:฀Bureau฀of฀Labor฀Statistics,฀2000฀and฀2004฀Consumer฀Expenditure฀Surveys,฀Internet฀ site฀http://www.bls.gov/cex/;฀calculations฀by฀New฀Strategist฀฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 13

Household Spending on Information Products and Services, 2004 Between 2000 and 2004, average household spending on information products and services (computers, telephones, television, and reading material) rose 7 percent, to $2,007, after adjusting for inﬂation. This relatively small increase in spending masks sweeping changes in the way households allocate their dollars within the broad information product and service category. Average household spending on reading material fell a steep 19 percent between 2000 and 2004, while spending on television (primarily cable service) rose 33 percent. Spending on telephone products and services climbed just 2 percent, while spending on computers essentially held steady, with a 0.5 percent rise. A closer look at spending within each major category reveals how households are responding to far-reaching technological change. The average household nearly tripled its spending on cellular phone service during the four-year period, after adjusting for inﬂation. Spending on computer information services (Internet) more than doubled. But spending on residential phone service fell 29 percent, spending on computer hardware decreased 35 percent, and spending on computer software diminished 0.7 percent. Spending on reading material dropped in every individual category. Book spending experienced the smallest decline, with average household spending on books falling 9 percent between 2000 and 2004, after adjusting for inﬂation. Spending on newspaper subscriptions decreased 20 percent, and spending on magazine subscriptions lost a substantial 29 percent. In 2004 as in 2000, the average household devoted the largest share of its information spending to residential phone service. Residential telephone service accounted for 29.5 percent of information spending, down sharply from the 44 percent share it held in 2000. Cable service ranked second in both years, but cable’s share rose from 19 to 23.5 percent between 2000 and 2004. Cellular phone service ranked third in 2004, up from fourth in 2000, its share rising from 7 to 19 percent. Computer information service ranked sixth in 2000 and fourth in 2004, its share rising from 4 to 7 percent during those years. Books almost held their ground, with a 2.5 percent share in 2004, down from 2.9 percent in 2000. Every type of reading material lost market share during those years. By 2004, reading material accounted for just 6.5 percent of household spending on information products and services, down from 9 percent in 2000. Important shifts are taking place within information product and service categories. The average household now spends more on computer information services than on computer hardware or software. In 2000, cellular phone service accounted for just 13 percent of telephone spending. By 2004, the share had climbed to 37 percent. Spending on cellular service could overtake residential phone service in the years ahead as cell phones become the norm.

Spending by age Householders aged 45 to 54 spend the most on information products and services—$2,431 in 2004, or 21 percent more than the average household. A look at spending by detailed category reveals sharp differences in spending patterns by age. Spending on computer information services peaks in the 35-to-54 age group, at 23 to 28 percent above average. Spending on cell phone service skews younger, with spending 19 to 27 percent above average in the 25 to 54 age groups. Older householders dominate spending on reading material. Households headed by people aged 55 or older control 57 percent of spending on newspaper subscriptions. Householders aged 55 to 74 spend 37 to 39 percent more than average on magazine subscriptions, while householders under age 45 spend well below average on this item. These differences in spending by age suggest more change lies ahead as younger Internet and cell phone users replace older print aﬁcionados. 14 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

Spending by household income Not surprisingly, spending on information products and services rises with income in most, but not all, categories. Spending on phone cards is above average for many lower-income households. Spending on computer system repair bumps up at the $40,000 to $49,999 income level. Many of these householders are older, and because they do not have a teenager in the house they depend on commercial repair services to keep their computer system up and running. Spending on magazine subscriptions also rises above average in the $40,000 to $49,999 income group, again because retirees are the best customers. Income makes a big difference on book spending. Households with incomes of $100,000 or more spend more than twice the average on books, accounting for 33 percent of household spending on this item—a much greater percentage than their 13 percent share of households.

Spending by household type Married couples with school-aged or older children at home devote the largest amount of money to information products and services, spending 29 to 50 percent more than average. Couples with children aged 18 or older at home are the best customers of cell phone service, spending 75 percent more than the average household on this item. Married couples with school-aged or older children at home spend 45 to 56 percent more than average on computer information services. Those without children at home (most of them empty-nesters) spend the most on reading material, particularly newspaper and magazine subscriptions (spending 73 and 68 percent more than average, respectively).

Spending by race and Hispanic origin Blacks and Hispanics spend slightly less than average on information products and services overall, while Asians and non-Hispanic whites spend an average amount. Black and Hispanic spending is well above average on a few items, however. Blacks spend 16 percent more than the average household on residential phone service. Hispanics spend three times the average on phone cards. Asians, too, spend nearly three times the average on phone cards. Asians spend more on computers than any other racial or ethnic group.

Spending by region Spending on information products and services overall does not vary much by region. But by individual category there are some important regional differences. Average household spending on computers is 29 percent above average in the West and 14 percent below average in the South. Spending on reading material is above average in every region except the South, where it is 25 percent below average.

Spending by education College graduates spend 27 percent more than the average household on information products and services. On some items, however, their spending is not far above average. College graduates spend only 13 percent more than the average household on cable service and only 12 percent more on residential phone service. They spend 10 percent less than average on phone cards. Book spending shows the biggest difference by education. College graduates spend more than twice the average on books and control 60 percent of the book market. They spend 51 percent more than average on computer information services and 29 percent more than average on cell phone service.

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 15

Table 3. Information Products and Services Spending, 2000 to 2004 (average฀annual฀and฀percent฀distribution฀of฀household฀spending฀on฀information฀products฀and฀services,฀2000฀to฀2004;฀percent฀change฀in฀spending,฀2000–04;฀ in฀2004฀dollars)฀ ฀ ฀ ฀ ฀ 2004 average household spending INFORMATION SPENDING Telephone Television Computer Reading material INFORMATION SPENDING Residential telephone service and pay phones Cable service and community antenna Cellular phone service Computer information services Computers and computer hardware, nonbusiness use Televisions Books (except book clubs) Newspaper subscriptions Telephones and answering machines Computer software and accessories, nonbusiness use Phone cards Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs Repair of computer systems for nonbusiness use

$2,007.43 1,016.63 563.27 297.12 130.41 2,007.43 592.31 471.01 378.39 139.46 134.57 92.26 49.69 41.76 27.42 19.06 18.51 14.88 9.44 8.36 5.50 4.03

2000 percent distribution 100.0% 50.6 28.1 14.8 6.5 100.0 29.5 23.5 18.8 6.9 6.7 4.6 2.5 2.1 1.4 0.9 0.9 0.7 0.5 0.4 0.3 0.2

average household spending (in 2004$) $1,876.17 995.96 423.97 295.56 160.68 1,876.17 830.70 352.33 131.08 67.31 206.05 71.64 54.32 52.03 34.18 19.19 – 20.95 13.45 10.42 8.81 2.94

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown.฀“–”฀means฀data฀are฀not฀available.฀ ฀ Source:฀Bureau฀of฀Labor฀Statistics,฀2000฀and฀2004฀Consumer฀Expenditure฀Surveys;฀calculations฀by฀New฀Strategist฀

16 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

percent distribution

฀ ฀

percent change 2000–04

100.0% 53.1 22.6 15.8 8.6

7.0% 2.1 32.9 0.5 –18.8

100.0 44.3 18.8 7.0 3.6 11.0 3.8 2.9 2.8 1.8 1.0 – 1.1 0.7 0.6 0.5 0.2

7.0 –28.7 33.7 188.7 107.2 –34.7 28.8 –8.5 –19.7 –19.8 –0.7 – –29.0 –29.8 –19.8 –37.6 37.1

฀ ฀

Table 4. Information Products and Services: Average spending by age, 2004 (average฀annual฀spending฀of฀consumer฀units฀(CU)฀on฀information฀products฀and฀services,฀by฀age฀of฀consumer฀unit฀reference฀person,฀2004)

Number of consumer units (in 000s) Number of persons per CU Average before-tax income of CU Average spending of CU, total INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards Television Cable service and community antenna Television sets

total consumer units 116,282 2.5 $54,453.00 43,394.87

under 25 8,817 1.9 $22,840.00 24,534.56

25 to 34 19,439 2.9 $52,484.00 42,700.54

35 to 44 24,070 3.2 $65,515.00 50,401.62

45 to 54 23,712 2.7 $70,434.00 52,764.36

55 to 64 17,479 2.1 $61,031.00 47,298.58

65 to 74 11,230 1.9 $42,137.00 36,511.98

75+ 11,536 1.5 $28,028.00 25,763.32

2,007.46 297.12 139.46

1,211.52 218.39 69.60

1,987.48 300.36 145.35

2,266.89 356.15 171.48

2,430.96 405.09 178.25

2,201.01 306.72 152.11

1,705.05 192.09 105.73

1,240.19 94.31 50.05

134.57

134.64

134.35

158.03

189.90

130.88

73.63

37.06

19.06

12.05

18.84

22.64

30.73

17.95

9.81

4.00

4.03

2.10

1.82

4.00

6.21

5.78

2.92

3.20

130.41

50.75

93.51

122.61

148.60

177.07

157.68

135.25

49.69 41.76 14.88 9.44 8.36 5.50

26.31 3.70 6.18 4.95 8.51 1.06

46.75 13.94 9.69 7.97 10.13 4.31

55.81 28.50 12.68 9.86 9.77 5.81

59.45 46.06 16.60 10.92 8.95 6.52

65.43 59.95 20.33 11.59 8.85 7.57

44.66 69.43 20.68 11.05 4.95 6.84

20.73 82.06 17.42 6.65 3.65 3.75

1,016.66 592.31 378.39 27.45 18.51

652.63 245.25 371.32 10.68 25.38

1,037.64 536.85 464.67 11.30 24.82

1,169.43 664.51 451.23 25.66 28.03

1,236.14 681.74 479.39 59.12 15.89

1,071.22 673.33 353.38 32.23 12.28

827.98 596.40 207.65 13.20 10.73

592.04 489.82 82.91 14.12 5.19

563.27 471.01 92.26

289.75 215.60 74.15

555.97 443.50 112.47

618.70 513.74 104.96

641.13 543.40 97.73

646.00 537.61 108.39

527.30 473.76 53.54

418.59 371.08 47.51

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown. Source:฀Bureau฀of฀Labor฀Statistics,฀unpublished฀tables฀from฀the฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

฀

฀

฀

฀

฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 17

Table 5. Information Products and Services: Indexed spending by age, 2004 (indexed฀average฀annual฀spending฀of฀consumer฀units฀(CU)฀on฀information฀products฀and฀services฀by฀age฀of฀consumer฀unit฀reference฀person,฀2004;฀index฀ deﬁnition:฀an฀index฀of฀100฀is฀the฀average฀for฀all฀consumer฀units;฀an฀index฀of฀132฀means฀that฀spending฀by฀consumer฀units฀in฀that฀group฀is฀32฀percent฀above฀ the฀average฀for฀all฀consumer฀units;฀an฀index฀of฀68฀indicates฀spending฀that฀is฀32฀percent฀below฀the฀average฀for฀all฀consumer฀units) total consumer units $43,395 100

under 25 $24,535 57

25 to 34 $42,701 98

35 to 44 $50,402 116

45 to 54 $52,764 122

55 to 64 $47,299 109

65 to 74 $36,512 84

75+ $25,763 59

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100 100 100

60 74 50

99 101 104

113 120 123

121 136 128

110 103 109

85 65 76

62 32 36

100

100

100

117

141

97

55

28

100

63

99

119

161

94

51

21

100

52

45

99

154

143

72

79

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

100

39

72

94

114

136

121

104

100 100 100 100 100 100

53 9 42 52 102 19

94 33 65 84 121 78

112 68 85 104 117 106

120 110 112 116 107 119

132 144 137 123 106 138

90 166 139 117 59 124

42 197 117 70 44 68

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100 100 100 100 100

64 41 98 39 137

102 91 123 41 134

115 112 119 93 151

122 115 127 215 86

105 114 93 117 66

81 101 55 48 58

58 83 22 51 28

Television Cable service and community antenna Television sets

100 100 100

51 46 80

99 94 122

110 109 114

114 115 106

115 114 117

94 101 58

74 79 51

Average spending of CU, total Average spending of CU, index

Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀ ฀ ฀

18฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

฀

฀

฀

Table 6. Information Products and Services: Total spending by age, 2004 (total฀annual฀spending฀on฀information฀products฀and฀services,฀by฀consumer฀unit฀(CU)฀age฀groups,฀2004;฀consumer฀units฀and฀dollars฀in฀thousands) total consumer units 116,282 $5,046,042,273

under 25 8,817 $216,321,216

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

233,431,464 34,549,708 16,216,688

10,681,972 1,925,545 613,663

38,634,624 5,838,698 2,825,459

54,564,042 8,572,531 4,127,524

15,648,069

1,187,121

2,611,630

2,216,335

106,245

366,231

468,616

18,516

35,379

96,280

147,252

101,029

32,792

36,915

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

15,164,336

447,463

1,817,741

2,951,223

3,523,603

3,095,007

1,770,746

1,560,244

5,778,053 4,855,936 1,730,276 1,097,702 972,118 639,551

231,975 32,623 54,489 43,644 75,033 9,346

908,773 270,980 188,364 154,929 196,917 83,782

1,343,347 685,995 305,208 237,330 235,164 139,847

1,409,678 1,092,175 393,619 258,935 212,222 154,602

1,143,651 1,047,866 355,348 202,582 154,689 132,316

501,532 779,699 232,236 124,092 55,589 76,813

239,141 946,644 200,957 76,714 42,106 43,260

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

118,219,258

5,754,239

20,170,684

28,148,180

29,311,352

18,723,854

9,298,215

6,829,773

68,874,991 43,999,946 3,191,941 2,152,380

2,162,369 3,273,928 94,166 223,775

10,435,827 9,032,720 219,661 482,476

15,994,756 10,861,106 617,636 674,682

16,165,419 11,367,296 1,401,853 376,784

11,769,135 6,176,729 563,348 214,642

6,697,572 2,331,910 148,236 120,498

5,650,564 956,450 162,888 59,872

65,498,162 54,769,985 10,728,177

2,554,726 1,900,945 653,781

10,807,501 8,621,197 2,186,304

14,892,109 12,365,722 2,526,387

15,202,475 12,885,101 2,317,374

11,291,434 9,396,885 1,894,549

5,921,579 5,320,325 601,254

4,828,854 4,280,779 548,075

Number of consumer units Total spending of all CUs

Television Cable service and community antenna Television sets

25 to 34 35 to 44 45 to 54 19,439 24,070 23,712 $830,055,797 $1,213,166,993 $1,251,148,504

55 to 64 17,479 $826,731,880

65 to 74 11,230 $410,029,535

75+ 11,536 $297,205,660

57,642,924 9,605,494 4,226,664

38,471,454 5,361,159 2,658,731

19,147,712 2,157,171 1,187,348

14,306,832 1,087,960 577,377

3,803,782

4,502,909

2,287,652

826,865

427,524

544,945

728,670

313,748

110,166

46,144

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown฀and฀because฀of฀rounding.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 19

Table 7. Information Products and Services: Market shares by age, 2004 (percentage฀of฀total฀annual฀spending฀on฀information฀products฀and฀services฀accounted฀for฀by฀consumer฀unit฀age฀groups,฀2004)

Share of total consumer units Share of total before-tax income Share of total spending

total consumer units 100.0% 100.0 100.0

under 25 7.6% 3.2 4.3

25 to 34 16.7% 16.1 16.4

35 to 44 20.7% 24.9 24.0

45 to 54 20.4% 26.4 24.8

55 to 64 15.0% 16.8 16.4

65 to 74 9.7% 7.5 8.1

75+ 9.9% 5.1 5.9

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100.0 100.0 100.0

4.6 5.6 3.8

16.6 16.9 17.4

23.4 24.8 25.5

24.7 27.8 26.1

16.5 15.5 16.4

8.2 6.2 7.3

6.1 3.1 3.6

100.0

7.6

16.7

24.3

28.8

14.6

5.3

2.7

100.0

4.8

16.5

24.6

32.9

14.2

5.0

2.1

100.0

4.0

7.5

20.5

31.4

21.6

7.0

7.9

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

100.0

3.0

12.0

19.5

23.2

20.4

11.7

10.3

100.0 100.0 100.0 100.0 100.0 100.0

4.0 0.7 3.1 4.0 7.7 1.5

15.7 5.6 10.9 14.1 20.3 13.1

23.2 14.1 17.6 21.6 24.2 21.9

24.4 22.5 22.7 23.6 21.8 24.2

19.8 21.6 20.5 18.5 15.9 20.7

8.7 16.1 13.4 11.3 5.7 12.0

4.1 19.5 11.6 7.0 4.3 6.8

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100.0 100.0 100.0 100.0 100.0

4.9 3.1 7.4 3.0 10.4

17.1 15.2 20.5 6.9 22.4

23.8 23.2 24.7 19.3 31.3

24.8 23.5 25.8 43.9 17.5

15.8 17.1 14.0 17.6 10.0

7.9 9.7 5.3 4.6 5.6

5.8 8.2 2.2 5.1 2.8

Television Cable service and community antenna Television sets

100.0 100.0 100.0

3.9 3.5 6.1

16.5 15.7 20.4

22.7 22.6 23.5

23.2 23.5 21.6

17.2 17.2 17.7

9.0 9.7 5.6

7.4 7.8 5.1

Note:฀Numbers฀may฀not฀add฀to฀total฀because฀of฀rounding.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀ ฀

20฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

฀

฀

฀

Table 8. Information Products and Services: Average spending by income, 2004 (average฀annual฀spending฀on฀information฀products฀and฀services,฀by฀before-tax฀income฀of฀consumer฀units฀(CU),฀2004)฀

Number of consumer units (in 000s) Number of persons per CU Average before-tax income of CU Average spending of CU, total INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards Television Cable service and community antenna Television sets

total consumer units 116,282 2.5 $54,453.00 43,394.87

under $20,000 28,898 1.8 $10,923.47 18,865.37

$20,000– $39,999 27,297 2.3 $29,561.76 30,400.94

$40,000– $49,999 11,374 2.6 $44,645.00 38,204.07

$50,000– $69,999 18,069 2.8 $59,259.00 47,750.13

$70,000– $79,999 6,461 3.0 $74,437.00 55,012.03

$80,000– $99,999 9,246 3.1 $88,811.00 65,446.39

$100,000 or more 14,937 3.2 $155,901.00 93,525.67

2,007.46 297.12 139.46

1,080.77 109.82 49.35

1,593.26 183.75 95.69

1,939.73 271.34 133.84

2,309.85 343.82 174.61

2,556.95 413.66 207.42

2,928.30 507.75 228.39

3,429.73 648.94 271.08

134.57

54.05

71.46

120.25

144.05

179.95

235.88

322.75

19.06

5.09

13.47

12.53

22.50

21.56

35.49

45.87

4.03

1.34

3.13

4.72

2.66

4.73

7.99

9.24

130.41

60.31

88.61

118.49

137.24

159.13

196.58

289.77

49.69 41.76 14.88 9.44 8.36 5.50

17.32 23.83 5.84 5.70 3.96 2.59

29.11 30.38 10.22 9.66 6.15 2.91

38.65 37.35 16.67 11.22 8.66 5.89

52.09 43.10 15.27 9.65 8.60 7.70

61.85 49.55 18.53 13.64 9.89 5.68

83.37 56.62 23.77 12.76 12.86 6.82

129.31 86.41 31.98 10.82 16.92 12.03

1,016.66 592.31 378.39 27.45 18.51

593.41 411.43 160.32 5.38 16.28

856.23 541.84 278.60 16.08 19.71

1,010.59 613.05 350.25 27.34 19.95

1,167.40 654.90 468.69 21.16 22.65

1,277.30 693.55 545.87 25.84 12.04

1,420.51 729.83 616.27 52.65 21.76

1,582.77 814.07 675.13 78.20 15.37

563.27 471.01 92.26

317.24 283.26 33.98

464.66 409.03 55.64

539.31 475.56 63.75

661.39 543.18 118.21

706.86 593.79 113.07

803.46 634.57 168.89

908.25 702.44 205.81

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown. Source:฀Bureau฀of฀Labor฀Statistics,฀unpublished฀tables฀from฀the฀2004฀Consumer฀Expenditure฀Survey;฀calculations฀by฀New฀Strategist฀ ฀ ฀ ฀ ฀ ฀

฀

฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 21

Table 9. Information Products and Services: Indexed spending by income, 2004 (indexed฀average฀annual฀spending฀of฀consumer฀units฀(CU)฀on฀information฀products฀and฀services฀by฀before-tax฀income฀of฀consumer฀unit,฀2004;฀index฀deﬁnition:฀an฀index฀of฀100฀is฀the฀average฀for฀all฀consumer฀units;฀an฀index฀of฀132฀means฀that฀spending฀by฀consumer฀units฀in฀that฀group฀is฀32฀percent฀above฀the฀ average฀for฀all฀consumer฀units;฀an฀index฀of฀68฀indicates฀spending฀that฀is฀32฀percent฀below฀the฀average฀for฀all฀consumer฀units) total consumer units $43,395 100

under $20,000 $18,865 43

$20,000– $39,999 $30,401 70

$40,000– $49,999 $38,204 88

$50,000– $69,999 $47,750 110

$70,000– $79,999 $55,012 127

$80,000– $99,999 $65,446 151

$100,000 or more $93,526 216

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100 100 100

54 37 35

79 62 69

97 91 96

115 116 125

127 139 149

146 171 164

171 218 194

100

40

53

89

107

134

175

240

100

27

71

66

118

113

186

241

100

33

78

117

66

117

198

229

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

100

46

68

91

105

122

151

222

100 100 100 100 100 100

35 57 39 60 47 47

59 73 69 102 74 53

78 89 112 119 104 107

105 103 103 102 103 140

124 119 125 144 118 103

168 136 160 135 154 124

260 207 215 115 202 219

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100 100 100 100 100

58 69 42 20 88

84 91 74 59 106

99 104 93 100 108

115 111 124 77 122

126 117 144 94 65

140 123 163 192 118

156 137 178 285 83

Television Cable service and community antenna Television sets

100 100 100

56 60 37

82 87 60

96 101 69

117 115 128

125 126 123

143 135 183

161 149 223

Average spending of CU, total Average spending of CU, index

Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀ ฀ ฀

22฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

฀

฀

฀

Table 10. Information Products and Services: Total spending by income, 2004 (total฀annual฀spending฀on฀information฀products฀and฀services,฀by฀before-tax฀income฀group฀of฀consumer฀units฀(CU),฀2004;฀consumer฀units฀and฀dollars฀in฀ thousands) total consumer units 116,282 $5,046,042,273

under $20,000 28,898 $545,171,431

$20,000– $39,999 27,297 $829,854,379

$40,000– $49,999 11,374 $434,533,092

$50,000– $69,999 18,069 $862,797,099

$70,000– $79,999 6,461 $355,432,726

INFORMATION SPENDING 233,431,464 Computer 34,549,708 Computer information services 16,216,688 Computers and computer hardware, nonbusiness use 15,648,069 Computer software and accessories, nonbusiness use 2,216,335 Repair of computer systems for nonbusiness use 468,616

31,232,190 3,173,571 1,426,124

43,491,164 5,015,803 2,612,028

22,062,489 3,086,221 1,522,296

41,736,680 6,212,484 3,155,028

16,520,454 2,672,657 1,340,141

27,075,062 4,694,657 2,111,694

51,229,877 9,693,217 4,049,122

1,561,857

1,950,618

1,367,724

2,602,839

1,162,657

2,180,946

4,820,917

146,975 38,616

367,690 85,467

142,516 53,685

406,553 48,064

139,299 30,561

328,141 73,876

685,160 138,018

Number of consumer units Total spending of all CUs

$80,000– $100,000 $99,999 or more 9,246 14,937 $605,117,322 $1,396,992,933

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

15,164,336

1,742,829

2,418,883

1,347,705

2,479,790

1,028,139

1,817,579

4,328,294

5,778,053 4,855,936 1,730,276 1,097,702 972,118 639,551

500,480 688,768 168,689 164,848 114,432 74,884

794,667 829,262 278,925 263,648 167,905 79,358

439,605 424,819 189,605 127,616 98,499 66,993

941,214 778,774 275,914 174,366 155,393 139,131

399,613 320,143 119,722 88,128 63,899 36,698

770,839 523,509 219,777 117,979 118,904 63,058

1,931,503 1,290,706 477,685 161,618 252,734 179,692

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

118,219,258

17,148,243

23,372,567

11,494,451

21,093,751

8,252,635

13,134,035

23,641,835

68,874,991 43,999,946 3,191,941 2,152,380

11,889,386 4,633,058 155,431 470,367

14,790,672 7,604,976 438,987 537,932

6,972,831 3,983,744 310,965 226,911

11,833,388 8,468,760 382,340 409,263

4,481,027 3,526,866 166,952 77,790

6,748,008 5,698,032 486,802 201,193

12,159,764 10,084,417 1,168,073 229,582

65,498,162 54,769,985 10,728,177

9,167,547 8,185,583 981,964

12,683,910 11,165,195 1,518,715

6,134,112 5,409,019 725,093

11,950,656 9,814,719 2,135,936

4,567,022 3,836,477 730,545

7,428,791 5,867,234 1,561,557

13,566,530 10,492,346 3,074,184

Television Cable service and community antenna Television sets

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown฀and฀because฀of฀rounding.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 23

Table 11. Information Products and Services: Market shares by income, 2004 (percentage฀of฀total฀annual฀spending฀on฀information฀products฀and฀services฀accounted฀for฀by฀before-tax฀income฀group฀of฀consumer฀units,฀2004)฀

Share of total consumer units Share of total before-tax income Share of total spending

total consumer units 100.0% 100.0 100.0

under $20,000 24.9% 5.0 10.8

$20,000– $39,999 23.5% 12.7 16.4

$40,000– $49,999 9.8% 8.0 8.6

$50,000– $69,999 15.5% 16.9 17.1

$70,000– $79,999 5.6% 7.6 7.0

$80,000– $99,999 8.0% 13.0 12.0

$100,000 or more 12.8% 36.8 27.7

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100.0 100.0 100.0

13.4 9.2 8.8

18.6 14.5 16.1

9.5 8.9 9.4

17.9 18.0 19.5

7.1 7.7 8.3

11.6 13.6 13.0

21.9 28.1 25.0

100.0

10.0

12.5

8.7

16.6

7.4

13.9

30.8

100.0

6.6

16.6

6.4

18.3

6.3

14.8

30.9

100.0

8.2

18.2

11.5

10.3

6.5

15.8

29.5

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

100.0

11.5

16.0

8.9

16.4

6.8

12.0

28.5

100.0 100.0 100.0 100.0 100.0 100.0

8.7 14.2 9.7 15.0 11.8 11.7

13.8 17.1 16.1 24.0 17.3 12.4

7.6 8.7 11.0 11.6 10.1 10.5

16.3 16.0 15.9 15.9 16.0 21.8

6.9 6.6 6.9 8.0 6.6 5.7

13.3 10.8 12.7 10.7 12.2 9.9

33.4 26.6 27.6 14.7 26.0 28.1

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100.0 100.0 100.0 100.0 100.0

14.5 17.3 10.5 4.9 21.9

19.8 21.5 17.3 13.8 25.0

9.7 10.1 9.1 9.7 10.5

17.8 17.2 19.2 12.0 19.0

7.0 6.5 8.0 5.2 3.6

11.1 9.8 13.0 15.3 9.3

20.0 17.7 22.9 36.6 10.7

Television Cable service and community antenna Television sets

100.0 100.0 100.0

14.0 14.9 9.2

19.4 20.4 14.2

9.4 9.9 6.8

18.2 17.9 19.9

7.0 7.0 6.8

11.3 10.7 14.6

20.7 19.2 28.7

Note:฀Numbers฀may฀not฀add฀to฀total฀because฀of฀rounding.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀ ฀

24฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

฀

฀

฀

Table 12. Information Products and Services: Average spending by high-income consumer units, 2004 (average฀annual฀spending฀on฀information฀products฀and฀services,฀by฀before-tax฀income฀of฀consumer฀units฀(CU)฀with฀high฀incomes,฀2004)฀

Number of consumer units (in 000s) Number of persons per CU Average before-tax income of CU Average spending of CU, total INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards Television Cable service and community antenna Television sets

total consumer units 116,282 2.5 $54,453.00 43,394.87

$100,000 or more 14,937 3.2 $155,901.00 93,525.67

$100,000– $119,999 5,625 3.1 $108,751.00 75,213.14

$120,000– $149,999 4,245 3.3 $132,292.00 87,298.57

$150,000 or more 5,067 3.2 $228,021.00 119,448.79

2,007.46 297.12 139.46 134.57 19.06 4.03

3,429.73 648.94 271.08 322.75 45.87 9.24

3,039.58 551.20 237.53 273.03 35.12 5.52

3,351.08 631.80 270.69 295.02 55.11 10.98

3,936.56 771.77 308.64 401.18 50.05 11.90

130.41 49.69 41.76 14.88 9.44 8.36 5.50

289.77 129.31 86.41 31.98 10.82 16.92 12.03

227.43 95.45 70.68 24.51 12.65 15.73 8.34

297.77 138.67 90.77 32.71 8.83 14.57 11.67

352.86 159.05 100.21 39.66 10.46 20.23 16.42

1,016.66 592.31 378.39 27.45 18.51

1,582.77 814.07 675.13 78.20 15.37

1,465.18 729.10 656.23 63.13 16.72

1,538.49 797.57 680.12 44.98 15.82

1,757.71 922.21 691.93 130.08 13.49

563.27 471.01 92.26

908.25 702.44 205.81

795.77 645.16 150.61

883.02 707.30 175.72

1,054.22 761.94 292.28

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown.฀ Source:฀Bureau฀of฀Labor฀Statistics,฀unpublished฀tables฀from฀the฀2004฀Consumer฀Expenditure฀Survey฀

฀

฀

฀

฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 25

Table 13. Information Products and Services: Indexed spending by high-income consumer units, 2004 (indexed฀average฀annual฀spending฀of฀consumer฀units฀(CU)฀with฀high฀incomes฀on฀information฀products฀and฀services,฀by฀before-tax฀income฀of฀consumer฀unit,฀ 2004;฀index฀deﬁnition:฀an฀index฀of฀100฀is฀the฀average฀for฀all฀consumer฀units;฀an฀index฀of฀132฀means฀that฀spending฀by฀consumer฀units฀in฀that฀group฀is฀32฀ percent฀above฀the฀average฀for฀all฀consumer฀units;฀an฀index฀of฀68฀indicates฀spending฀that฀is฀32฀percent฀below฀the฀average฀for฀all฀consumer฀units) total consumer units $43,395 100

$100,000 or more $93,526 216

$100,000– $119,999 $75,213 173

$120,000– $149,999 $87,299 201

$150,000 or more $119,449 275

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100 100 100 100 100 100

171 218 194 240 241 229

151 186 170 203 184 137

167 213 194 219 289 272

196 260 221 298 263 295

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

100 100 100 100 100 100 100

222 260 207 215 115 202 219

174 192 169 165 134 188 152

228 279 217 220 94 174 212

271 320 240 267 111 242 299

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100 100 100 100 100

156 137 178 285 83

144 123 173 230 90

151 135 180 164 85

173 156 183 474 73

Television Cable service and community antenna Television sets

100 100 100

161 149 223

141 137 163

157 150 190

187 162 317

Average spending of CU, total Average spending of CU, index

Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀ ฀

26฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

฀

฀

฀

Table 14. Information Products and Services: Total spending by high-income consumer units, 2004 (total฀annual฀spending฀on฀information฀products฀and฀services,฀by฀before-tax฀income฀group฀of฀consumer฀units฀(CU)฀with฀high฀incomes,฀2004;฀consumer฀units฀ and฀dollars฀in฀thousands)฀ total consumer units 116,282 $5,046,042,273

$100,000 or more 14,937 $1,396,992,933

$100,000– $119,999 5,625 $423,073,913

$120,000– $149,999 4,245 $370,582,430

$150,000 or more 5,067 $605,247,019

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

233,431,464 34,549,708 16,216,688 15,648,069 2,216,335 468,616

51,229,877 9,693,217 4,049,122 4,820,917 685,160 138,018

17,097,638 3,100,500 1,336,106 1,535,794 197,550 31,050

14,225,335 2,681,991 1,149,079 1,252,360 233,942 46,610

19,946,550 3,910,559 1,563,879 2,032,779 253,603 60,297

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

15,164,336 5,778,053 4,855,936 1,730,276 1,097,702 972,118 639,551

4,328,294 1,931,503 1,290,706 477,685 161,618 252,734 179,692

1,279,294 536,906 397,575 137,869 71,156 88,481 46,913

1,264,034 588,654 385,319 138,854 37,483 61,850 49,539

1,787,942 805,906 507,764 200,957 53,001 102,505 83,200

118,219,258 68,874,991 43,999,946 3,191,941 2,152,380

23,641,835 12,159,764 10,084,417 1,168,073 229,582

8,241,638 4,101,188 3,691,294 355,106 94,050

6,530,890 3,385,685 2,887,109 190,940 67,156

8,906,317 4,672,838 3,506,009 659,115 68,354

65,498,162 54,769,985 10,728,177

13,566,530 10,492,346 3,074,184

4,476,206 3,629,025 847,181

3,748,420 3,002,489 745,931

5,341,733 3,860,750 1,480,983

Number of consumer units Total spending of all CUs

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards Television Cable service and community antenna Television sets

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown฀and฀because฀of฀rounding. Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 27

Table 15. Information Products and Services: Market shares by high-income consumer units, 2004 (percentage฀of฀total฀annual฀spending฀on฀information฀products฀and฀services฀accounted฀for฀by฀before-tax฀income฀group฀of฀consumer฀units฀with฀high฀incomes,฀ 2004)฀

Share of total consumer units Share of total before-tax income Share of total spending

total consumer units 100.0% 100.0 100.0

$100,000 or more 12.8% 36.8 27.7

$100,000– $119,999 4.8% 9.7 8.4

$120,000– $149,999 3.7% 8.9 7.3

$150,000 or more 4.4% 18.2 12.0

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100.0 100.0 100.0 100.0 100.0 100.0

21.9 28.1 25.0 30.8 30.9 29.5

7.3 9.0 8.2 9.8 8.9 6.6

6.1 7.8 7.1 8.0 10.6 9.9

8.5 11.3 9.6 13.0 11.4 12.9

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

100.0 100.0 100.0 100.0 100.0 100.0 100.0

28.5 33.4 26.6 27.6 14.7 26.0 28.1

8.4 9.3 8.2 8.0 6.5 9.1 7.3

8.3 10.2 7.9 8.0 3.4 6.4 7.7

11.8 13.9 10.5 11.6 4.8 10.5 13.0

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100.0 100.0 100.0 100.0 100.0

20.0 17.7 22.9 36.6 10.7

7.0 6.0 8.4 11.1 4.4

5.5 4.9 6.6 6.0 3.1

7.5 6.8 8.0 20.6 3.2

Television Cable service and community antenna Television sets

100.0 100.0 100.0

20.7 19.2 28.7

6.8 6.6 7.9

5.7 5.5 7.0

8.2 7.0 13.8

Note:฀Numbers฀may฀not฀add฀to฀total฀because฀of฀rounding.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey

28฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

Table 16. Information Products and Services: Average spending by household type, 2004 (average฀annual฀spending฀of฀consumer฀units฀(CU)฀on฀information฀products฀and฀services,฀by฀type฀of฀consumer฀unit,฀2004)฀

Number of consumer units (in 000s) Number of persons per CU Average before-tax income of CU Average spending of CU, total

total 29,279 3.9 $79,764.00 60,660.88

oldest child 6 to 17 15,376 4.1 $78,508.00 60,577.88

oldest child 18 or older 8,300 3.9 $85,109.00 64,161.69

single parent, at least one child <18 6,892 2.9 $31,055.00 32,824.46

single person 33,686 1.0 $28,143.00 25,423.35

2,177.83 315.72 156.45

2,655.81 445.70 201.48

2,341.03 346.38 177.18

2,580.48 443.37 201.81

3,014.08 517.06 217.28

1,750.59 216.93 112.80

1,311.74 178.42 80.43

172.48

134.13

210.54

152.09

206.14

258.15

90.28

81.89

24.26 5.43

20.92 4.22

27.31 6.37

15.82 1.29

28.61 6.81

32.66 8.97

10.78 3.07

14.43 1.67

130.41

165.69

186.06

153.02

139.38

157.63

153.69

68.13

97.45

49.69 41.76 14.88 9.44 8.36 5.50

62.51 55.99 19.17 9.98 9.97 7.62

61.32 72.20 24.93 9.50 9.21 8.49

65.58 43.84 15.08 10.37 10.70 6.99

58.22 33.08 16.37 9.28 11.96 10.47

71.63 42.10 15.69 10.02 10.32 7.02

59.34 54.34 13.08 11.74 10.55 4.59

30.07 12.62 5.95 8.50 7.56 3.32

37.13 30.11 10.28 8.78 6.01 3.28

1,016.66 592.31 378.39 27.45 18.51

1,218.71 697.22 461.63 40.85 19.01

1,036.07 637.39 361.27 24.38 13.03

1,359.88 732.44 546.01 60.45 20.98

1,173.65 655.64 484.38 8.72 24.91

1,309.92 721.23 506.46 62.09 20.14

1,584.37 805.04 660.88 98.56 19.89

987.32 587.72 367.57 8.79 23.24

645.99 405.04 217.16 12.23 11.56

563.27 471.01 92.26

667.33 551.35 115.98

639.98 529.13 110.85

697.21 569.84 127.37

681.62 508.57 173.05

669.56 561.52 108.04

758.96 626.61 132.35

478.21 430.53 47.68

389.88 334.69 55.19

INFORMATION SPENDING 2,007.46 Computer 297.12 Computer information services 139.46 Computers and computer hardware, nonbusiness use 134.57 Computer software and accessories, nonbusiness use 19.06 Repair of computer systems for nonbusiness use 4.03 Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards Television Cable service and community antenna Television sets

total married couples 59,797 3.2 $73,001.00 55,606.57

married couples, no children 25,585 2.0 $64,434.00 49,690.43

2,431.80 380.07 177.90

married couples with children oldest child under 6 5,604 3.5 $75,293.00 55,981.04

total consumer units 116,282 2.5 $54,453.00 43,394.87

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown.฀ Source:฀Bureau฀of฀Labor฀Statistics,฀unpublished฀data฀from฀the฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀

฀

฀

฀

฀

฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 29

Table 17. Information Products and Services: Indexed spending by household type, 2004 (indexed฀average฀annual฀spending฀of฀consumer฀units฀(CU)฀on฀information฀products฀and฀services฀by฀type฀of฀consumer฀unit,฀2004;฀index฀deﬁnition:฀an฀index฀ of฀100฀is฀the฀average฀for฀all฀consumer฀units;฀an฀index฀of฀132฀means฀that฀spending฀by฀consumer฀units฀in฀that฀group฀is฀32฀percent฀above฀the฀average฀for฀all฀ consumer฀units;฀an฀index฀of฀68฀indicates฀spending฀that฀is฀32฀percent฀below฀the฀average฀for฀all฀consumer฀units)

total consumer units

total married couples

married couples, no children

$43,395 100

$55,607 128

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100 100 100

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

married couples with children total

oldest child under 6

oldest child 6 to 17

oldest child 18 or older

single parent, at least one child <18

single person

$49,690 115

$60,661 140

$55,981 129

$60,578 140

$64,162 148

$32,824 76

25,423 59

121 128 128

108 106 112

132 150 144

117 117 127

129 149 145

150 174 156

87 73 81

65 60 58

100

128

100

156

113

153

192

67

61

100 100

127 135

110 105

143 158

83 32

150 169

171 223

57 76

76 41

100

127

143

117

107

121

118

52

75

100 100 100 100 100 100

126 134 129 106 119 139

123 173 168 101 110 154

132 105 101 110 128 127

117 79 110 98 143 190

144 101 105 106 123 128

119 130 88 124 126 83

61 30 40 90 90 60

75 72 69 93 72 60

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100 100 100 100 100

120 118 122 149 103

102 108 95 89 70

134 124 144 220 113

115 111 128 32 135

129 122 134 226 109

156 136 175 359 107

97 99 97 32 126

64 68 57 45 62

Television Cable service and community antenna Television sets

100 100 100

118 117 126

114 112 120

124 121 138

121 108 188

119 119 117

135 133 143

85 91 52

69 71 60

Average spending of CU, total Average spending of CU, index

Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀ ฀ ฀

30฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

฀

฀

฀

Table 18. Information Products and Services: Total spending by household type, 2004 (total฀annual฀spending฀on฀information฀products฀and฀services,฀by฀consumer฀unit฀(CU)฀type,฀2004;฀consumer฀units฀and฀dollars฀in฀thousands)

Number of consumer units Total spending of all CUs INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

total married couples 59,797

total 29,279

oldest child 6 to 17 15,376

oldest child 18 or older 8,300

single parent, at least one child <18 6,892

single person 33,686

$5,046,042,273 $3,325,106,066 $1,271,329,652 $1,776,089,906

$313,717,748

$931,445,483

$532,542,027

$226,226,178

$856,410,968

233,431,464 145,414,345 34,549,708 22,727,046 16,216,688 10,637,886

married couples, no children 25,585

married couples with children oldest child under 6 5,604

total consumer units 116,282

55,719,781 8,077,696 4,002,773

77,759,461 13,049,650 5,899,133

13,119,132 1,941,114 992,917

39,677,460 6,817,257 3,103,031

25,016,864 4,291,598 1,803,424

12,065,066 1,495,082 777,418

44,187,274 6,010,256 2,709,365

15,648,069

10,313,787

3,431,716

6,164,401

852,312

3,169,609

2,142,645

622,210

2,758,547

2,216,335

1,450,675

535,238

799,609

88,655

439,907

271,078

74,296

486,089

468,616

324,698

107,969

186,507

7,229

104,711

74,451

21,158

56,256

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

15,164,336

9,907,765

4,760,345

4,480,273

781,086

2,423,719

1,275,627

469,552

3,282,701

5,778,053 4,855,936 1,730,276 1,097,702 972,118 639,551

3,737,910 3,348,034 1,146,308 596,774 596,176 455,653

1,568,872 1,847,237 637,834 243,058 235,638 217,217

1,920,117 1,283,591 441,527 303,623 313,285 204,660

326,265 185,380 91,737 52,005 67,024 58,674

1,101,383 647,330 241,249 154,068 158,680 107,940

492,522 451,022 108,564 97,442 87,565 38,097

207,242 86,977 41,007 58,582 52,104 22,881

1,250,761 1,014,285 346,292 295,763 202,453 110,490

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

118,219,258

72,875,202

26,507,851

39,815,927

6,577,135

20,141,330

13,150,271

6,804,609

21,760,819

68,874,991 43,999,946 3,191,941 2,152,380

41,691,664 27,604,089 2,442,707 1,136,741

16,307,623 9,243,093 623,762 333,373

21,445,111 15,986,627 1,769,916 614,273

3,674,207 2,714,466 48,867 139,596

11,089,632 7,787,329 954,696 309,673

6,681,832 5,485,304 818,048 165,087

4,050,566 2,533,292 60,581 160,170

13,644,177 7,315,252 411,980 389,410

65,498,162 54,769,985 10,728,177

39,904,332 32,969,076 6,935,256

16,373,888 13,537,791 2,836,097

20,413,612 16,684,345 3,729,266

3,819,798 2,850,026 969,772

10,295,155 8,633,932 1,661,223

6,299,368 5,200,863 1,098,505

3,295,823 2,967,213 328,611

13,133,498 11,274,367 1,859,130

Television Cable service and community antenna Television sets

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀types฀of฀consumer฀units฀are฀shown,฀because฀not฀all฀categories฀are฀shown,฀and฀because฀of฀rounding. Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 31

Table 19. Information Products and Services: Market shares by household type, 2004 (percentage฀of฀total฀annual฀spending฀on฀information฀products฀and฀services฀accounted฀for฀by฀types฀of฀consumer฀units,฀2004)฀

total consumer units

total married couples

married couples, no children

married couples with children total

oldest child under 6

oldest child 6 to 17

oldest child 18 or older

single parent, at least one child <18

single person

Share of total consumer units Share of total before-tax income Share of total spending

100.0% 100.0 100.0

51.4% 68.9 65.9

22.0% 26.0 25.2

25.2% 36.9 35.2

4.8% 6.7 6.2

13.2% 19.1 18.5

7.1% 11.2 10.6

5.9% 3.4 4.5

29.0% 15.0 17.0

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100.0 100.0 100.0

62.3 65.8 65.6

23.9 23.4 24.7

33.3 37.8 36.4

5.6 5.6 6.1

17.0 19.7 19.1

10.7 12.4 11.1

5.2 4.3 4.8

18.9 17.4 16.7

100.0

65.9

21.9

39.4

5.4

20.3

13.7

4.0

17.6

100.0 100.0

65.5 69.3

24.1 23.0

36.1 39.8

4.0 1.5

19.8 22.3

12.2 15.9

3.4 4.5

21.9 12.0

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

100.0

65.3

31.4

29.5

5.2

16.0

8.4

3.1

21.6

100.0 100.0 100.0 100.0 100.0 100.0

64.7 68.9 66.3 54.4 61.3 71.2

27.2 38.0 36.9 22.1 24.2 34.0

33.2 26.4 25.5 27.7 32.2 32.0

5.6 3.8 5.3 4.7 6.9 9.2

19.1 13.3 13.9 14.0 16.3 16.9

8.5 9.3 6.3 8.9 9.0 6.0

3.6 1.8 2.4 5.3 5.4 3.6

21.6 20.9 20.0 26.9 20.8 17.3

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100.0 100.0 100.0 100.0 100.0

61.6 60.5 62.7 76.5 52.8

22.4 23.7 21.0 19.5 15.5

33.7 31.1 36.3 55.4 28.5

5.6 5.3 6.2 1.5 6.5

17.0 16.1 17.7 29.9 14.4

11.1 9.7 12.5 25.6 7.7

5.8 5.9 5.8 1.9 7.4

18.4 19.8 16.6 12.9 18.1

Television Cable service and community antenna Television sets

100.0 100.0 100.0

60.9 60.2 64.6

25.0 24.7 26.4

31.2 30.5 34.8

5.8 5.2 9.0

15.7 15.8 15.5

9.6 9.5 10.2

5.0 5.4 3.1

20.1 20.6 17.3

Note:฀Market฀shares฀by฀type฀of฀consumer฀unit฀will฀not฀add฀to฀total฀because฀not฀all฀types฀of฀consumer฀units฀are฀shown. Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀ ฀ ฀

32฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

฀

฀

฀

Table 20. Information Products and Services: Average spending by race and Hispanic origin, 2004 (average฀annual฀spending฀of฀consumer฀units฀(CU)฀on฀information฀products฀and฀services,฀by฀race฀and฀Hispanic฀origin฀of฀consumer฀unit฀reference฀person,฀ 2004)฀

Number of consumer units (in 000s) Number of persons per CU Average before-tax income of CU Average spending of CU, total INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards Television Cable service and community antenna Television sets

total consumer units 116,282 2.5 $54,453.00 43,394.87

Asian 3,957 2.8 $67,705.00 49,458.68

black 13,773 2.6 $38,503.00 30,481.49

Hispanic 12,298 3.3 $43,693.00 37,578.03

non-Hispanic white and other 90,424 2.3 $58,314.00 46,163.26

2,007.46 297.12 139.46 134.57 19.06 4.03

2,056.05 390.75 175.39 182.89 29.00 3.47

1,778.86 143.71 82.14 51.50 7.56 2.51

1,773.82 217.54 89.38 113.01 13.11 2.04

2,074.32 330.78 154.85 149.83 21.58 4.52

130.41 49.69 41.76 14.88 9.44 8.36 5.50

112.48 58.91 30.50 10.77 4.18 5.98 2.14

53.33 17.91 16.18 3.96 8.31 5.34 1.60

53.17 18.90 12.16 5.32 5.86 4.03 4.03

152.45 58.61 49.59 17.83 10.10 9.41 6.29

1,016.66 592.31 378.39 27.45 18.51

1,084.68 552.53 468.23 8.74 55.18

1,054.50 688.72 316.03 30.32 19.43

1,058.82 584.51 389.44 29.16 55.71

1,006.57 578.55 386.43 28.27 13.32

563.27 471.01 92.26

468.14 361.28 106.86

527.32 469.02 58.30

444.29 349.92 94.37

584.52 487.55 96.97

Note:฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀ of฀any฀race฀who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀ Asian฀(who฀are฀also฀included฀in฀the฀“Asian”฀column),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown. Source:฀Bureau฀of฀Labor฀Statistics,฀unpublished฀tables฀from฀the฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 33

Table 21. Information Products and Services: Indexed spending by race and Hispanic origin, 2004 (indexed฀average฀annual฀spending฀of฀consumer฀units฀(CU)฀on฀information฀products฀and฀services฀by฀race฀and฀Hispanic฀origin฀of฀consumer฀unit฀reference฀ person,฀2004;฀index฀deﬁnition:฀an฀index฀of฀100฀is฀the฀average฀for฀all฀consumer฀units;฀an฀index฀of฀132฀means฀that฀spending฀by฀consumer฀units฀in฀that฀group฀ is฀32฀percent฀above฀the฀average฀for฀all฀consumer฀units;฀an฀index฀of฀68฀indicates฀spending฀that฀is฀32฀percent฀below฀the฀average฀for฀all฀consumer฀units) total consumer units $43,395 100

Asian $49,459 114

black $30,481 70

Hispanic $37,578 87

non-Hispanic white and other $46,163 106

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100 100 100 100 100 100

102 132 126 136 152 86

89 48 59 38 40 62

88 73 64 84 69 51

103 111 111 111 113 112

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

100 100 100 100 100 100 100

86 119 73 72 44 72 39

41 36 39 27 88 64 29

41 38 29 36 62 48 73

117 118 119 120 107 113 114

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100 100 100 100 100

107 93 124 32 298

104 116 84 110 105

104 99 103 106 301

99 98 102 103 72

Television Cable service and community antenna Television sets

100 100 100

83 77 116

94 100 63

79 74 102

104 104 105

Average spending of CU, total Average spending of CU, index

Note:฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀ of฀any฀race฀who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀ Asian฀(who฀are฀also฀included฀in฀the฀“Asian”฀column),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀ ฀

34฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

Table 22. Information Products and Services: Total spending by race and Hispanic origin, 2004 (total฀annual฀spending฀on฀information฀products฀and฀services,฀by฀consumer฀unit฀race฀and฀Hispanic฀origin฀groups,฀2004;฀consumer฀units฀and฀dollars฀in฀ thousands)฀ total consumer units 116,282 $5,046,042,273

Asian 3,957 $195,707,997

black 13,773 $419,821,562

Hispanic 12,298 $462,134,613

non-Hispanic white and other 90,424 $4,174,266,622

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

233,431,464 34,549,708 16,216,688 15,648,069 2,216,335 468,616

8,135,790 1,546,198 694,018 723,696 114,753 13,731

24,500,239 1,979,318 1,131,314 709,310 104,124 34,570

21,814,438 2,675,307 1,099,195 1,389,797 161,227 25,088

187,568,312 29,910,451 14,002,156 13,548,228 1,951,350 408,716

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

15,164,336 5,778,053 4,855,936 1,730,276 1,097,702 972,118 639,551

445,083 233,107 120,689 42,617 16,540 23,663 8,468

734,514 246,674 222,847 54,541 114,454 73,548 22,037

653,885 232,432 149,544 65,425 72,066 49,561 49,561

13,785,139 5,299,751 4,484,126 1,612,260 913,282 850,890 568,767

118,219,258 68,874,991 43,999,946 3,191,941 2,152,380

4,292,079 2,186,361 1,852,786 34,584 218,347

14,523,629 9,485,741 4,352,681 417,597 267,609

13,021,368 7,188,304 4,789,333 358,610 685,122

91,018,086 52,314,805 34,942,546 2,556,286 1,204,448

65,498,162 54,769,985 10,728,177

1,852,430 1,429,585 422,845

7,262,778 6,459,812 802,966

5,463,878 4,303,316 1,160,562

52,854,636 44,086,221 8,768,415

Number of consumer units Total spending of all consumer units

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards Television Cable service and community antenna Television sets

Note:฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀ of฀any฀race฀who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀ Asian฀(who฀are฀also฀included฀in฀the฀“Asian”฀column),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Numbers฀may฀not฀add฀to฀total฀because฀of฀rounding฀and฀missing฀subcategories. Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 35

Table 23. Information Products and Services: Market shares by race and Hispanic origin, 2004 (percentage฀of฀total฀annual฀spending฀on฀information฀products฀and฀services฀accounted฀for฀by฀consumer฀unit฀race฀and฀Hispanic฀origin฀groups,฀2004)

Share of total consumer units Share of total before-tax income Share of total spending

total consumer units 100.0% 100.0 100.0

Asian 3.4% 4.2 3.9

black 11.8% 8.4 8.3

Hispanic 10.6% 8.5 9.2

non-Hispanic white and other 77.8% 83.3 82.7

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100.0 100.0 100.0 100.0 100.0 100.0

3.5 4.5 4.3 4.6 5.2 2.9

10.5 5.7 7.0 4.5 4.7 7.4

9.3 7.7 6.8 8.9 7.3 5.4

80.4 86.6 86.3 86.6 88.0 87.2

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

100.0 100.0 100.0 100.0 100.0 100.0 100.0

2.9 4.0 2.5 2.5 1.5 2.4 1.3

4.8 4.3 4.6 3.2 10.4 7.6 3.4

4.3 4.0 3.1 3.8 6.6 5.1 7.7

90.9 91.7 92.3 93.2 83.2 87.5 88.9

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100.0 100.0 100.0 100.0 100.0

3.6 3.2 4.2 1.1 10.1

12.3 13.8 9.9 13.1 12.4

11.0 10.4 10.9 11.2 31.8

77.0 76.0 79.4 80.1 56.0

Television Cable service and community antenna Television sets

100.0 100.0 100.0

2.8 2.6 3.9

11.1 11.8 7.5

8.3 7.9 10.8

80.7 80.5 81.7

Note:฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀ of฀any฀race฀who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀ Asian฀(who฀are฀also฀included฀in฀the฀“Asian”฀column),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey

36฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

Table 24. Information Products and Services: Average spending by region, 2004 (average฀annual฀spending฀of฀consumer฀units฀(CU)฀on฀information฀products฀and฀services,฀by฀region฀in฀which฀consumer฀unit฀lives,฀2004)

Number of consumer units (in 000s) Number of persons per CU Average before-tax income of CU Average spending of CU, total INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards Television Cable service and community antenna Television sets

total consumer units 116,282 2.5 $54,453.00 43,394.87

Northeast 22,051 2.4 $61,050.00 46,114.89

Midwest 26,539 2.4 $53,567.00 43,370.77

South 41,801 2.5 $50,775.00 39,173.65

West 25,891 2.6 $55,682.00 47,921.74

2,007.46 297.12 139.46 134.57 19.06 4.03

2,103.77 294.32 139.72 134.24 16.59 3.77

1,921.44 284.11 135.87 127.47 17.59 3.18

1,975.97 254.13 128.39 106.36 15.68 3.70

2,064.54 382.21 160.78 187.65 28.13 5.65

130.41 49.69 41.76 14.88 9.44 8.36 5.50

144.78 47.43 50.94 16.67 17.01 8.25 4.22

150.39 53.90 51.34 16.56 10.33 9.87 7.22

97.73 36.88 31.13 11.13 7.11 6.97 4.38

150.48 67.98 41.28 17.69 5.86 9.14 6.65

1,016.66 592.31 378.39 27.45 18.51

1,031.80 637.95 331.07 45.05 17.73

958.62 551.69 378.26 13.93 14.74

1,056.66 634.77 378.50 26.02 17.37

998.76 526.52 418.63 28.71 24.90

563.27 471.01 92.26

632.87 534.03 98.84

528.32 446.17 82.15

567.45 484.69 82.76

533.09 420.73 112.36

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown. Source:฀Bureau฀of฀Labor฀Statistics,฀unpublished฀data฀from฀the฀2004฀Consumer฀Expenditure฀Survey฀

฀

฀

฀

฀

฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 37

Table 25. Information Products and Services: Indexed spending by region, 2004 (indexed฀average฀annual฀spending฀of฀consumer฀units฀(CU)฀on฀information฀products฀and฀services฀by฀region฀in฀which฀consumer฀unit฀lives,฀2004;฀index฀deﬁnition:฀an฀index฀of฀100฀is฀the฀average฀for฀all฀consumer฀units;฀an฀index฀of฀132฀means฀that฀spending฀by฀consumer฀units฀in฀that฀group฀is฀32฀percent฀above฀the฀ average฀for฀all฀consumer฀units;฀an฀index฀of฀68฀indicates฀spending฀that฀is฀32฀percent฀below฀the฀average฀for฀all฀consumer฀units) total consumer units $43,395 100

Northeast $46,115 106

Midwest $43,371 100

South $39,174 90

West $47,922 110

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100 100 100 100 100 100

105 99 100 100 87 94

96 96 97 95 92 79

98 86 92 79 82 92

103 129 115 139 148 140

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

100 100 100 100 100 100 100

111 95 122 112 180 99 77

115 108 123 111 109 118 131

75 74 75 75 75 83 80

115 137 99 119 62 109 121

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100 100 100 100 100

101 108 87 164 96

94 93 100 51 80

104 107 100 95 94

98 89 111 105 135

Television Cable service and community antenna Television sets

100 100 100

112 113 107

94 95 89

101 103 90

95 89 122

Average spending of CU, total Average spending of CU, index

Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey

38฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

Table 26. Information Products and Services: Total spending by region, 2004 (total฀annual฀spending฀on฀information฀products฀and฀services,฀by฀region฀in฀which฀consumer฀unit฀lives,฀2004;฀consumer฀units฀and฀dollars฀in฀thousands)฀ total consumer units 116,282 $5,046,042,273

Northeast 22,051 $1,016,879,439

Midwest 26,539 $1,151,016,865

South 41,801 $1,637,497,744

West 25,891 $1,240,741,770

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

233,431,464 34,549,708 16,216,688 15,648,069 2,216,335 468,616

46,390,232 6,490,050 3,080,966 2,960,126 365,826 83,132

50,993,096 7,539,995 3,605,854 3,382,926 466,821 84,394

82,597,522 10,622,888 5,366,830 4,445,954 655,440 154,664

53,453,005 9,895,799 4,162,755 4,858,446 728,314 146,284

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

15,164,336 5,778,053 4,855,936 1,730,276 1,097,702 972,118 639,551

3,192,544 1,045,879 1,123,278 367,590 375,088 181,921 93,055

3,991,200 1,430,452 1,362,512 439,486 274,148 261,940 191,612

4,085,212 1,541,621 1,301,265 465,245 297,205 291,353 183,088

3,896,078 1,760,070 1,068,780 458,012 151,721 236,644 172,175

118,219,258 68,874,991 43,999,946 3,191,941 2,152,380

22,752,222 14,067,435 7,300,425 993,398 390,964

25,440,816 14,641,301 10,038,642 369,688 391,185

44,169,445 26,534,021 15,821,679 1,087,662 726,083

25,858,895 13,632,129 10,838,749 743,331 644,686

65,498,162 54,769,985 10,728,177

13,955,416 11,775,896 2,179,521

14,021,084 11,840,906 2,180,179

23,719,977 20,260,527 3,459,451

13,802,233 10,893,120 2,909,113

Number of consumer units Total spending of all consumer units

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards Television Cable service and community antenna Television sets

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown฀and฀because฀of฀rounding.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 39

Table 27. Information Products and Services: Market shares by region, 2004 (percentage฀of฀total฀annual฀spending฀on฀information฀products฀and฀services฀accounted฀for฀by฀consumer฀units฀by฀region,฀2004)฀

Share of total consumer units Share of total before-tax income Share of total spending

total consumer units 100.0% 100.0 100.0

Northeast 19.0% 21.3 20.2

Midwest 22.8% 22.5 22.8

South 35.9% 33.5 32.5

West 22.3% 22.8 24.6

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100.0 100.0 100.0 100.0 100.0 100.0

19.9 18.8 19.0 18.9 16.5 17.7

21.8 21.8 22.2 21.6 21.1 18.0

35.4 30.7 33.1 28.4 29.6 33.0

22.9 28.6 25.7 31.0 32.9 31.2

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

100.0 100.0 100.0 100.0 100.0 100.0 100.0

21.1 18.1 23.1 21.2 34.2 18.7 14.6

26.3 24.8 28.1 25.4 25.0 26.9 30.0

26.9 26.7 26.8 26.9 27.1 30.0 28.6

25.7 30.5 22.0 26.5 13.8 24.3 26.9

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100.0 100.0 100.0 100.0 100.0

19.2 20.4 16.6 31.1 18.2

21.5 21.3 22.8 11.6 18.2

37.4 38.5 36.0 34.1 33.7

21.9 19.8 24.6 23.3 30.0

Television Cable service and community antenna Television sets

100.0 100.0 100.0

21.3 21.5 20.3

21.4 21.6 20.3

36.2 37.0 32.2

21.1 19.9 27.1

Note:฀Numbers฀may฀not฀add฀to฀total฀because฀of฀rounding.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey

40฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

Table 28. Information Products and Services: Average spending by education, 2004 (average฀annual฀spending฀of฀consumer฀units฀(CU)฀on฀information฀products฀and฀services,฀by฀education฀of฀consumer฀unit฀reference฀person,฀2004) college graduate

Number of consumer units (in 000s) Number of persons per CU Average before-tax income of CU Average spending of CU, total INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards Television Cable service and community antenna Television sets

total consumer units 116,282 2.5 $54,453.00 43,394.87

less than high school graduate 16,829 2.7 $29,094.00 25,421.18

high school graduate 31,005 2.5 $42,334.00 35,438.55

some college 25,317 2.3 $46,756.00 40,877.68

associate’s degree 10,678 2.6 $58,593.00 48,177.36

total 32,452 2.5 $83,825.00 60,712.28

bachelor’s degree 20,684 2.4 $75,647.00 56,728.41

master’s, professional, doctorate 11,768 2.5 $98,201.00 67,801.38

2,007.46 297.12 139.46

1,340.65 91.02 45.31

1,758.04 196.01 103.88

1,955.00 317.71 142.09

2,233.09 338.83 170.36

2,558.56 470.79 210.06

2,471.07 439.44 206.68

2,713.70 525.89 215.98

134.57

42.87

78.20

151.79

143.81

219.50

194.12

264.11

19.06

1.98

11.45

19.70

19.42

34.56

32.01

39.06

4.03

0.86

2.48

4.13

5.24

6.67

6.63

6.74

130.41

44.62

85.33

116.30

130.43

228.97

193.02

292.29

49.69 41.76 14.88 9.44 8.36 5.50

7.63 21.23 3.81 6.05 2.54 1.26

20.55 35.40 8.86 10.04 6.16 4.16

40.92 37.26 14.10 9.72 8.96 5.05

48.81 41.16 14.93 10.74 9.54 4.97

106.47 62.18 26.96 10.00 12.61 9.51

84.91 53.56 24.43 9.95 12.40 7.52

144.37 77.32 31.40 10.08 12.99 12.99

1,016.66 592.31 378.39 27.45 18.51

803.48 543.67 199.12 26.90 33.79

936.31 583.50 321.31 16.15 15.35

964.27 537.84 382.41 28.16 15.86

1,139.62 607.78 486.51 29.61 15.72

1,204.73 663.35 487.18 37.60 16.60

1,177.14 641.83 491.78 29.16 14.37

1,254.44 701.16 479.10 53.66 20.52

563.27 471.01 92.26

401.53 344.36 57.17

540.39 467.55 72.84

556.72 463.87 92.85

624.21 511.20 113.01

654.07 532.35 121.72

661.47 541.82 119.65

641.08 515.72 125.36

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown.฀ Source:฀Bureau฀of฀Labor฀Statistics,฀unpublished฀data฀from฀the฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

฀

฀

฀

฀

฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 41

Table 29. Information Products and Services: Indexed spending by education, 2004 (indexed฀average฀annual฀spending฀of฀consumer฀units฀(CU)฀on฀information฀products฀and฀services฀by฀education฀of฀consumer฀unit฀reference฀person,฀2004;฀index฀ deﬁnition:฀an฀index฀of฀100฀is฀the฀average฀for฀all฀consumer฀units;฀an฀index฀of฀132฀means฀that฀spending฀by฀consumer฀units฀in฀that฀group฀is฀32฀percent฀above฀ the฀average฀for฀all฀consumer฀units;฀an฀index฀of฀68฀indicates฀spending฀that฀is฀32฀percent฀below฀the฀average฀for฀all฀consumer฀units) college graduate total consumer units $43,395 100

less than high school graduate $25,421 59

high school graduate $35,439 82

some college $40,878 94

associate’s degree $48,177 111

total $60,712 140

bachelor’s degree $56,728 131

master’s, professional, doctorate $67,801 156

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100 100 100

67 31 32

88 66 74

97 107 102

111 114 122

127 158 151

123 148 148

135 177 155

100

32

58

113

107

163

144

196

100

10

60

103

102

181

168

205

100

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

100

21

62

102

130

166

165

167

34

65

89

100

176

148

224

100 100 100 100 100 100

15 51 26 64 30 23

41 85 60 106 74 76

82 89 95 103 107 92

98 99 100 114 114 90

214 149 181 106 151 173

171 128 164 105 148 137

291 185 211 107 155 236

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100 100 100 100 100

79 92 53 98 183

92 99 85 59 83

95 91 101 103 86

112 103 129 108 85

118 112 129 137 90

116 108 130 106 78

123 118 127 195 111

Television Cable service and community antenna Television sets

100 100 100

71 73 62

96 99 79

99 98 101

111 109 122

116 113 132

117 115 130

114 109 136

Average spending of CU, total Average spending of CU, index

Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀ ฀

42฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

฀

฀

฀

Table 30. Information Products and Services: Total spending by education, 2004 (total฀annual฀spending฀on฀information฀products฀and฀services,฀by฀consumer฀unit฀(CU)฀educational฀attainment฀group,฀2004;฀consumer฀units฀and฀dollars฀in฀ thousands)฀ college graduate total consumer units Number of consumer units Total spending of all CUs

116,282 $5,046,042,273

less than high school graduate

high school graduate

some college

16,829 31,005 25,317 $427,813,038 $1,098,772,243 $1,034,900,225

bachelor’s degree

master’s, professional, doctorate

10,678 32,452 20,684 $514,437,850 $1,970,234,911 $1,173,370,432

11,768 $797,886,640

associate’s degree

total

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

233,431,464 34,549,708 16,216,688

22,561,799 1,531,776 762,522

54,508,030 6,077,290 3,220,799

49,494,735 8,043,464 3,597,293

23,844,935 3,618,027 1,819,104

83,030,389 15,278,077 6,816,867

51,111,612 9,089,377 4,274,969

31,934,822 6,188,674 2,541,653

15,648,069

721,459

2,424,591

3,842,867

1,535,603

7,123,214

4,015,178

3,108,046

2,216,335

33,321

355,007

498,745

207,367

1,121,541

662,095

459,658

468,616

14,473

76,892

104,559

55,953

216,455

137,135

79,316

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

15,164,336

750,910

2,645,657

2,944,367

1,392,732

7,430,534

3,992,426

3,439,669

5,778,053 4,855,936 1,730,276 1,097,702 972,118 639,551

128,405 357,280 64,118 101,815 42,746 21,205

637,153 1,097,577 274,704 311,290 190,991 128,981

1,035,972 943,311 356,970 246,081 226,840 127,851

521,193 439,506 159,423 114,682 101,868 53,070

3,455,164 2,017,865 874,906 324,520 409,220 308,619

1,756,278 1,107,835 505,310 205,806 256,482 155,544

1,698,946 909,902 369,515 118,621 152,866 152,866

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

118,219,258

13,521,765

29,030,292

24,412,424

12,168,862

39,095,898

24,347,964

14,762,250

68,874,991 43,999,946 3,191,941 2,152,380

9,149,422 3,350,990 452,700 568,652

18,091,418 9,962,217 500,731 475,927

13,616,495 9,681,474 712,927 401,528

6,489,875 5,194,954 316,176 167,858

21,527,034 15,809,965 1,220,195 538,703

13,275,612 10,171,978 603,145 297,229

8,251,251 5,638,049 631,471 241,479

65,498,162 54,769,985 10,728,177

6,757,348 5,795,234 962,114

16,754,792 14,496,388 2,258,404

14,094,480 11,743,797 2,350,683

6,665,314 5,458,594 1,206,721

21,225,880 17,275,822 3,950,057

13,681,845 11,207,005 2,474,841

7,544,229 6,068,993 1,475,236

Television Cable service and community antenna Television sets

Note:฀Numbers฀will฀not฀add฀to฀total฀because฀not฀all฀categories฀are฀shown฀and฀because฀of฀rounding.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀ ฀

฀

฀

฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 43

Table 31. Information Products and Services: Market shares by education, 2004 (percentage฀of฀total฀annual฀spending฀on฀information฀products฀and฀services฀accounted฀for฀by฀consumer฀unit฀educational฀attainment฀groups,฀2004) college graduate total consumer units Share of total consumer units Share of total before-tax income Share of total spending

100.0% 100.0 100.0

INFORMATION SPENDING Computer Computer information services Computers and computer hardware, nonbusiness use Computer software and accessories, nonbusiness use Repair of computer systems for nonbusiness use

100.0 100.0 100.0

Reading material Books (except those purchased through book clubs) Newspaper subscriptions Magazine subscriptions Newspapers, nonsubscription Magazines, nonsubscription Books purchased through book clubs

less than high school graduate 14.5% 7.7 8.5

high school graduate

some college

associate’s degree

master’s, professional, doctorate

bachelor’s degree

total

26.7% 20.7 21.8

21.8% 18.7 20.5

9.2% 9.9 10.2

27.9% 43.0 39.0

17.8% 24.7 23.3

10.1% 18.3 15.8

9.7 4.4 4.7

23.4 17.6 19.9

21.2 23.3 22.2

10.2 10.5 11.2

35.6 44.2 42.0

21.9 26.3 26.4

13.7 17.9 15.7

100.0

4.6

15.5

24.6

9.8

45.5

25.7

19.9

100.0

1.5

16.0

22.5

9.4

50.6

29.9

20.7

100.0

3.1

16.4

22.3

11.9

46.2

29.3

16.9

100.0

5.0

17.4

19.4

9.2

49.0

26.3

22.7

100.0 100.0 100.0 100.0 100.0 100.0

2.2 7.4 3.7 9.3 4.4 3.3

11.0 22.6 15.9 28.4 19.6 20.2

17.9 19.4 20.6 22.4 23.3 20.0

9.0 9.1 9.2 10.4 10.5 8.3

59.8 41.6 50.6 29.6 42.1 48.3

30.4 22.8 29.2 18.7 26.4 24.3

29.4 18.7 21.4 10.8 15.7 23.9

Telephone Residential telephone service and pay phones Cellular phone service Telephones and answering machines Phone cards

100.0 100.0 100.0 100.0 100.0

11.4 13.3 7.6 14.2 26.4

24.6 26.3 22.6 15.7 22.1

20.7 19.8 22.0 22.3 18.7

10.3 9.4 11.8 9.9 7.8

33.1 31.3 35.9 38.2 25.0

20.6 19.3 23.1 18.9 13.8

12.5 12.0 12.8 19.8 11.2

Television Cable service and community antenna Television sets

100.0 100.0 100.0

10.3 10.6 9.0

25.6 26.5 21.1

21.5 21.4 21.9

10.2 10.0 11.2

32.4 31.5 36.8

20.9 20.5 23.1

11.5 11.1 13.8

Note:฀Numbers฀may฀not฀add฀to฀total฀because฀of฀rounding.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀ ฀ ฀

44฀ WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

฀

฀

฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 45

Books (except Book Clubs) Best customers:

Householders aged 45 to 64 High-income households Married couples without children at home Married couples with school-aged children College graduates

Customer trends:

Average household spending on books may rise as boomers become emptynesters with more free time.

Book buying is the province of the highly educated and afﬂuent. Householders with a college degree spend more than twice the average on books and account for 60 percent of the market. Householders aged 45 to 64 spend 20 to 32 percent more than average on books. Many of them are empty-nesters with time to read. Married couples without children at home (again, most of them empty-nesters) spend 23 percent more than average on this item. Couples with school-aged children spend 44 percent more than average on books. Average household spending on books fell 9 percent between 2000 and 2004, after adjusting for inﬂation. This decline was less than that for newspapers or magazines, and may suggest good news for the book industry. Books are likely to weather the Internet revolution better than other print media because there are no adequate electronic alternatives. Some of the decline in spending on books could be due to price competition from discounters and used book sales. Average household spending on books is likely to rise as boomers become empty-nesters with more time to read.

Table 32. Books (except book clubs) Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

46 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$5,778,052,580.00 49.69 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$49.69 26.31 46.75 55.81 59.45 65.43 44.66 20.73

100 53 94 112 120 132 90 42

BIGGEST CUSTOMERS (market share)

100.0% 4.0 15.7 23.2 24.4 19.8 8.7 4.1

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$49.69 17.32 29.11 38.65 52.09 61.85 83.37 129.31

100 35 59 78 105 124 168 260

100.0% 8.7 13.8 7.6 16.3 6.9 13.3 33.4

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

49.69 62.51 61.32 65.58 58.22 71.63 59.34 30.07 37.13

100 126 123 132 117 144 119 61 75

100.0 64.7 27.2 33.2 5.6 19.1 8.5 3.6 21.6

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

49.69 58.91 17.91 18.90 58.61

100 119 36 38 118

100.0 4.0 4.3 4.0 91.7

REGION Average household Northeast Midwest South West

49.69 47.43 53.90 36.88 67.98

100 95 108 74 137

100.0 18.1 24.8 26.7 30.5

49.69 7.63 20.55 40.92 48.81 106.47 84.91 144.37

100 15 41 82 98 214 171 291

100.0 2.2 11.0 17.9 9.0 59.8 30.4 29.4

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 47

Books Purchased through Book Clubs Best customers:

Householders aged 45 to 74 Married couples without children at home Married couples with children under age 18 Households in the Midwest

Customer trends:

Average household spending on books purchased through book clubs will continue to spiral downward as online booksellers compete on price and convenience.

The biggest spenders on books from book clubs are married couples with children under age 6, many purchasing books for their preschoolers. This household type spends 90 percent more than average on books from book clubs. Couples with school-aged children spend 28 percent more than average on this item. Householders aged 45 to 64 are also above-average spenders on books from book clubs. This may explain why married couples without children at home, most of them older empty-nesters, spend 54 percent more than average on this item. Households in the Midwest spend 31 percent more than average on books from book clubs. Average household spending on book club books fell sharply between 2000 and 2004, down 38 percent after adjusting for inﬂation. Books clubs offer customers low prices. The freefall in spending on this item is a direct consequence of the convenience and low prices offered by online booksellers. This trend is likely to continue, as will the decline in average household spending on book club books.

Table 33. Books purchased through book clubs Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

48 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$639,551,000.00 5.50 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$5.50 1.06 4.31 5.81 6.52 7.57 6.84 3.75

100 19 78 106 119 138 124 68

BIGGEST CUSTOMERS (market share)

100.0% 1.5 13.1 21.9 24.2 20.7 12.0 6.8

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

$5.50 2.59 2.91 5.89 7.70 5.68 6.82 12.03

100 47 53 107 140 103 124 219

100.0% 11.7 12.4 10.5 21.8 5.7 9.9 28.1

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

5.50 7.62 8.49 6.99 10.47 7.02 4.59 3.32 3.28

100 139 154 127 190 128 83 60 60

100.0 71.2 34.0 32.0 9.2 16.9 6.0 3.6 17.3

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

5.50 2.14 1.60 4.03 6.29

100 39 29 73 114

100.0 1.3 3.4 7.7 88.9

REGION Average household Northeast Midwest South West

5.50 4.22 7.22 4.38 6.65

100 77 131 80 121

100.0 14.6 30.0 28.6 26.9

5.50 1.26 4.16 5.05 4.97 9.51 7.52 12.99

100 23 76 92 90 173 137 236

100.0 3.3 20.2 20.0 8.3 48.3 24.3 23.9

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 49

Cable Service and Community Antenna Best customers:

Householders aged 35 to 64 Married couples

Customer trends:

Spending should stabilize along with cable TV offerings.

Cable television service and community antenna (satellite TV) is the number-one entertainment expenditure of the average household. Because cable service is nearly universal, average household spending on the service does not vary much by demographic characteristic. By age, the best customers are householders aged 35 to 64, who spend 9 to 15 percent more than average on this item. These three age groups account for 63 percent of household spending on cable television service. Married couples spend 17 percent more than average on cable television. Couples with adult children at home spend 33 percent more. Spending on cable television and community antenna service grew by a substantial 34 percent between 2000 and 2004, after adjusting for inﬂation. Behind the increased spending on cable service are more cable channels. Many households opted for more service, with higher bills. If cable television can continue to innovate, households will continue to spend.

Table 34. Cable service and community antenna Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

50 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$54,769,984,820.00 471.01 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$471.01 215.60 443.50 513.74 543.40 537.61 473.76 371.08

100 46 94 109 115 114 101 79

BIGGEST CUSTOMERS (market share)

100.0% 3.5 15.7 22.6 23.5 17.2 9.7 7.8

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$471.01 283.26 409.03 475.56 543.18 593.79 634.57 702.44

100 60 87 101 115 126 135 149

100.0% 14.9 20.4 9.9 17.9 7.0 10.7 19.2

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

471.01 551.35 529.13 569.84 508.57 561.52 626.61 430.53 334.69

100 117 112 121 108 119 133 91 71

100.0 60.2 24.7 30.5 5.2 15.8 9.5 5.4 20.6

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

471.01 361.28 469.02 349.92 487.55

100 77 100 74 104

100.0 2.6 11.8 7.9 80.5

REGION Average household Northeast Midwest South West

471.01 534.03 446.17 484.69 420.73

100 113 95 103 89

100.0 21.5 21.6 37.0 19.9

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

471.01 344.36 467.55 463.87 511.20 532.35 541.82 515.72

100 73 99 98 109 113 115 109

100.0 10.6 26.5 21.4 10.0 31.5 20.5 11.1

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 51

Cellular Phone Service

Best customers:

Householders aged 25 to 54 Married couples with children at home

Customer trends:

Spending in this category should stabilize as cell phones become the norm and prices for cell phone service fall.

Married couples with children are the biggest spenders on cell phone service. Couples with children spend 44 percent more than average on this item. Those with adult children at home spend 75 percent more than average. Householders aged 25 to 54, most with children at home, spend 19 to 27 percent more than average on cell phone service and control fully 71 percent of the market. Average household spending on cell phone service soared between 2000 and 2004, rising by 189 percent after adjusting for inﬂation. Behind the increase is the expanding proportion of households that spend on cell service, rising from 21 percent during an average quarter of 2000 to 46 percent in 2004. The enormous growth in spending on cell service may mean slower growth in the future. Not only is cell service becoming the norm, but cutthroat competition is lowering service prices.

Table 35. Cellular phone service Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

52 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$43,999,945,980.00 378.39 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$378.39 371.32 464.67 451.23 479.39 353.38 207.65 82.91

100 98 123 119 127 93 55 22

BIGGEST CUSTOMERS (market share)

100.0% 7.4 20.5 24.7 25.8 14.0 5.3 2.2

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$378.39 160.32 278.60 350.25 468.69 545.87 616.27 675.13

100 42 74 93 124 144 163 178

100.0% 10.5 17.3 9.1 19.2 8.0 13.0 22.9

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

378.39 461.63 361.27 546.01 484.38 506.46 660.88 367.57 217.16

100 122 95 144 128 134 175 97 57

100.0 62.7 21.0 36.3 6.2 17.7 12.5 5.8 16.6

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

378.39 468.23 316.03 389.44 386.43

100 124 84 103 102

100.0 4.2 9.9 10.9 79.4

REGION Average household Northeast Midwest South West

378.39 331.07 378.26 378.50 418.63

100 87 100 100 111

100.0 16.6 22.8 36.0 24.6

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

378.39 199.12 321.31 382.41 486.51 487.18 491.78 479.10

100 53 85 101 129 129 130 127

100.0 7.6 22.6 22.0 11.8 35.9 23.1 12.8

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 53

Computers and Computer Hardware for Nonbusiness Use Best customers:

Householders aged 45 to 54 Married couples with school-aged or older children Asians College graduates

Customer trends:

Average household spending on computers and computer hardware is likely to decline as the market becomes saturated and prices fall.

The best customers of computers and computer hardware for nonbusiness use are householders aged 45 to 54, married couples with school-aged or older children at home, Asians, and college graduates. These are also the households that spend the most on computer information services. College graduates spend 63 percent more than the average household on computers and computer hardware. Householders aged 45 to 54 spend 41 percent more than average, and married couples with school-aged or older children at home spend 53 to 92 percent more than the average household on this item. Asians spend 36 percent more. Average household spending on computer hardware fell by 35 percent between 2000 and 2004, after adjusting for inﬂation. Behind the decline is the saturation of the market as a growing majority of households became computer owners. Falling prices are also behind the decline. These two factors will continue to inﬂuence the household market for computer hardware, pointing to a continuing decline in spending on this category.

Table 36. Computers and computer hardware for nonbusiness use Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

54 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$15,648,068,740.00 134.57 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$134.57 134.64 134.35 158.03 189.90 130.88 73.63 37.06

100 100 100 117 141 97 55 28

BIGGEST CUSTOMERS (market share)

100.0% 7.6 16.7 24.3 28.8 14.6 5.3 2.7

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$134.57 54.05 71.46 120.25 144.05 179.95 235.88 322.75

100 40 53 89 107 134 175 240

100.0% 10.0 12.5 8.7 16.6 7.4 13.9 30.8

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

134.57 172.48 134.13 210.54 152.09 206.14 258.15 90.28 81.89

100 128 100 156 113 153 192 67 61

100.0 65.9 21.9 39.4 5.4 20.3 13.7 4.0 17.6

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

134.57 182.89 51.50 113.01 149.83

100 136 38 84 111

100.0 4.6 4.5 8.9 86.6

REGION Average household Northeast Midwest South West

134.57 134.24 127.47 106.36 187.65

100 100 95 79 139

100.0 18.9 21.6 28.4 31.0

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

134.57 42.87 78.20 151.79 143.81 219.50 194.12 264.11

100 32 58 113 107 163 144 196

100.0 4.6 15.5 24.6 9.8 45.5 25.7 19.9

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 55

Computer Information Services Best customers:

Householders aged 35 to 54 Married couples with children at home Asians College graduates

Customer trends:

Spending will climb as online access becomes a necessity.

The best customers of computer information services (Internet access) are college-educated, middle-aged, married couples with children at home. Married couples with children at home spend 44 percent more than the average household on Internet service. College graduates spend 51 percent more than average. Householders aged 35 to 54 spend 23 to 28 percent more than average, in large part because they are likely to be married, with children. These two age groups account for 52 percent of all household spending on Internet service. Asian households spend 26 percent more than average on Internet service. The market for computer information services has more than doubled since 2000 and accounts for a growing share of the household budget. The average household spends more than three times as much on computer information services as it does on newspaper subscriptions. Spending for online service will continue to grow as younger generations of wired householders replace older generations with little interest in computers or Internet access.

Table 37. Computer information services Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

56 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$16,216,687,720.00 139.46 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$139.46 69.60 145.35 171.48 178.25 152.11 105.73 50.05

100 50 104 123 128 109 76 36

BIGGEST CUSTOMERS (market share)

100.0% 3.8 17.4 25.5 26.1 16.4 7.3 3.6

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$139.46 49.35 95.69 133.84 174.61 207.42 228.39 271.08

100 35 69 96 125 149 164 194

100.0% 8.8 16.1 9.4 19.5 8.3 13.0 25.0

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

139.46 177.90 156.45 201.48 177.18 201.81 217.28 112.80 80.43

100 128 112 144 127 145 156 81 58

100.0 65.6 24.7 36.4 6.1 19.1 11.1 4.8 16.7

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

139.46 175.39 82.14 89.38 154.85

100 126 59 64 111

100.0 4.3 7.0 6.8 86.3

REGION Average household Northeast Midwest South West

139.46 139.72 135.87 128.39 160.78

100 100 97 92 115

100.0 19.0 22.2 33.1 25.7

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

139.46 45.31 103.88 142.09 170.36 210.06 206.68 215.98

100 32 74 102 122 151 148 155

100.0 4.7 19.9 22.2 11.2 42.0 26.4 15.7

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 57

Computer Software and Accessories for Nonbusiness Use Best customers:

Householders aged 45 to 54 Married couples with school-aged or older children Asians College graduates

Customer trends:

Average household spending on computer software and accessories could rebound if new applications can entice buyers.

The best customers of computer software and accessories for nonbusiness use are householders aged 45 to 54, married couples with school-aged or older children at home, Asians, and college graduates. Not surprisingly, the best customers of computer software are also the best customers of computer hardware and Internet service. Householders aged 45 to 54 spend 61 percent more than the average household on computer software. Couples with school-aged or older children at home spend 50 to 71 percent more. Households headed by Asians spend 52 percent more than average on this item. College graduates spend 81 percent more than average on computer software and account for more than half the market. Average household spending on computer software and accessories has held steady since 2000, despite the growing share of households owning computers. One factor explaining the stability in spending on computer software is software bundling, whereby computer manufacturers include software with their hardware in an attempt to entice buyers. New must-have software applications may reverse this trend.

Table 38. Computer software and accessories for nonbusiness use Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

58 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$2,216,334,920.00 19.06 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$19.06 12.05 18.84 22.64 30.73 17.95 9.81 4.00

100 63 99 119 161 94 51 21

BIGGEST CUSTOMERS (market share)

100.0% 4.8 16.5 24.6 32.9 14.2 5.0 2.1

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$19.06 5.09 13.47 12.53 22.50 21.56 35.49 45.87

100 27 71 66 118 113 186 241

100.0% 6.6 16.6 6.4 18.3 6.3 14.8 30.9

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

19.06 24.26 20.92 27.31 15.82 28.61 32.66 10.78 14.43

100 127 110 143 83 150 171 57 76

100.0 65.5 24.1 36.1 4.0 19.8 12.2 3.4 21.9

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

19.06 29.00 7.56 13.11 21.58

100 152 40 69 113

100.0 5.2 4.7 7.3 88.0

REGION Average household Northeast Midwest South West

19.06 16.59 17.59 15.68 28.13

100 87 92 82 148

100.0 16.5 21.1 29.6 32.9

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

19.06 1.98 11.45 19.70 19.42 34.56 32.01 39.06

100 10 60 103 102 181 168 205

100.0 1.5 16.0 22.5 9.4 50.6 29.9 20.7

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 59

Magazines, Nonsubscription Best customers:

Householders aged 25 to 44 Married couples with children at home

Customer trends:

Average household spending on newsstand magazines will continue to decline as Internet-savvy younger generations ﬂock to electronic alternatives.

Married couples with children are the best customers of newsstand magazines—those picked up in passing at the grocery store or airport newsstand. Householders aged 25 to 44 spend 17 to 21 percent more than the average household on nonsubscription magazines. Married couples with children at home spend 23 to 43 percent more than average on this item—many of them responding to their children’s requests when shopping. Average household spending on nonsubscription magazines fell a substantial 20 percent between 2000 and 2004, after adjusting for inﬂation. The downward trend is likely to continue as Internet-savvy younger generations ﬂock to electronic alternatives.

Table 39. Magazines, nonsubscription Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

60 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$972,117,520.00 8.36 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$8.36 8.51 10.13 9.77 8.95 8.85 4.95 3.65

100 102 121 117 107 106 59 44

BIGGEST CUSTOMERS (market share)

100.0% 7.7 20.3 24.2 21.8 15.9 5.7 4.3

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

$8.36 3.96 6.15 8.66 8.60 9.89 12.86 16.92

100 47 74 104 103 118 154 202

100.0% 11.8 17.3 10.1 16.0 6.6 12.2 26.0

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

8.36 9.97 9.21 10.70 11.96 10.32 10.55 7.56 6.01

100 119 110 128 143 123 126 90 72

100.0 61.3 24.2 32.2 6.9 16.3 9.0 5.4 20.8

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

8.36 5.98 5.34 4.03 9.41

100 72 64 48 113

100.0 2.4 7.6 5.1 87.5

REGION Average household Northeast Midwest South West

8.36 8.25 9.87 6.97 9.14

100 99 118 83 109

100.0 18.7 26.9 30.0 24.3

8.36 2.54 6.16 8.96 9.54 12.61 12.40 12.99

100 30 74 107 114 151 148 155

100.0 4.4 19.6 23.3 10.5 42.1 26.4 15.7

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 61

Magazine Subscriptions Best customers:

Householders aged 55 to 74 Married couples without children at home

Customer trends:

Average household spending on magazine subscriptions will continue to decline as Internet-savvy younger generations ﬂock to electronic alternatives.

Older Americans are the best customers of magazine subscriptions because they have more free time and are drawn to print more than electronic media. Householders aged 55 to 74 spend 37 to 39 percent more than the average household on magazine subscriptions. Married couples without children at home (most of them empty-nesters) spend 68 percent more than average on this item. Average household spending on magazine subscriptions fell a substantial 29 percent between 2000 and 2004, after adjusting for inﬂation. The downward trend is likely to continue as Internet-savvy younger generations replace older generations who prefer print.

Table 40. Magazine subscriptions Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

62 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$1,730,276,160.00 14.88 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$14.88 6.18 9.69 12.68 16.60 20.33 20.68 17.42

100 42 65 85 112 137 139 117

BIGGEST CUSTOMERS (market share)

100.0% 3.1 10.9 17.6 22.7 20.5 13.4 11.6

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$14.88 5.84 10.22 16.67 15.27 18.53 23.77 31.98

100 39 69 112 103 125 160 215

100.0% 9.7 16.1 11.0 15.9 6.9 12.7 27.6

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

14.88 19.17 24.93 15.08 16.37 15.69 13.08 5.95 10.28

100 129 168 101 110 105 88 40 69

100.0 66.3 36.9 25.5 5.3 13.9 6.3 2.4 20.0

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

14.88 10.77 3.96 5.32 17.83

100 72 27 36 120

100.0 2.5 3.2 3.8 93.2

REGION Average household Northeast Midwest South West

14.88 16.67 16.56 11.13 17.69

100 112 111 75 119

100.0 21.2 25.4 26.9 26.5

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

14.88 3.81 8.86 14.10 14.93 26.96 24.43 31.40

100 26 60 95 100 181 164 211

100.0 3.7 15.9 20.6 9.2 50.6 29.2 21.4

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 63

Newspapers, Nonsubscription Best customers:

Householders aged 45 to 74 Households in the Northeast

Customer trends:

Average household spending on nonsubscription newspapers will continue to decline as the availability of online news dampens impulse purchasing.

The best customers of nonsubscription newspapers are residents of the Northeast’s commuter-friendly cities. Households in the Northeast spend 80 percent more than average on this item, many buying from newsstands or vending machines. Householders aged 45 to 74 spend 16 to 23 percent more than average on this item. Average household spending on nonsubscription newspapers fell an enormous 30 percent between 2000 and 2004, after adjusting for inﬂation. The downward spiral is due in part to easy (and free) access to newspapers online, which dampens impulse purchasing. This trend is likely to intensify as wireless Internet access becomes more widely available to commuters and long-distance travelers.

Table 41. Newspapers, nonsubscription Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

64 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$1,097,702,080.00 9.44 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$9.44 4.95 7.97 9.86 10.92 11.59 11.05 6.65

100 52 84 104 116 123 117 70

BIGGEST CUSTOMERS (market share)

100.0% 4.0 14.1 21.6 23.6 18.5 11.3 7.0

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

BIGGEST CUSTOMERS (market share)

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

$9.44 5.70 9.66 11.22 9.65 13.64 12.76 10.82

100 60 102 119 102 144 135 115

100.0% 15.0 24.0 11.6 15.9 8.0 10.7 14.7

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

9.44 9.98 9.50 10.37 9.28 10.02 11.74 8.50 8.78

100 106 101 110 98 106 124 90 93

100.0 54.4 22.1 27.7 4.7 14.0 8.9 5.3 26.9

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

9.44 4.18 8.31 5.86 10.10

100 44 88 62 107

100.0 1.5 10.4 6.6 83.2

REGION Average household Northeast Midwest South West

9.44 17.01 10.33 7.11 5.86

100 180 109 75 62

100.0 34.2 25.0 27.1 13.8

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

9.44 6.05 10.04 9.72 10.74 10.00 9.95 10.08

100 64 106 103 114 106 105 107

100.0 9.3 28.4 22.4 10.4 29.6 18.7 10.8

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 65

Newspaper Subscriptions Best customers:

Householders aged 55 or older Married couples without children at home

Customer trends:

Average household spending on newspaper subscriptions will continue to decline as Internet-savvy younger generations ﬂock to electronic alternatives.

Older householders are by far the best customers of newspaper subscriptions. Householders aged 55 or older spend 44 to 97 percent more than average on this item and control 57 percent of the market. Married couples without children at home (most of them empty-nesters) spend 73 percent more than average on this item. Average household spending on newspaper subscriptions fell a substantial 20 percent between 2000 and 2004, after adjusting for inﬂation. The downward trend is likely to continue as Internet-savvy younger generations ﬂock to electronic alternatives. This trend will make newspapers increasingly dependent on advertisers, rather than subscribers, for revenues.

Table 42. Newspaper subscriptions Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

66 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$4,855,936,320.00 41.76 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$41.76 3.70 13.94 28.50 46.06 59.95 69.43 82.06

100 9 33 68 110 144 166 197

BIGGEST CUSTOMERS (market share)

100.0% 0.7 5.6 14.1 22.5 21.6 16.1 19.5

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$41.76 23.83 30.38 37.35 43.10 49.55 56.62 86.41

100 57 73 89 103 119 136 207

100.0% 14.2 17.1 8.7 16.0 6.6 10.8 26.6

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

41.76 55.99 72.20 43.84 33.08 42.10 54.34 12.62 30.11

100 134 173 105 79 101 130 30 72

100.0 68.9 38.0 26.4 3.8 13.3 9.3 1.8 20.9

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

41.76 30.50 16.18 12.16 49.59

100 73 39 29 119

100.0 2.5 4.6 3.1 92.3

REGION Average household Northeast Midwest South West

41.76 50.94 51.34 31.13 41.28

100 122 123 75 99

100.0 23.1 28.1 26.8 22.0

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

41.76 21.23 35.40 37.26 41.16 62.18 53.56 77.32

100 51 85 89 99 149 128 185

100.0 7.4 22.6 19.4 9.1 41.6 22.8 18.7

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 67

Phone Cards

Best customers:

Householders under age 45 Asians and Hispanics Householders without a high school diploma

Customer trends:

Spending in this category should grow along with the Asian and Hispanic populations.

The biggest spenders on phone cards are households making international calls, many of them immigrants to the United States. Many immigrants are young adults, which explains why householders under age 45 spend 34 to 51 percent more than average on phone cards. Asians and Hispanics spend about three times the average on this item and control 42 percent of the market. Householders without a high school diploma (many of them Hispanic) spend 83 percent more than average on phone cards. Spending on phone cards should rise along with the Asian and Hispanic populations.

Table 43. Phone cards Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

68 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$2,152,379,820.00 18.51 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$18.51 25.38 24.82 28.03 15.89 12.28 10.73 5.19

100 137 134 151 86 66 58 28

BIGGEST CUSTOMERS (market share)

100.0% 10.4 22.4 31.3 17.5 10.0 5.6 2.8

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$18.51 16.28 19.71 19.95 22.65 12.04 21.76 15.37

100 88 106 108 122 65 118 83

100.0% 21.9 25.0 10.5 19.0 3.6 9.3 10.7

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

18.51 19.01 13.03 20.98 24.91 20.14 19.89 23.24 11.56

100 103 70 113 135 109 107 126 62

100.0 52.8 15.5 28.5 6.5 14.4 7.7 7.4 18.1

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

18.51 55.18 19.43 55.71 13.32

100 298 105 301 72

100.0 10.1 12.4 31.8 56.0

REGION Average household Northeast Midwest South West

18.51 17.73 14.74 17.37 24.90

100 96 80 94 135

100.0 18.2 18.2 33.7 30.0

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

18.51 33.79 15.35 15.86 15.72 16.60 14.37 20.52

100 183 83 86 85 90 78 111

100.0 26.4 22.1 18.7 7.8 25.0 13.8 11.2

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 69

Residential Telephone Service and Pay Phones Best customers:

Married couples with children at home Blacks

Customer trends:

Spending in this category will decline as service prices drop and cell phones replace residential phones.

Because most households buy residential phone service, there is little variation in spending on this item by demographic characteristic. Married couples with children are the biggest spenders on residential phone service because their households are larger than average. Couples with children spend 24 percent more than average on this item. Black households spend 16 percent more than average on residential phone service. Average household spending on residential phone service fell 29 percent between 2000 and 2004, after adjusting for inﬂation. Falling service prices were behind the decline, as well as the substitution of cell phones for residential phones. Despite the decline, residential phone service still ranks among the top 20 items on which households spend the most. Average household spending on residential phone service will continue to decline as cell phone service replaces residential service.

Table 44. Residential telephone service and pay phones Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

70 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$68,874,991,420.00 592.31 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$592.31 245.25 536.85 664.51 681.74 673.33 596.40 489.82

100 41 91 112 115 114 101 83

BIGGEST CUSTOMERS (market share)

100.0% 3.1 15.2 23.2 23.5 17.1 9.7 8.2

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$592.31 411.43 541.84 613.05 654.90 693.55 729.83 814.07

100 69 91 104 111 117 123 137

100.0% 17.3 21.5 10.1 17.2 6.5 9.8 17.7

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

592.31 697.22 637.39 732.44 655.64 721.23 805.04 587.72 405.04

100 118 108 124 111 122 136 99 68

100.0 60.5 23.7 31.1 5.3 16.1 9.7 5.9 19.8

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

592.31 552.53 688.72 584.51 578.55

100 93 116 99 98

100.0 3.2 13.8 10.4 76.0

REGION Average household Northeast Midwest South West

592.31 637.95 551.69 634.77 526.52

100 108 93 107 89

100.0 20.4 21.3 38.5 19.8

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

592.31 543.67 583.50 537.84 607.78 663.35 641.83 701.16

100 92 99 91 103 112 108 118

100.0 13.3 26.3 19.8 9.4 31.3 19.3 12.0

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 71

Telephones, Answering Machines, and Accessories

Best customers:

Householders aged 45 to 54 Married couples with school-aged or older children

Customer trends:

Spending in this category may rise as cell phones turn into fashion accessories and become a must-have item.

The best customers of telephones, answering machines, and accessories are married couples with school-aged or older children. These households spend more than twice the average on this item because their households are larger than average. Householders aged 45 to 54 also spend more than twice the average on telephones and accessories because many have teens and young adults living with them. Average household spending on telephones, answering machines, and accessories fell 20 percent between 2000 and 2004, after adjusting for inﬂation. One factor behind the decline was cell phone promotions, by which cell phone service providers give away phones to lure customers. Falling prices for residential phones and answering machines also account for the decline. Average household spending on this item may rise in the next few years as phones grow increasingly sophisticated and become a fashion accessory and must-have item.

Table 45. Telephones, answering machines, and accessories Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

72 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$3,191,940,900.00 27.45 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$27.45 10.68 11.30 25.66 59.12 32.23 13.20 14.12

100 39 41 93 215 117 48 51

BIGGEST CUSTOMERS (market share)

100.0% 3.0 6.9 19.3 43.9 17.6 4.6 5.1

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$27.45 5.38 16.08 27.34 21.16 25.84 52.65 78.20

100 20 59 100 77 94 192 285

100.0% 4.9 13.8 9.7 12.0 5.2 15.3 36.6

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

27.45 40.85 24.38 60.45 8.72 62.09 98.56 8.79 12.23

100 149 89 220 32 226 359 32 45

100.0 76.5 19.5 55.4 1.5 29.9 25.6 1.9 12.9

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

27.45 8.74 30.32 29.16 28.27

100 32 110 106 103

100.0 1.1 13.1 11.2 80.1

REGION Average household Northeast Midwest South West

27.45 45.05 13.93 26.02 28.71

100 164 51 95 105

100.0 31.1 11.6 34.1 23.3

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

27.45 26.90 16.15 28.16 29.61 37.60 29.16 53.66

100 98 59 103 108 137 106 195

100.0 14.2 15.7 22.3 9.9 38.2 18.9 19.8

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

BIGGEST CUSTOMERS (market share)

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 73

Television Sets Best customers:

Householders aged 25 to 64 Married couples

Customer trends:

Spending should continue to rise as more households purchase HDTV sets.

The best customers of television sets are young and middle-aged married couples. Married couples spend 26 percent more than average on television sets, the ﬁgure peaking at 88 percent among couples with preschoolers. Householders spanning the ages from 25 to 64, most married and many with children, spend 6 to 22 percent more than average on television sets. Average household spending on television sets grew by a strong 29 percent between 2000 and 2004, after adjusting for inﬂation, which makes it one of the few entertainment categories on which households boosted their spending. Spending on televisions should increase over the next few years as prices for HDTV sets fall and more households adopt the new technology.

Table 46. Television sets Total household spending Average household spends

AGE OF HOUSEHOLDER Average household Under age 25 Aged 25 to 34 Aged 35 to 44 Aged 45 to 54 Aged 55 to 64 Aged 65 to 74 Aged 75 or older

74 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$10,728,177,320.00 92.26 AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

$92.26 74.15 112.47 104.96 97.73 108.39 53.54 47.51

100 80 122 114 106 117 58 51

BIGGEST CUSTOMERS (market share)

100.0% 6.1 20.4 23.5 21.6 17.7 5.6 5.1

AVERAGE HOUSEHOLD SPENDING

BEST CUSTOMERS (index)

BIGGEST CUSTOMERS (market share)

HOUSEHOLD INCOME Average household Under $20,000 $20,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $79,999 $80,000 to $99,999 $100,000 or more

$92.26 33.98 55.64 63.75 118.21 113.07 168.89 205.81

100 37 60 69 128 123 183 223

100.0% 9.2 14.2 6.8 19.9 6.8 14.6 28.7

HOUSEHOLD TYPE Average household Married couples Married couples, no children Married couples, with children Oldest child under 6 Oldest child 6 to 17 Oldest child 18 or older Single parent with child under 18 Single person

92.26 115.98 110.85 127.37 173.05 108.04 132.35 47.68 55.19

100 126 120 138 188 117 143 52 60

100.0 64.6 26.4 34.8 9.0 15.5 10.2 3.1 17.3

RACE AND HISPANIC ORIGIN Average household Asian Black Hispanic Non-Hispanic white and other

92.26 106.86 58.30 94.37 96.97

100 116 63 102 105

100.0 3.9 7.5 10.8 81.7

REGION Average household Northeast Midwest South West

92.26 98.84 82.15 82.76 112.36

100 107 89 90 122

100.0 20.3 20.3 32.2 27.1

EDUCATION Average household Less than high school graduate High school graduate Some college Associate’s degree College graduate Bachelor’s degree Master’s, professional, doctoral degree

92.26 57.17 72.84 92.85 113.01 121.72 119.65 125.36

100 62 79 101 122 132 130 136

100.0 9.0 21.1 21.9 11.2 36.8 23.1 13.8

Note:฀Market฀shares฀may฀not฀sum฀to฀100.0฀because฀of฀rounding฀and฀missing฀categories฀by฀ household฀type.฀“Asian”฀and฀“black”฀include฀Hispanics฀and฀non-Hispanics฀who฀identify฀ themselves฀as฀being฀of฀the฀respective฀race฀alone.฀“Hispanic”฀includes฀people฀of฀any฀race฀ who฀identify฀themselves฀as฀Hispanic.฀“Other”฀includes฀people฀who฀identify฀themselves฀as฀ non-Hispanic฀and฀as฀Alaska฀Native,฀American฀Indian,฀Asian฀(who฀are฀also฀included฀in฀the฀ “Asian”฀row),฀Native฀Hawaiian฀or฀other฀Paciﬁc฀Islander,฀as฀well฀as฀non-Hispanics฀reporting฀more฀than฀one฀race.฀ Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀Bureau฀of฀Labor฀Statistics฀2004฀Consumer฀Expenditure฀Survey฀ ฀ ฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 75

Appendix: Spending by Product and Service

Ranked by Amount Spent, 2004 (average฀annual฀spending฀of฀consumer฀units฀on฀products฀and฀services,฀ranked฀ by฀amount฀spent,฀2004) Deductions for Social Security Vehicle purchases (net outlay) Groceries (also shown by individual category) Mortgage interest Restaurants (also shown by meal category) Rent Gasoline and motor oil Federal income taxes Property taxes Health insurance Electricity Vehicle insurance Restaurant dinners Restaurant lunches Vehicle maintenance and repairs Women’s clothes Residential phone service Cash contributions to church, religious organizations College tuition Maintenance and repair services, owned homes Deductions for private pensions Cable TV or community antenna Alcoholic beverages (beer and wine also shown separately) Natural gas Nonpayroll deposit to retirement plans State and local income taxes Life and other personal insurance Cellular phone service Prescription drugs Vehicle ﬁnance charges Men’s clothes Homeowner’s insurance Cash gifts to nonhousehold members Restaurant snacks Lodging on trips Airline fares Beef Personal care services Cigarettes Water and sewerage maintenance Dental services Motorized recreational vehicles Leased vehicles Restaurant breakfasts Beer Day care centers, nurseries, and preschools Fresh fruits Fresh vegetables Pork Child support Finance charges other than mortgage and vehicle Decorative items for the home Cash contributions to charities Poultry

76 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$3,432.61 3,397.07 3,346.82 2,785.37 2,259.72 2,125.93 1,597.56 1,518.95 1,391.17 1,331.71 1,064.41 964.37 795.59 725.07 651.66 631.01 592.31 565.11 541.35 530.63 518.59 471.01 459.27 424.02 400.54 397.82 390.34 378.39 349.41 323.41 317.28 314.75 302.93 297.45 277.89 275.94 265.34 264.09 264.05 242.54 240.60 229.60 216.58 210.06 207.63 193.51 186.74 182.94 181.14 165.10 158.18 158.10 157.51 155.61

Women’s footwear Interest paid, home equity loan/line of credit Laundry and cleaning supplies Cosmetics, perfume, bath preparations Physician’s services Taxes except federal, state, local, personal property, and property Elementary and high school tuition Carbonated drinks Movie, theater, opera, and ballet tickets Computer information services (Internet) Owned vacation homes Computers and computer hardware, nonbusiness use Fresh milk Fish and seafood Legal fees School expenses (except tuition, books, supplies) Wine Jewelry Cheese Men’s footwear Pet food Girls’ (2 to 15) clothes Prepared food except frozen, salads, and desserts Fees for participant sports Toys, games, arts and crafts, and tricycles Social, recreation, civic club membership Gardening, lawn care service Sofas Television sets Expenses for other properties Boys’ (2 to 15) clothes Housekeeping services Ready-to-eat and cooked cereals Potato chips and other snacks Cleansing and toilet tissue, paper towels and napkins Bedroom linens Lawn and garden supplies Candy and chewing gum Trash and garbage collection Support for college students Fees for recreational lessons Bedroom furniture except mattresses and springs Vehicle registration, state Nonprescription drugs Infants’ (under age 2) clothes Deductions for government retirement Veterinary services Frozen prepared foods, except meals Stationery, stationery supplies, giftwrap Postage Home maintenance and repair materials, owned homes Lunch meats (cold cuts) Nonalcoholic beverages (except carbonated, coffee, fruit-ﬂavored drinks, and tea) and ice Lotteries and gambling losses Funeral expenses Wall units, cabinets, and other occasional furniture Fuel oil Hair care products School lunches Babysitting and child care Ice cream products

$153.81 150.62 148.56 147.41 146.58 146.39 142.80 141.89 140.49 139.46 137.22 134.57 128.94 127.80 127.50 119.39 116.84 113.72 113.67 110.67 110.31 107.60 102.74 100.70 99.21 98.19 95.08 94.74 92.75 91.63 88.88 88.85 86.69 86.06 85.84 85.72 83.44 83.13 82.77 82.49 82.42 81.32 80.92 80.31 78.51 78.45 78.38 78.11 74.86 74.12 73.33 72.99 70.10 66.54 65.78 65.05 64.19 63.90 63.39 63.21 60.22

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 77

Professional laundry and dry cleaning School books, supplies, equipment for college Catered affairs Pet purchase, supplies, medicine Housing while attending school Unmotored recreational vehicles Books, except for school Canned and bottled fruit juice Mattresses and springs Athletic gear, game tables, and exercise equipment Bread other than white Ship fares Admission to sporting events Refrigerators, freezers Accounting fees Hospital services other than room Nonprescription vitamins Lawn and garden equipment Eyeglasses and contact lenses Alimony Cookies Intracity mass transit fares Cash contributions to educational institutions Bottled gas Occupational expenses Video cassettes, tapes, and discs Biscuits and rolls Eggs Newspaper subscriptions Living room chairs Indoor plants, fresh ﬂowers Care in convalescent or nursing home Kitchen and dining room furniture Sauces and gravies Groceries on trips Ground rent Hospital room Medical services by professionals other than physician Coffee Cakes and cupcakes Eyecare services Alcoholic beverages purchased on trips Rented vehicles Canned and packaged soups Rent as pay Outdoor equipment Boys’ footwear Rental of video cassettes, tapes, ﬁlms, and discs CDs, audio tapes, records White bread Care for elderly, invalids, handicapped Coin-operated apparel laundry and dry cleaning Oral hygiene products Canned vegetables Deodorants, feminine hygiene, miscellaneous personal care Moving, storage, freight express Power tools Photographic equipment and supplies (except ﬁlm) Film and ﬁlm processing Cooking stoves, ovens Hunting and ﬁshing equipment Frozen meals Topicals and dressings Personal property taxes

78 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$60.18 58.86 58.56 57.85 57.73 55.39 55.19 55.05 53.56 53.07 52.59 52.10 52.06 51.27 51.22 51.20 50.57 48.79 47.56 47.29 46.57 46.32 46.06 45.20 43.10 42.63 42.11 41.84 41.76 41.65 41.52 41.33 41.26 40.94 40.86 40.10 40.01 39.54 39.12 39.04 38.89 38.37 38.27 36.50 36.08 35.99 35.92 35.61 35.26 35.04 34.96 34.86 34.63 34.49 34.33 33.91 33.44 33.16 32.49 32.42 31.82 31.79 31.53 31.17

Nuts Washing machines Baby food Parking fees Taxi fares and limousine services Fats and oils Property management, owned home Frozen vegetables Girls’ footwear Wall-to-wall carpeting Food or board at school Electric ﬂoor-cleaning equipment Salad dressings School tuition (except college, elementary, high school) Maintenance and repair services, rented home Telephones and accessories Lab tests, X-rays Pasta, cornmeal, and other cereal products Frozen and refrigerated bakery products Prepared salads Pet services Gift of stocks, bonds, and mutual funds to nonhousehold members Crackers Meals as pay VCRs and video disc players Floor coverings, nonpermanent Sweetrolls, coffee cakes, doughnuts Window coverings Sound equipment Frankfurters Salt, spices, other seasonings Tableware, nonelectric kitchenware Fresh fruit juice Tobacco products except cigarettes Jams, preserves, other sweets Clothes dryers Butter Watches Bathroom linens Glassware Musical instruments and accessories Baking needs Noncarbonated fruit-ﬂavored drinks Tolls Curtains and draperies Computer software and accessories for nonbusiness use Shaving needs Checking accounts, other bank service charges Phone cards Rice Video game hardware and software Nonelectric cookware Intercity train fares Closet and storage items Tea Small electric kitchen appliances Cash contributions to political organizations Lamps and lighting ﬁxtures Photographer fees Canned fruits Outdoor furniture Sugar Laundry and cleaning equipment Home security system service fee

$31.01 30.65 30.08 29.41 29.05 28.56 28.55 28.50 28.34 27.98 27.89 27.71 27.44 27.13 26.94 26.83 26.75 26.55 26.32 25.43 25.07 24.97 24.60 24.45 24.05 24.00 23.59 23.47 23.39 22.52 22.22 22.20 22.07 22.07 22.04 22.03 21.81 21.51 21.26 20.88 20.06 19.97 19.79 19.23 19.22 19.06 18.71 18.70 18.51 18.46 18.34 18.10 17.84 17.83 17.63 17.27 16.58 16.40 16.23 16.19 16.18 16.10 15.72 15.57

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 79

Cream Hearing aids Magazine subscriptions Living room tables Appliance repair, including service center Dishwashers (built-in), garbage disposals, range hoods Pies, tarts, turnovers Prepared ﬂour mixes School books, supplies, equipment for elementary, high school Camping equipment Cemetery lots, vaults, maintenance fees China and other dinnerware Automobile service clubs Material for making clothes Peanut butter Lamb, organ meats Services for termite/pest control Ofﬁce furniture for home use Bicycles Sewing materials for household items (except clothes) Prepared desserts Nondairy cream and imitation milk Wood Olives, pickles, relishes Local transportation on trips Kitchen and dining room linens Electric personal care appliances Tape recorders and players Dried vegetables Margarine Newspapers, nonsubscriptions Intercity bus fares Vehicle inspection Slipcovers, decorative pillows Vegetable juice Infants’ furniture Microwave ovens Magazines, nonsubscriptions Flour Adult day care centers Infants’ equipment Sewing patterns and notions Clocks Reupholstering, furniture repair Repairs/rentals of household equipment Driver’s license Supportive and convalescent medical equipment Tenant’s insurance Vehicle registration, local Artiﬁcial sweeteners Medical equipment for general use Luggage Delivery services Frozen fruit juice Hair accessories Management and upkeep for security, owned home Dried fruit Hand tools Shopping club membership fees Docking and landing fees Alteration, repair and tailoring of apparel and accessories Towing charges Maintenance and repair materials, rented home Portable heating and cooling equipment

80 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

$15.39 15.21 14.88 14.77 14.53 14.34 13.99 13.78 13.56 13.48 13.48 13.47 13.12 13.05 12.52 12.48 12.04 11.37 11.34 11.20 10.91 10.80 10.61 10.52 10.00 9.84 9.74 9.71 9.58 9.57 9.44 9.35 9.29 9.12 9.06 8.44 8.43 8.36 8.32 8.03 7.86 7.82 7.64 7.35 7.29 7.16 7.16 7.06 6.90 6.85 6.75 6.63 6.52 6.44 6.37 6.36 6.35 6.11 5.72 5.62 5.12 5.08 5.07 4.83

Water sports equipment Window air conditioners Winter sports equipment Compact disc, tape, record, and video mail order clubs Repair of computer systems for nonbusiness use Flatware Watch and jewelry repair Fireworks Rental of supportive, convalescent medical equipment Coin-operated household laundry and dry cleaning (nonclothing) Radios Sewing machines Frozen fruits Parking at owned home Playground equipment Bread and cracker products Safe deposit box rental Water softening service Repair of TV, radio, and sound equipment Deductions for railroad retirement Rental and repair of sports equipment Credit card memberships School books, supplies, equipment for day care, nursery, other Clothing rental Rental and repair of musical instruments Rental of furniture Septic tank cleaning Visual goods Smoking accessories Wigs and hairpieces Rental of medical equipment Plastic dinnerware Appliance rental Termite/pest control products Pinball, electronic video games Calculators Portable dishwasher Shoe repair and other shoe service Smoke alarms Pager service Repair and rental of photographic equipment Professional laundry and dry cleaning, sent out (nonclothing) Business equipment for home use Rental of television ets Satellite dishes School bus Telephone answering devices Repair of miscellaneous household equipment and furnishings Clothing storage Silver serving pieces Rental of VCR, radio, and sound equipment

$4.65 4.36 4.17 4.15 4.03 4.02 3.82 3.75 3.74 3.71 3.67 3.59 3.53 3.43 3.33 3.25 3.22 3.06 3.02 2.67 2.49 2.41 2.32 2.28 2.28 2.22 2.16 2.10 2.02 1.90 1.88 1.82 1.75 1.53 1.51 1.44 1.22 1.12 1.03 1.01 0.99 0.94 0.94 0.81 0.77 0.74 0.62 0.54 0.47 0.30 0.11

Source:฀Calculations฀by฀New฀Strategist฀based฀on฀the฀2004฀Consumer฀ Expenditure฀Survey฀

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 81

Glossary age The age of the reference person. average spending The average amount spent per household. The Bureau of Labor Statistics calculates the average for all households in a segment, not just for those who purchased an item. For items purchased by most households—such as bread—average spending ﬁgures are an accurate account of actual spending. For products and services purchased by few households during a year’s time—such as cars—the average amount spent is much less than what purchasers spend. See Table 1 for the percentage of consumer units reporting an expenditure and the average amount spent by purchasers. baby boom Generation born from 1946 through 1964. baby bust Generation born from 1965 through 1976. Also known as generation X. consumer unit Deﬁned as follows: • All members of a household who are related by blood, marriage, adoption, or other legal arrangements. • A person living alone or sharing a household with others or living as a roomer in a private home or lodging house or in permanent living quarters in a hotel or motel, but who is ﬁnancially independent. • Two or more persons living together who pool their income to make joint expenditure decisions. Financial independence is determined by the three major expense categories: housing, food, and other living expenses. To be considered ﬁnancially independent, at least two of the three major expense categories have to be provided by the respondent. For convenience, called household in the text of this book. consumer unit, composition of The classiﬁcation of interview households by type according to (1) relationship of other household members to the reference person; (2) age of the children to the reference person; and (3) combination of relationship to the reference person and age of the children. Stepchildren and adopted children are included with the reference person’s own children. education of reference person The number of years of formal education of the reference person based on the highest grade completed. If the respondent was enrolled at the time of interview, the grade being attended is the one recorded. Those not reporting their education are classiﬁed under no school or not reported. expenditure The transaction cost including excise and sales taxes of goods and services acquired during the survey period. The full cost of each purchase is recorded even though full payment may not have been made at the date of purchase. Expenditure estimates include gifts. Excluded from expenditures are purchases or portions of purchases directly assignable to business purposes and periodic credit or installment payments on goods and services already acquired. generation X Generation born from 1965 through 1976. Also known as the baby bust.

82 WHO’S BUYING INFORMATION PRODUCTS AND SERVICES

Hispanic origin The self-identiﬁed Hispanic origin of the consumer unit reference person. All consumer units are included in one of two Hispanic origin groups based on the reference person’s Hispanic origin: Hispanic or non-Hispanic. Hispanics may be of any race. household According to the Census Bureau, all the people who occupy a household. A group of unrelated people who share a housing unit as roommates or unmarried partners is also counted as a household. Households do not include group quarters such as college dormitories, prisons, or nursing homes. A household may contain more than one consumer unit. The terms “household” and “consumer unit” are used interchangeably in this book. income before taxes The total money earnings and selected money receipts accruing to a consumer unit during the 12 months prior to the interview date. Income includes the following components: • wages and salaries Includes total money earnings for all members of the consumer unit aged 14 or older from all jobs, including civilian wages and salaries, Armed Forces pay and allowances, piece-rate payments, commissions, tips, National Guard or Reserve pay (received for training periods), and cash bonuses before deductions for taxes, pensions, union dues, etc. • self-employment income Includes net business and farm income, which consists of net income (gross receipts minus operating expenses) from a profession or unincorporated business or from the operation of a farm by an owner, tenant, or sharecropper. If the business or farm is a partnership, only an appropriate share of net income is recorded. Losses are also recorded. • Social Security, private and government retirement Includes payments by the federal government made under retirement, survivor, and disability insurance programs to retired persons, dependents of deceased insured workers, or to disabled workers; and private pensions or retirement beneﬁts received by retired persons or their survivors, either directly or through an insurance company. • interest, dividends, rental income, and other property income Includes interest income on savings or bonds; payments made by a corporation to its stockholders, periodic receipts from estates or trust funds; net income or loss from the rental of property, real estate, or farms, and net income or loss from roomers or boarders. • unemployment and workers’ compensation and veterans’ beneﬁts Includes income from unemployment compensation and workers’ compensation, and veterans’ payments including educational beneﬁts, but excluding military retirement. • public assistance, supplemental security income, and food stamps Includes public assistance or welfare, including that received from job training grants; supplemental security income paid by federal, state, and local welfare agencies to low-income persons who are aged 65 or older, blind, or disabled; and the value of food stamps obtained.

• regular contributions for support Includes alimony and child support as well as any regular contributions from persons outside the consumer unit. • other income Includes money income from care of foster children, cash scholarships, fellowships, or stipends not based on working; and meals and rent as pay. indexed spending Indexed spending ﬁgures compare the spending of particular demographic segments with that of the average household. To compute an index, the amount spent on an item by a demographic segment is divided by the amount spent on the item by the average household. That ﬁgure is then multiplied by 100. An index of 100 is the average for all households. An index of 132 means average spending by households in a segment is 32 percent above average (100 plus 32). An index of 75 means average spending by households in a segment is 25 percent below average (100 minus 25). Indexed spending ﬁgures identify the consumer units that spend the most on a product or service.

• South: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia. • West: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

market share The market share is the percentage of total household spending on an item that is accounted for by a demographic segment. Market shares are calculated by dividing a demographic segment’s total spending on an item by the total spending of all households on the item. Total spending on an item for all households is calculated by multiplying average spending by the total number of households. Total spending on an item for a demographic segment is calculated by multiplying the segment’s average spending by the number of households in the segment. Market shares reveal the demographic segments that account for the largest share of spending on a product or service. millennials Generation born from 1977 through 1994. race The self-identiﬁed race of the consumer unit reference person. All consumer units are included in one of three racial groups: Asian, black, or “white and other.” “Other” includes Alaska Natives, American Indians, Native Hawaiians, other Paciﬁc Islanders, and persons reporting more than one race. Hispanics may be of any race. reference person The ﬁrst member mentioned by the respondent when asked to “Start with the name of the person or one of the persons who owns or rents the home.” It is with respect to this person that the relationship of other consumer unit members is determined. Also called the householder or head of household. region Consumer units are classiﬁed according to their address at the time of their participation in the survey. The four major census regions of the United States are the following state groupings: • Northeast: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont. • Midwest: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.

WHO’S BUYING INFORMATION PRODUCTS AND SERVICES 83