Israeli Consumers Prefer ONLINE Media

In a survey released this week by Google and BCG, among the 11 countries surveyed, Israelis ascribed the most value to their online media. The value that Israeli consumers attach to online media suggests that business models will need to rapidly adapt to this new environment.

Israelis Value Online Media 1.5x More Than Offline Media- Highest in Global Survey

Israel Tops All Countries Surveyed in Online Media Consumer Surplus

Digital media is a recent phenomenon in Israel. The first television broadcast, a military parade, did not occur until 1968. In the mobile era, the iPhone arrived in 2009 (two years after the US), followed by the iPad in 2011 and the iTunes store in 2012. Today, 60 percent of Israeli adults carry a Smartphone, spurring 2x growth in mobile media consumption just in the last two years, to 93 minutes per day (Shiluv Millward Brown).

In a survey released this week by Google and BCG, among the 11 countries surveyed, Israelis ascribed the most value to their online media. The value that Israeli consumers attach to online media suggests that business models will need to rapidly adapt to this new environment.

Online Surplus vs Offline Surplus

In a small market, limited to Hebrew language content and virtually no premium subscription services (such as Pandora, Hulu, Netflix, Spotify, Amazon Prime, etc), the transition to online has been swift. Three years ago, Israelis owned an average of two digital devices. This number will double in the next three years. Consumers crave more, and better, content they can access anywhere. For example, in January satellite TV operator YES introduced their yesGo product, allowing subscribers to watch live TV channels and video-on-demand for free. In less than half a year, more than 1/3 of subscribers are now using the service regularly. In fact, a majority (52%) of Israelis prefer consuming their media online, rather than offline.

Enthusiasm About Online Media

For media companies, the future is NOW. Business models will need to reflect consumer preference and ascribed value, for online media. In some cases, the preferred business model will be advertising. 65% of Israelis are willing to accept advertising in exchange for free content.

The higher value that consumers ascribe to online media also suggests there is room for subscription services (such as Netflix, Hulu and Amazon Prime), that provide a broader library of content. One thing is certain, the “People of the Book” have now become the “People of the Facebook”. The enthusiasm for online content creates new opportunities for media companies with innovative business models.

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Managing Partner at JIMMI Fund
Levi Shapiro is the Managing Partner at the JIMMI Fund, a corporate venture investment fund, and concurrently Partner at TMT Strategic Advisors. He is also the organizer of Marketing & Ad:Tech Israel (www.adtechsummit.com), Israel's largest conference for digital advertising.

During a 20 year career inmedia and technology, including 7 years in Asia, Levi launched new business units(IBM), new products (Toyota) and new startups (TwoMinute Television, Snack Mobile, etc).

He teaches Entrepreneurship and Mobile Marketing as an Adjunct Professor at IDC Herzliya, serves as Mentor in Residence for The Hive accelerator and writes a bi-weekly column about digital media and technology in the Jerusalem Post called "Unleavened Media ".

Mr. Shapiro is a graduate of Tulane (BA), Cornell (Asian Studies) and MIT (MBA)
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