Vancouver Sun Articles - week of Feb. 21, 99 following New Media Conference in Victoria

NETWORKS

Gillian Shaw:
Internet users increase use and
sophistication

The Vancouver Sun

Gillian Shaw, Sun Business Columnist Vancouver Sun
VICTORIA -- Internet users are spending more time online and becoming more
sophisticated in their surfing, a University of Victoria new media conference
heard Tuesday.

Citing usage statistics from January, Vida Morkunas, director of strategic
services for the Vancouver company Emerge Online, told delegates if
businesses are to have successful websites, they must recognize this
changing market.

"There has been phenomenal growth. There has been growth both in the
number of people online and the length of time they are spending on each
page they are viewing on the Web."

At 6.49 million Internet users, Canada comes only second to the United
States in the percentage of its population that is online. Europe has 36 million
Internet users. By the end of 2000, an estimated 320 million people will be on
the Internet worldwide.

Morkunas cited a study released earlier this month by Net Ratings that
indicated Internet users:

- View 959 Web pages a month.

- Spend an average of just over 16 hours a month online.

- Go online 27 times a month].

- View 36 Web pages at each online session.

- Spend almost 35 minutes online each time they log on.

- Take about one minute to view a Web page on average.

- See 329 banner ads on websites every month.

- Click on 2.52 of those banner ads to find out more about what is being
advertised.

Morkunas said the fact people are spending more time online and reading
more is linked to the increase in content on the Internet. She said the
statistics also indicate users are becoming more comfortable with the
technology.

"People are becoming more curious and they are becoming more adept at
navigating around websites."

But the statistics on the viewing of banner ads (ads that are included on
websites and invite surfers to click on them to find out about a product,
company or service) indicate users are somewhat tired of the ads.

"I think people are burning out on banners or they are just not interested in
what's being advertised," Morkunas said.

Morkunas said ads must take into account the target audience, rather than
simply blanketing sites that get a lot of traffic.

Despite the figures, which suggest not even one per cent of surfers who see
banner ads are drawn to click on them, Morkunas said even a slight increase
would be considered a respectable return rate.

Two per cent is considered a good return in the industry, meaning two per
cent of all the viewers who see a banner ad would click on it. By contrast,
unsolicited (junk) mail flyers are considered successful if they get a
five-per-cent return rate.

Morkunas told delegates businesses should consider Web surfers priorities
when it comes to designing sites. According to a recent study by Forrester
Research the top priorities are:

- High quality content, at 75 per cent.

- Ease of use, at 66 per cent.

- Quick to download, at 58 per cent.

- Updated frequently, at 54 per cent.

Morkunas said businesses must also consider the limitations of technology
facing users.

She said if a site is too sophisticated and reliant on the latest in technology,
some Internet users may not even have the hardware or software that would
enable them to view it.

She said in website design, her company initially targets an audience that
would have 2.0 versions of Internet browsers; meaning they are a couple of
years behind current versions.

"I don't want to leave anybody at the door."

Last Updated: Friday 26 February 1999
NETWORKS


Gillian Shaw:
Canadians falling behind in e-commerce

The Vancouver Sun

Gillian Shaw, Sun Business Columnist Vancouver Sun
Despite having the cheapest Internet connections in the world and a
population second only to the United States when it comes to the number of
people per capita who are online, Canada has fallen woefully behind the
competition in electronic commerce.

That was the message Monday from Brian Anderson, deputy
executive-director of Industry Canada's Pacific Region to 400 delegates at the
first of what is to be an annual New Media conference at the University of
Victoria.

As a result of Canadian business lagging behind, this country will become an
importer of e-commerce with its consumers having to carry out their online
transactions with companies outside Canada, Anderson said.

"We don't want electronic commerce to became an import business in
Canada, which at the moment it is tending to be."

Anderson said that by the end of this year, half of all Canadians should have
access to the Internet, either through home, work or school.

"We are fast approaching the mass market threshold and that should be of
considerable interest to marketers and communicators."

Compared with their neighbours south of the border, Canadian business just
don't seem to care about the Internet as a tool for e-commerce transactions.

Anderson said that while 18.5 per cent of Canadian firms use e-commerce, a
whopping 50 per cent don't feel it will have a fundamental impact on their
business and 64 per cent say they won't even consider getting into
e-commerce.

By contrast, American businesses are flooding into the e-commerce market.
In 1997, 12 per cent of U.S. companies engaged in e-commerce, but by 1998,
that figure had risen to 40 per cent. Only 15 per cent of U.S. businesses say
they don't expect e-commerce will be much of a factor in their future.

"I can't understand why here in Canada we have such a willingness to use the
Internet for communication, yet we're not going to the next step which is to
put that communication to use and integrate it with business," Anderson said.

Financial services is one area where Canadians buck the trend, carrying out
online banking and investment transactions at a rate that is unprecedented in
the world, Anderson told the conference. In another area -- automotive
manufacturing -- by the end of this year companies that can't carry out online
transactions won't be able to act as parts suppliers to an an industry that has
become dominated by business-to-business e-commerce.

Anderson said that unless Canada embarks on an aggressive strategy to
develop e-commerce, by 2002, that sector will have only grown to $13 billion
from the $1 billion it was in 1997. If businesses here catch on to e-commerce,
and catch up, by 2002, e-commerce could account for $33 billion in Canada
or five per cent of the estimated e-commerce transactions around the world.

"If you're in business, by the time you're watching somebody else make
money at it, your competitive advantage has been washed away and you're
forced to adopt a defensive business strategy," Anderson said in an interview
after his speech.

In discussions with delegates, Anderson also blasted Canadian banks for
making it financially difficult for retailers to set up shop online.

"If you're a small-business guy and you want to get a merchant account for
your online business, the banks will ask you for three to four times the bond
they would ask of the guy who wants to set up a bricks and mortar shop,"
Anderson said. "They are setting a threshold for a merchant who does
e-commerce higher than it is for the guy who has a walk-in business."

Last Updated: Friday 26 February 1999
NETWORKS


Gillian Shaw:
New media seek B.C. tax break

The Vancouver Sun

Gillian Shaw, Sun Business Columnist Vancouver Sun
VICTORIA -- The provincial government must expand its film tax credit
program to new media if British Columbia companies are to compete with
their counterparts in Ontario, Jane Green, executive director of NewMedia
B.C. said Tuesday.

"We are asking the provincial government to level the playing field with its next
budget by giving our industry an interactive digital tax credit," said Green, who
was a speaker at the University of Victoria's New Media 99, a conference that
wrapped up Tuesday.

"We're looking at harmonizing the film incentive B.C. tax credit with new
media."

Green said it's a move Ontario has already made and the government there is
considering even greater tax credits.

"We are falling farther and farther behind Ontario, which already has the tax
credit and the industry there is now lobbying to up the percentage."

Green said her association, which represents 40 corporate members in B.C.
and 1,000 individual members, has met with Finance Minister Joy MacPhail
and Ian Waddell, minister responsible for small business, to plead its case.

"Their reaction has been favourable. At least they are being responsive. We're
hoping it will be implemented in the next budget."

NewMediaBC, which counts among its members Vancouver's Electronic Arts
-- the No. 1 producer of video games in the world -- was launched last May.

Green leaves today for Ottawa where she will meet with representatives of
new media associations from other provinces to discuss the formation of a
national industry association.

"There are definitely common issues among all of us," said Green, citing such
issues as undercapitalization and tax credits as examples.

Green told delegates at the conference that new media is underestimated as
an industry.

"By the year 2000, the worldwide market for digital products will reach $30
billion US," Green told the conference, which attracted 400 delegates from the
public and private sector and educational institutes. "By the end of this year,
it will surpass cable and broadcast TV in revenues.

"The digital age has arrived."

NewMediaBC has commissioned a study of the industry in B.C. and that is
expected to be ready within two weeks. Green said the study will be the first
measure of new media in this province.

"We have a thriving industry here, but not a lot of people know about it. We
have a small but vibrant industry. We have the potential to be a
self-sustaining, high growth, high employment industry."

The tax credit NewMedia is seeking would put the industry in line with B.C.'s
film industry in which producers are eligible for a tax credits for labour costs,
to encourage production here and training for workers in the industry.