Source: adapted from The Economist, April 2nd 2005.

US Household Penetration of Telecommunications, 1920-2008

The diffusion of telecommunications follows a typical logistic curve from an early phase of adoption, a fast penetration of the technology in the consumer market and then a slowdown phase as the market is saturated and the technology has achieved maturity and ubiquity. Some communications standards, such as the VHS, are also marked by obsolescence since the standard has officially been abandoned, to be replaced by the DVD, which itself is likely to be replaced by a new standard (Blue ray or video streaming?).

An important element that favors diffusion of a media technology is the provision of content. To help radio sales in the 1920s, radio manufacturers such as RCA started to acquire radio stations and sponsor various entertainment shows. This led eventually the development of "soap operas" as the advertising potential of the new media was recognized by consumer products manufacturers in the 1930s. A similar process took place with the television in the 1950s and 1960s. Even with the digital revolution, the issue of providing content in order to sell devices remains fundamental. For instance, Apple started the digital store iTunes to support the sales of its iPod devices. So far profits from digital downloads have remained elusive.

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