Online Content Sales Surge In 2002

Research has shown that businesses and consumers are showing an increased willingness to pay for internet content (see Online Content Revenues Set To Rise) and this is demonstrated by the fact that revenues in the final quarter of last year totalled $338 million, up 48.5% on the same three months of 2001. This compares favourably with the 23% growth in ecommerce that occurred over the same time period.

The figures show that spending actually fell by $23 million between Q3 and Q4 last year (see US Spend On Internet Content Doubles In A Year) although this can be attributed to seasonal and general economic factors and there is no sign that the demand for paid content is slowing.

“The year 2002 will go down as the year in which the conventional wisdom about paid online content changed,” said Michael Zimbalist, executive director of the Online Publishers Association. “Whether or not consumers will pay for content is no longer a matter of debate. Clearly, they will.”

The report states that average spending per customer increased only 4% between Q4 2001 and Q4 2002, suggesting that the growth rates in paid content revenue are due to an increase in consumers rather than additional spending by existing customers. In fact, the number of US consumers paying for online content rose from 10 million in the final quarter of 2001 to 14.3 million at the end of 2002.

Annual subscriptions remain the dominant pricing model, making up 41% of online content sales although many gamers and news site subscribers prefer to make monthly payments. The top three categories – Personals/Dating, Business/Investment Content and Entertainment/Lifestyles – accounted for 63% of spending in 2002, up from 59% in 2001.

US Consumer Spending On Online Content, By Category ($ million)
Category	2001	2002	% Change
Personals/Dating	72.0	302.1	320
Business Content/Investment	214.3	292.0	36
Entertainment/Lifestyles	112.0	227.5	103
Research	57.9	106.6	84
Community-Made Directories	46.1	91.1	98
Games	46.5	72.0	55
General News	51.8	70.0	35
Personal Growth	24.7	44.3	79
Credit Help	32.4	40.4	25
Greeting Cards	2.1	36.2	1624
Sports	10.0	30.3	203
Source: comScore Networks/OPA, March 2003