Online Content Finding Its Audience
Spending on online content in the US increased by 23% to $748 million in the first two quarters of 2003 as the market showed signs of maturing. Further growth is anticipated as broadband spreads its wings and a whole new raft of paid-for services become available.
The year-on-year spending increase of 23% in the first half of 2003 is less significant than in H1 2002 when the online content sector grew by 131%. However, the market has now progressed beyond the fledgling stage and this is no apparent cause for concern.
“While slowing growth is indicative of a maturing market, we may also be in the midst of a quiet period during which content providers are readying new premium paid services for an increasingly receptive public,” stated Michael Zimbalist, executive director of the Online Publishers Association.
| US Consumer Spending On Online Content | ||
| Year | Period | Spending ($m) |
| 2001 | Q1 | 118 |
| Q2 | 148 | |
| Q3 | 174 | |
| Q4 | 225 | |
| 2002 | Q1 | 294 |
| Q2 | 316 | |
| Q3 | 359 | |
| Q4 | 336 | |
| 2003 | Q1 | 368 |
| Q2 | 380 | |
| Source: comScore Networks/OPA, September 2003 | ||
It is estimated that there are around 16 million paid content consumers in the US, equivalent to 11% of the total online universe. By comparison, 26% of the online population engaged in ecommerce activity during Q2 2003 but the potential is beginning to be realized. The number of paid content buyers grew by 25% in the second quarter while internet users increased by just 8% year on year.
Some 89% of paid content revenues came from subscriptions in the first half of 2003, up from 86% for the whole of 2002. Monthly revenues accounted for 46% of all subscription revenues while annual subscriptions accounted for 45% in Q1 and Q2.
The Personals/Dating category continues to drive overall growth in paid content, accounting for £214.3 million of consumer spend in the first two quarters. The top three categories (Personals/Dating, Business/Investment and Entertainment/Lifestyles) make up 65% of all consumer content dollars, compared to 61% in the same period last year.
| US Consumer Spending On Online Content, By Category ($ million) | |||
| Category | H1 2002 | H1 2003 | % Change |
| Personals/Dating | 121.5 | 214.3 | 76.4 |
| Business Content/Investment | 139.0 | 168.9 | 21.5 |
| Entertainment/Lifestyles | 110.2 | 102.5 | -7.0 |
| Research | 50.3 | 47.3 | -6.0 |
| Community-Made Directories | 44.2 | 46.3 | 4.8 |
| Games | 20.8 | 41.4 | 99.0 |
| General News | 34.5 | 39.2 | 13.6 |
| Personal Growth | 35.9 | 34.8 | -3.1 |
| Credit Help | 20.6 | 20.4 | -1.0 |
| Greeting Cards | 18.3 | 18.8 | 2.7 |
| Sports | 13.9 | 14.4 | 3.6 |
| Source: comScore Networks/OPA, October 2003 | |||