US consumers spent a massive $987 million on online content during the first half of 2005, enjoying a 16% increase year on year and reflecting a surge in entertainment spend, according to a new report from the Online Publishers Association.
Boosted by rising sales in digital music, the research shows the Entertainment/Lifestyles sector to have overtaken the Personals/Dating division to become the leading paid content category, with consumers spending $264.8 million in the first half of this year.
Explaining the internet’s healthy performance, Michael Zimbalist, president of the Online Publishers Association said: “Consumers are turning to the web for entertainment and music more and more, and as they do sales on content continue to rise.”
He continued: “We expect this trend will continue as new products such as the Video iPod and other mobile devices play greater roles in digital content distribution.”
The research revealed that the Entertainment/Lifestyles category was the fastest growing paid content category in the first six months of 2005, up 44.8% over the same period last year.
Out of a total US online population of 171 million in the second quarter of 2005, 19.4 million were shown to have paid for online content, an increase of 15.6% from the 16.8 million who paid for content online in Q2 2004. This growth is substantially greater than the increase of the internet population during the same time period.
The internet’s marriage with the entertainment industry is confirmed in the latest figures for UK broadband usage released from Nielsen//NetRatings, which claim that websites offering entertainment content are the best positioned to exploit the rich media capabilities of broadband, giving high speed users a more fulfilling experience (see Nielsen Lifts Lid On Broadband Usage).
PricewaterhouseCoopers (PwC) in its Entertainment and Media Outlook forecasts the sector to enjoy steady growth over the next four years, aided by the internet and the impact of new technology (see Entertainment Industry Continues To Enjoy Strong Performance).
These predictions follow on from the estimates published earlier this year by PwC, projecting the overall global entertainment industry to rise at a compound annual growth rate of 7.3%, reaching $1.8 trillion in 2009 (see Strong Growth For Entertainment Industry Led By Online Games).
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