Online Content Finding Its Audience

US consumers spent around $1.3 billion on online content during 2002 (see Online Content Sales Surge In 2002) but this did include a 7% dip in the fourth quarter. This appears to have been an aberration as figures from a new report by comScore Networks and the Online Publishers Association show that expenditure rose to $368 million in Q1 2003 and hit a new record of $380 million in Q2.

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