Survey Suggests Consumers Will Pay for Online Content

By Gary Kim December 30, 2010

One of the great fears content owners have had is that younger users, in particular, would refuse to pay for any kind of online content. That seems to not be the case, though.

About 65 percent of U.S. Internet users report they have paid to download or access some kind of online content from the Internet, ranging from music to games to news articles, the Pew Internet and American Life Project reports. Music, software, and apps are the most popular content that Internet users have paid to access or download, although the range of paid online content is quite varied and widespread.

This is roughly the same as the percentage of Internet users who have said in other Pew Internet surveys that they had purchased tangible goods online such as books, music CDs, toys, or clothing. In a survey in May 2010, 66 percent of Internet users said they had done that. 

The average expense for those who have paid for content was approximately $47 per month for material they have downloaded or accessed, including both subscription (an average of $12 per month) and individual file access (an average of $22 per month). However, some extremely high-end users pull the average higher, with most purchasers spending about $10 per month, Pew researchers said. 

Software and music are the most-often purchased apps, at 33 percent each. About 21 percent reported buying mobile phone apps or tablet PC apps, while 19 percent said they had bought games.

About 18 percent have paid for digital newspaper, magazine, or journal articles or reports, while 16 percent have paid for videos, movies, or TV shows. 

Researchers at the Boston Consulting Group found in one study that 48 percent of U.S. Internet users would pay to read news online, including on mobile devices. That should be encouraging news for some print content providers. Still, the respondents did not indicate they would be willing to pay much. 

U.S. respondents indicated $3 a month was about their level of comfort. Of course, respondents often say one thing and do another, meaning they might be willing to spend significantly more, or significantly less. 

About 11 percent have paid for members-only premium content from a website that has other free material on it. 

Some 15 percent have paid for ringtones. About 10 percent have paid for e-books. 

The survey of 755 Internet users was conducted between Oct. 28 and Nov. 1.

The implications for content owners and distributors are not entirely clear. Some of the online content purchasing seems to be on-demand, a la carte, and at a low level. One might argue that a better business model for a provider is a subscription approach, especially when an incremental amount can be added to a subscription a subscriber is already used to paying for.

As of August 2009, 81 percent of U.S. households subscribed to a television service (satellite TV, basic/premium cable, or fiber-optic television service). A similar percentage of households (76 percent) paid for Internet subscriptions. Seventeen percent subscribed to an online music service or satellite radio; and 14 percent subscribed to online gaming subscription services.

Overall monthly per-capita entertainment-content subscription spending rose to $115 a month, on average, says NPD. That's a measure of per-person spending, not per-household spending, so the household amounts are correspondingly larger. 

The larger point here is that consumers have demonstrated a willingness to pay for Internet-delivered content. The issue is perceived value compared to cost, as well as the availability of reasonable substitutes. 

Gary Kim is a contributing editor for TechZone360. To read more of Gary’s articles, please visit his columnist page.

Edited by Tammy Wolf

Contributing Editor

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