Online Content Sales Soar, Survey Says

Gretchen Gallen
NEW YORK – A new study from New York-based Online Publisher's Association says that spending on Internet content has shown a considerable spike over the past year and continues to show steady growth.

In a study done in conjunction with comScore Networks, a consumer research firm, the two companies determined that spending in the online content sector shot up 19 percent in 2003 to a $1.56 billion industry.

Among the top-selling content categories, subscription-based business models continue to be the dominant pricing model, says the study, which drew its research findings from 2003 results.

Among paid content revenues, 89 percent came from subscriptions in the first half of 2003, and of those subscriptions, 44 percent were from monthly payments. Annual subscription rates, however, took a slight fall from 47 percent in 2002 to 44 percent in 2003.

The top three categories that saw the strongest growth were personals/dating, business/investment, and entertainment/lifestyles, which takes the lead and accounts for 65 percent of all consumer content dollars.

The study determined that single payments and mid-range payments of between $5 and $50 accounted for the bulk of all online subscription fees in 2003, although the growth of micro payments also saw incremental growth of 8 percent, up 2.6 percent the previous year. Revenues from payments of $50 saw a larger increase of up to 20 percent.

Growth in online paid content penetration was overwhelmingly generated by customer conversion, the study states. Year over year, the total number of paid content purchasers grew 22.3 percent in the first quarter to 15.2 million, and 24.6 percent in the second quarter to $16.0 million.

The study also found that the total Internet audience grew from 7.8 percent in the first quarter to 8.3 percent in the second quarter.

All totaled, U.S. consumers spent $748 million for online content in the first two quarters of 2003, marking a 23 percent increase over the same period in 2002.