US sees Increase in User Willingness to Buy Content

A marked increase in willingness to pay for information is apparent in the latest figures from US-based Online Publishers Association. Consumer spending for online content is growing rapidly after seven years of anxiety in the information provision market. What happens in the US in the digital market tends to happen in Europe within a couple of years.

OPA figures for the US reveal that:
* US consumers spent $675 million for online content in 2001; this represents an
increase of 92% compared to calendar year 2000,
* US consumers spent $300 million for online content in Q1 2002, an increase of
155% compared to Q1 2001.

Spending is spread across a diverse range of categories, the top three categories being Business Content, Entertainment and Personals/Dating, which have accounted for 59% of spending for online content.

Eight other categories – Research, General News, Games, Community Directories, Credit Help, Personal Growth, Sports and Greeting Cards – account for 41% of consumer spending. Spending in nearly all categories experienced year-over-year growth of greater than 100%, as of the first quarter of 2002.

Subscriptions are the dominant pricing model for online content sales. Annual subscriptions accounted for 49% of paid content sales in 2001; monthly subs accounted for 31%; single purchases accounted for 15% of content sales.

Renewal rates for annual subscriptions averaged 72%, while 74% of those who subscribed for monthly payments were still visiting fee-restricted content areas 12 months later. The average conversion rate for those who signed up for free trial offers becoming paid subscribers was 17.4%.

A growing number of US consumers are paying for online content: 12.4M US consumers paid for online content in the first quarter of 2002, up by 5.3M from the number who paid for content in Q1 of 2001. Meanwhile, the average spending per consumer increased 46% in Q1 2002 compared to Q1 2001.

The average price for annual subscriptions online was $49.69 in 2001. The average price for monthly subscriptions online was $8.46 in 2001. The average price for single content items purchased online was $17.89 in 2001.

Online content revenue is concentrated among 100 publishers, while 1,700 sites are estimated to be to charging for content online. 85% of money spent by US consumers for online content goes to 50 sites. (97% of money spent by U.S. consumers for online content goes to 100 sites). The top five sites based upon paid content revenue in 2001 were Real.com, WSJ.com, Match.com, Yahoo.com and ConsumerReports.org.

The OPA works with research firm comScore Networks to provide regular reports on the market for paid online content.

Associated Link: Online Publishers Association

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