Net users still hesitant to pay
Published: 20 Mar 2002 15:45 GMT
Even though consumers are growing more comfortable with buying goods on the Web, people are hesitant about paying for online content, according to a study released on Tuesday.
The percentage of online adults willing to pay for content on the Internet decreased to 42 percent from 45 percent in August 2000, according to a study conducted by market researcher Jupiter Media Metrix. That means people still expect to find news, music, games and video clips for free on the Web despite industry trends to the contrary.
"We've seen a lot of consumer reluctance to pay for content online," Jupiter Media Metrix analyst Andrew Peach said. "It's difficult to find a mass audience."
In this era of tightening advertising budgets and economic malaise, media giants, entertainment companies and others have turned to charging people to access their content. Companies such as Yahoo! and AOL Time Warner in particular have begun exploring alternatives to giving away information and services. For example, Yahoo! is mulling a for-pay streaming video service while AOL Time Warner's CNN.com is planning to charge for its news videos.
But content providers are unlikely to find people spending as much on Internet subscriptions as they do offline. Revenue for online "general content," which includes audio, video and adult content, will reach just under $1bn for 2002 and grow to $2.3bn in 2006, according to Jupiter Media Metrix. In contrast, newspaper circulation revenue reached more than $11bn last year, while magazine circulation reached $10bn, the researcher said.
Still, not all hope is lost. The increase in adoption of broadband into people's homes could jump-start other types of online content, such as music, games, video on demand and subscriptions.
In total, paid online content will grow to $5.8bn by 2006, up from $1.4bn in 2002, the study said. This growth could help content providers and online aggregators to create new businesses, Jupiter Media Metrix said.
"Broadband allows the Internet to look more like the cable TV format," Peach said.
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