Users Still Resistant to Paid Content

Resistance to paying for online content spans the globe, according to surveys conducted in the U.S., Australia, and Europe. A study conducted by RampRate and Synovate of nearly 1,400 U.S. Internet users revealed that 68 percent dislike paying for streaming audio and video, with 47.5 percent holding to the principle that the Internet should be free and 20 percent agreeing with the statement that paying is “cumbersome and a turn-off.”

Only a mere 2.5 percent of those surveyed said they paid for premium streaming content willingly, with the percentage rising to 4 percent among those amenable to paying if the content were better. If compelled to pay, 11 percent would prefer pay-per-view to a monthly subscription.

“While paying for online streaming video and audio content appears to be an unstoppable trend, our survey clearly shows that if consumers had their druthers, they wouldn’t buy it,” said Tony Greenberg, CEO, RampRate. “That said, it’s clear from consumer behavior that they are buying, perhaps because content providers are giving them a choice — some streaming content for free, and even better content for a small fee. That will likely prove to be an intelligent way to grow the market, incentivize content providers and educate consumers.”

The report cites AccuStream iMedia Research measurements of more than 3.9 billion video streams being served during 2002 — a 52 percent increase over 2001 — translating into a valuable revenue stream to those that can successfully convert all the users into paying customers.

The RampRate/Synovate survey also revealed a profile of those that are most likely to pay for streaming content, with an almost equal division among income levels: 46.1 percent of those making more than $75,000 annually disliked paying for streaming content on principle, compared to 48.2 percent who make between $25,000 and $50,000 per year.

Nearly half (49.5 percent) of the individuals who objected to paying were white, and more than one-quarter (26 percent) had college degrees or a post-graduate education. More than one-half (57 percent) of those over aged 65 disliked paying for streaming audio and video on principle and believe the Net should be free, as opposed to 43.5 percent of 18-24 year-olds.

Even further analysis indicated that 71 percent of residents living in the West and Northeast dislike paying for content, versus 68 percent of the Midwest and 63 percent of the South.

Meanwhile, on the other side of the globe, Jupiter Research (a unit of this site’s corporate parent) found similar reluctance to paying for Internet content. One-half of consumers surveyed indicated they would not pay for any type of content or services on the Internet, compared to their findings of 63 percent of online U.S. consumers.

In a 2003 report that analyzed payment willingness among broadband and dial-up users, those who surfed at high speeds seemed more open to paid content than their narrowband counterparts.

If information/entertainment/services
were no longer free on the Internet,
which of the following would you most
likely pay for?
Type of Content Broadband Dial-Up
Digital music 16% 12%
Business/finance news 17% 12%
Newspaper archives 20% 12%
Digital photos 12% 6%
Online video 11% 6%
Base: 757 dial-up users, 94 (broadband users), Australia, 2003
Source: Jupiter Research

Jupiter analysis of Europe indicates that €2.36 million in paid online content is likely to be generated in 2007, with the preponderance coming from online games.

Paid Content Revenues in Western Europe,
(Euros in millions) 2002 2003 2004 2005 2006 2007
Content revenues
General news
and archives
6 19 32 46 61 78
5 38 88 162 277 424
266 297 330 363 393 422
Financial and
business news
22 41 61 82 101 121
Other content
(e.g., horoscope,
sports, health,
10 27 53 84 127 183
Digital music 9 26 65 136 285 550
Online games 43 96 176 285 418 589
Total content
361 544 806 1,158 1,662 2,366
Includes: Germany, Austria, Switzerland, UK, Ireland, Sweden,
Denmark, Norway, Finland, Netherlands, Belgium, Luxembourg,
France, Italy, Spain, Portugal, and Greece.
Source: Jupiter Research, January 2003

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