March 5, 2003 11:17 AM PST

Consumers pay up for online content

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More Americans cough up cash online

August 1, 2002
People in the United States spent $1.3 billion for subscription services with Internet publishers last year, with a large portion going to online dating sites, a new survey found.

The 2002 figure nearly doubled that of consumer spending on Web content in 2001, according to a report from trade group Online Publishers Association and market research firm comScore Networks.

But revenue from paid online content dropped to $338 million in the fourth quarter from $361 million in the previous quarter, the study found, despite a 49 percent year-over-year rise in the market. The OPA attributed the year-end decline to the effects of holiday shopping on people's budget priorities, along with the weakened economy. Still, in contrast, U.S. e-commerce sales grew by only 23 percent year-over-year.

"The year 2002 will go down as the year in which the conventional wisdom about paid online content changed," Michael Zimbalist, executive director of the Online Publishers Association, said in a statement. "Whether or not consumers will pay for content is no longer a matter of debate. Clearly, they will."

The clear winners in Web content sales were online dating sites. Sales from Internet personals and dating services in 2002 hit $302 million, up nearly threefold from $72 million in 2001. Combined with the categories of financial services and entertainment/lifestyles, personals accounted for 63 percent of online content spending in 2002, the study found.

The number of people paying for content on the Web grew by nearly 4 million in 2002, according to the OPA. Annual subscriptions were the most popular among those consumers, followed by monthly payment systems on news and other sites. Micropayments also caught on this year, with payments of under less than $5 for content growing by 707 percent from the previous year. Still, minipayments for content comprised less than 1 percent of sales and generated $9.6 million of the total revenue, chiefly from general news sites.

The top five destinations for paid content were Yahoo, Match.com, RealNetworks' Real.com, Classmates.com and Dow Jones' WSJ.com, according to the report. Other top sites for content sales were Weightwatchers.com, Consumerreports.com, ESPN.com and Playboy.com.

 

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