Majority of online content audiences will not pay

European audiences of free content and services on the internet will dwarf paid-for audiences by 2011, with just 14% paying for content, according to a report issued by Jupiter Research. The research firm reports that despite significant improvements in the availability and quality of content and services, European consumer demand for paid-for content is declining. The key to this trend is seen as greater consumer awareness of the realities and limitations of digital content offerings, such as a limited catalogue or diminished file quality. But according to Jupiter Research, adopting a relatively small number of enthusiasts rather than broader, mainstream audiences could be the answer to future revenue growth for paid services. The company suggests online music and games will consolidate their current market-leading positions and will generate the largest paid content revenues in 2011 -- €1.4bn (£958m) and €1.0bn (£685m) respectively, accounting for 60% of the total when combined. Security and safety is set to become the largest paid services sector, with revenues of €1.3bn (£890m). Mark Mulligan, vice-president at Jupiter Research, said that apart from a few notable exceptions such as music, the European online paid content and services market has failed to make significant headway. Mulligan said: "The internet remains a predominantly free, advertising supported medium. Though premium revenues will reach €6.8bn in 2011, the vast majority of online content and services will not pay. "There is a clear need for content owners to explore ways in which they can explicitly share in advertising revenues to offset modest direct revenues online and to reach elusive, typically young, non-paying online audiences." The full Jupiter Research report is available to clients via the company's website.

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