August 01, 2002

US Customers Spending $300 Million in Fee-Base Content in Q1 2002
The Online Publishers Association and comScore have release a report on the increase in customer spending for online content. Rick Bruner brings it to our attention as does the New York Times and this Press Release.

This is a great report and really validates the belief that fee-based content can be a substantial revenue-stream for some online publishers. Customer spending for Q1 2002 was $300 million, an increase of 155% over Q1 2001. Whereas the newspaper advertising to subscription ration is 3 to 1 the online ratio is 11 to 1. There is someways to go, but it shows that online revenue streams are diversifying.

One thing to keep in mind here is, not all content can make it as fee-based. In fact, I doubt very few content sites will. This report not only shows that people will pay for content, but it takes a special kind of content to make it. Fee-based content must either be highly unique and/or valuable or tied to a service.

Highly Unique and/or Valuable
The report breaks content into several categories: Business Content, General News, Entertainment, etc. Within each category you can start to see how and why these sites charge for content. Under Business, top performers are, eMarketer, Here, the content is information. Valuable, unique information. Excite couldn't get away with charging for access to their news stories. But WSJ can because they are second to none. Playboy, which falls under Entertainment, also ranks up there. Their content is also second to none (so I've heard, of course ;-)). Consumer Reports delivers top-notch product research.

Content Tied to a Service
What gets me is most of the fee-based content isn't information based. The "content" fullfills a need and provides a service. sets you up on a date. provides a means to receive streamed content. enables you to send greeting cards. Online gaming sites replace your Nintendo and let you play against people online. These are really online services with an element of content.

So what does all this mean? Primarily nothing we already didn't know. You need to be unique and have value to sell your content online. What we may not have known, is people are willing to pay for content. 12.4 million people. $300 million worth in one quarter.

No comments: