Few Irish consumers willing to pay for content online

8 Mar 2012

Only 15pc of Irish consumers currently pay for any type of online content compared with 27pc globally, a new study into consumer digital trends by KPMG reveals. Fears for privacy and security are seen as the biggest barriers for new business models.

The study by KPMG found that almost three-quarters (73pc) of Irish consumers are unwilling to pay for content they previously could get for free compared with 56pc worldwide.

However, 26pc say they would be willing to pay for content that is unavailable anywhere else.

Some 52pc say the reason for buying content online is because it is of a higher quality than comparable free content.

The research revealed that almost half (49pc) of consumers now have a smartphone, compared with just 10pc in 2010.

Just more than one-third (37pc) have downloaded five apps or more in the last year compared with only 9pc of smartphone users worldwide.

Some 63pc of smartphone users spend more than one hour a day on social networking sites while only 76pc of Irish respondents have a landline.

More than a quarter (26pc) prefer watching TV programmes and films on mobile computers.

“This trend has led the Irish Government to examine the idea of a broadcasting licence fee regardless of the device used to access content as a replacement for the current TV licence fee,” explained Eamonn Russell, head of Technology, Media & Telecommunications at KPMG in Ireland.

Security and privacy a stumbling block for the Irish

However, despite Irish people’s willingness to adopt new technologies, the KPMG study shows there’s considerable conservatism when it comes to new digital models.

Irish-based financial institutions, in particular, face challenges in this regard, with only 38pc of Irish respondents citing financial institutions as being the most trusted to keep online personal and financial data secure, compared with 56pc of respondents worldwide.

In a near reversal, secure internet payment providers are trusted by less than a third of consumers (30pc) globally but by more than half (51pc) in Ireland.

“It is clear that the trust factor is playing an increasingly important role in e-commerce and getting it right at the start is vital,” Russell explains.

Meanwhile, and perhaps reflecting lower disposable income trends, just more than one in 10 (11pc) of Irish consumers are very willing to have their online usage tracked if it means lower costs or free content compared with only 4pc in 2010.

Businesses with customer data are increasingly looking to monetise their information by sharing it with others as a potentially significant new revenue source – but it’s also a very sensitive topic from both a consumer and legal standpoint.

Power and influence

Online information is also playing an increasing role in influencing buying decisions. When making purchases, Irish consumers cited being “influenced” by online information sources, such as Facebook fan pages (23pc), comparison sites (29 pc) and online discount voucher sites, such as Groupon (33pc).

Some 60pc of Irish consumers are more likely to buy books and CDs online than in store as compared with 55pc elsewhere in Europe and 48pc worldwide. Even in the food and grocery category, 24pc of Irish consumers surveyed are now more likely to shop online than in-store, highlighting yet another challenge facing traditional retailers.

For mobile, internet and telecom service providers, the message continues to be very clear: the overriding factors for Irish consumers in choosing or switching providers is price (67pc) and quality of service (54pc), as opposed to device selection (23pc) and exclusive content or services (15pc).

Indicative of the potential for massive challenges in certain sectors, 18pc of Irish consumers indicated that they plan to get rid of their landline in the next 12 months and use their mobile only.

Meanwhile, 15pc of those surveyed planned on eliminating their cable or satellite TV service altogether. Amongst the reasons given were 52pc claiming they were ‘happy with video content online’ and 41pc noting that their existing services ‘don’t allow them to pay for the channels they want’.

Anna Scally, tax partner with KPMG in Dublin, explained: “Irish consumers are increasingly willing to adopt new technologies and digital business models, and that spells big risks and opportunities for almost every business – what’s exciting for Ireland is that so much of the digital world they use is being developed and managed from Ireland.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years