Pay-for-content model forecast to remain miniscule

16 May 2007

Non-paying content and services audiences will dwarf paying audiences in Europe by 2011, with just 14pc of people paying for stuff on the internet, a new report from Jupiter Research has claimed.

Jupiter said that despite significant improvements in the availability and quality of content, success stories are relatively thin on the ground and European consumer demand is actually falling.

The reason cited for this trend is greater consumer awareness of the realities and limitations of digital paid content offerings such as a limited catalogue, diminished file quality and DRM (digital rights management) interoperability limits.

”With a few notable exceptions such as music, the European online paid content and services market has failed to make significant headway,” said Mark Mulligan, vice-president at JupiterResearch and lead author of the report.

“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,” Mulligan said.

Music and games will consolidate their current market-leading positions and will generate the largest paid-content revenues in 2011 of €1.4bn and €1bn respectively. These will account for 60pc of the total content market combined.

Security and safety will be the largest paid services sector with revenues of €1.3bn.

“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,” Mulligan warned.

By John Kennedy