Buying and selling e-content

People Actually Do Pay for Online Content Jim Jansen Senior Fellow Pew Internet & American Life Project

Thanks! Great to be here!

Who is Jim Jansen?
Senior Fellow at the Pew Research Center (Pew Internet & American Life Project) - http:// www.pewinternet.org
Associate professor at College of Information Sciences and Technology, The Pennsylvania State University , USA
Active research and teaching efforts in the web area - http://ist.psu.edu/faculty_pages/jjansen/
Forthcoming book, Understanding Sponsored Search (Cambridge) … theory of keyword advertising
Recent Pew Internet reports focusing on ecommerce , income effect on internet usage , and online product research

What is Pew Internet?
Part of the Pew Research Center
A nonpartisan “fact tank” based in Washington, DC
Provide quality and objective data to thought leaders and policy makers
Pew Internet is one project of the Center
All findings are based on nationally representative telephone surveys …
U.S. adults age 18+ or U.S. teens ages 12-17
Drawn from dual-frame (landline/cell phone) samples
English or English and Spanish

Do people actually pay for online content?
Yes, they do …

In fact, ….
65% of internet users have paid for online content
… and they spend about $10 per month for this content

Before we look at the details, …
Let’s examine the context in which this occurring.
There are three on-going revolutions in technology and access …

#1 Internet and Broadband Revolution

Has stabilized Probably slow growth for years ahead

Broadband access at home transformational, internet becomes a central hub for:
information
communication
entertainment
More importantly, content creators! Changed the media landscape! 70% 66%

#2 Wireless Connectivity Revolution

Cell phone owners: 85% of adults 96% 90% 85% 58% Cell phone ownership has outpaced or is on par with internet access for all age groups!

Mobile internet connectors: 57% of adults 62% 59% 55%
Mobile internet connectivity with:
Cell phone – 39%
Laptop, etc. – 87%
Always on - access anytime and anywhere!

#3 Social Networking Revolution

48% of American adults use social networking sites. The fastest growing is the 50+ age cohort!

And, folks aren’t using just one SNS! If trends continue, the majority of American adult internet users will have profiles on multiple social network sites. Currently, a majority of social networking site users already do (52%). Changing social roles, workforce, culture, politics, news sources, community, commerce, participation, etc.

The impact on information … Dramatic effects on people’s relationship to information, media, and electronic content

So, what does this mean for purchasing online content?
This is what we are seeing …
65% of internet users have purchase some type of online content!, and are spending about $10 per month

What do we mean by online content?
Online content in this case refers to intangible digital products (i.e., software, articles, music, etc.). This is in contrast to …
tangible products (e.g., hard-copy books, clothes, computers, etc.) that one can touch or
tangible services (i.e., hotel reservations, airline ticket, rental cars, etc.) that one engages after purchase.

Quick Methodological Note
Rather than just ask if a person had purchased online content or not …
We asked participants whether or not they had purchase 16 different types of digital content

Breakdown by type of content
33% of internet users have paid for digital music online
33% have paid for software
21% have paid for apps for their cell phones or tablet computers
19% have paid for digital games
18% have paid for digital newspaper, magazine, or journal articles or reports
16% have paid for videos , movies, or TV shows
15% have paid for ringtones
12% have paid for digital photos
11% have paid for members-only premium content from a website that has other free material on it
10% have paid for e-book s
7% have paid for podcasts
5% have paid for virtual items to use in video or computer games
5% have paid for “ cheats or codes ” to help them in video games
5% have paid to access particular websites such as online dating sites or services
2% have paid for adult content
Low of 2% High of 33% Let’s take a quick look at these percentages and content types

Music and Software Lead the Way
16% have paid for videos, movies, or TV shows
10% have paid for e-books
5% have paid for tools or materials to use in video or computer games
5% have paid for “cheats or codes” to help them in video games
Entertainment and commerce have always been big drivers of internet usage.

Apps, games, and information are next
The increasingly high penetration of smart phones and tablets drivers of apps usages.

Multimedia, Premium content, and books, follow
Entertainment and leisure pursuits are motivators across several types of online content.

Podcasts, stuff for games, and access come next
Again, entertainment and leisure pursuits.

And, finally, adult content
At least some people tell the truth!

Misc.
6% have paid for some other type of content

Purchasing online content
That’s where the 65% of internet users having purchased online content came from.

Number of online content types purchased by internet users
75% have purchased multiple types of online content

Much do they spend?
Average monthly spend was $47
High end users skewed the average
Most purchasers spend approximately $10 per month

Number of types of payment methods
23% of internet users pay for subscription services
16% pay for downloading an individual file
8% pay for accessing streaming content

Demographic factors
Similar percentages of men and women internet users pay for online content (except software, which significantly more men purchase).

Demographic factors
There does not appear to be a racial divide associated with accessing online content.

Demographic factors
Internet users between the ages of 30-49 are the most likely to have purchased most kinds of content.

Demographic factors
Those with college degrees or some college generally are more likely to purchase online content.

Demographic factors
There is a correlation between income levels and paying for online content, with those in higher-income bracket households more likely to pay for online content.

Take Aways
Technology and access is changing (has changed) the value , dissemination , and relationship attributes of information
Percentage of internet consumers similar for products, services, and digital content (all about 65%)
Also about the same as the households with broadband access (66%)

Related Thoughts
Didn’t look at B2B purchases (e.g., search engines purchasing AP newsfeeds and Twitter feeds, etc.)
Power law distribution (i.e., Netflix for movies, iTunes for music, etc.)
Line between bits and atoms blurry (i.e., can get content both digitally and hard copy)

Related Thoughts
Also, attitude shifts of purchasing online … perhaps based on context, use, and age

Sign that I am officially getting old. I had the option today to pay for or pirate software – I decided to pay.

Follow-on Discussion
Happy to chat (either today or contact me)
Email [email_address]
LinkedIn http://www.linkedin.com/in/jjansen
Twitter jimjansen
Complete research in: Jansen, B.J. (2010) 65% of internet users have paid for online content. Pew Internet Report. http://www.pewinternet.org/Reports/2010/Paying-for-Content.aspx

Use of the internet in higher-income households
http://www.pewinternet.org/Reports/2010/Better-off-households.aspx
Online Product Research
http://www.pewinternet.org/Reports/2010/Online-Product-Research.aspx
Generations and their gadgets
http://www.pewinternet.org/Reports/2011/Generations-and-gadgets.aspx
Wikipedia, past and present
http://www.pewinternet.org/Reports/2011/Wikipedia.aspx
Generations 2010
http://www.pewinternet.org/Reports/2010/Generations-2010.aspx
Related Reports Available at Pew Internet Pew Research uses a freeimum model. All reports, surveys, and data are available and free. Material from 2000 to the present!

Thanks! (welcome questions!) People Actually Do Pay for Online Content Jim Jansen Senior Fellow Pew Internet & American Life Project

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Buying and selling e-content

by Pew Research Center's Internet & American Life Project

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Buying and selling e-content Presentation Transcript