Buying and selling e-content

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  • Rise of broadband at home was transformative – internet becomes a central info and communications hub in the home after the switch from dial-up. People do more stuff online; privilege the internet over other info sources in many cases; report better outcomes from internet use, and, most importantly become content creators. Two thirds of adults and 80% of teens are content creators. This is the big change the internet has introduced to media landscape. Probably take a minute to say this.
  • Quick rundown of growth of cell ownership – 30 seconds
  • Rundown of mobile connectivity Cell phones – 39% of cell owners Laptops – 87% of laptop owners Overall that adds up to 57% of adults
  • Quick rundown of our data on rise of social networking. This amplifies long term trends dating to 20 th century in technology, new social roles, workforce structure, politics and culture. Right now, 48% of American adults use social networking sites and fastest growth is taking place in the 50+ age cohort
  • Buying and selling e-content

    1. 1. People Actually Do Pay for Online Content Jim Jansen Senior Fellow Pew Internet & American Life Project
    2. 2. Thanks! Great to be here!
    3. 3. Who is Jim Jansen? <ul><li>Senior Fellow at the Pew Research Center (Pew Internet & American Life Project) - http:// www.pewinternet.org </li></ul><ul><li>Associate professor at College of Information Sciences and Technology, The Pennsylvania State University , USA </li></ul><ul><li>Active research and teaching efforts in the web area - http://ist.psu.edu/faculty_pages/jjansen/ </li></ul><ul><li>Forthcoming book, Understanding Sponsored Search (Cambridge) … theory of keyword advertising </li></ul><ul><li>Recent Pew Internet reports focusing on ecommerce , income effect on internet usage , and online product research </li></ul>
    4. 4. What is Pew Internet? <ul><li>Part of the Pew Research Center </li></ul><ul><li>A nonpartisan “fact tank” based in Washington, DC </li></ul><ul><li>Provide quality and objective data to thought leaders and policy makers </li></ul><ul><li>Pew Internet is one project of the Center </li></ul><ul><li>All findings are based on nationally representative telephone surveys … </li></ul><ul><ul><li>U.S. adults age 18+ or U.S. teens ages 12-17 </li></ul></ul><ul><ul><li>Drawn from dual-frame (landline/cell phone) samples </li></ul></ul><ul><ul><li>English or English and Spanish </li></ul></ul>
    5. 5. Do people actually pay for online content? <ul><li>Yes, they do … </li></ul>
    6. 6. In fact, …. <ul><li>65% of internet users have paid for online content </li></ul><ul><li>… and they spend about $10 per month for this content </li></ul>
    7. 7. Before we look at the details, … <ul><li>Let’s examine the context in which this occurring. </li></ul><ul><li>There are three on-going revolutions in technology and access … </li></ul>
    8. 8. #1 Internet and Broadband Revolution
    9. 9. Has stabilized Probably slow growth for years ahead
    10. 10. <ul><li>Broadband access at home transformational, internet becomes a central hub for: </li></ul><ul><li>information </li></ul><ul><li>communication </li></ul><ul><li>entertainment </li></ul>More importantly, content creators! Changed the media landscape! 70% 66%
    11. 11. #2 Wireless Connectivity Revolution
    12. 12. 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!
    13. 13. Mobile internet connectors: 57% of adults 62% 59% 55% <ul><li>Mobile internet connectivity with: </li></ul><ul><li>Cell phone – 39% </li></ul><ul><li>Laptop, etc. – 87% </li></ul>Always on - access anytime and anywhere!
    14. 14. #3 Social Networking Revolution
    15. 15. 48% of American adults use social networking sites. The fastest growing is the 50+ age cohort!
    16. 16. 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.
    17. 17. The impact on information … Dramatic effects on people’s relationship to information, media, and electronic content
    18. 18. So, what does this mean for purchasing online content? <ul><li>This is what we are seeing … </li></ul><ul><li>65% of internet users have purchase some type of online content!, and are spending about $10 per month </li></ul>
    19. 19. What do we mean by online content? <ul><li>Online content in this case refers to intangible digital products (i.e., software, articles, music, etc.). This is in contrast to … </li></ul><ul><li>tangible products (e.g., hard-copy books, clothes, computers, etc.) that one can touch or </li></ul><ul><li>tangible services (i.e., hotel reservations, airline ticket, rental cars, etc.) that one engages after purchase. </li></ul>
    20. 20. Quick Methodological Note <ul><li>Rather than just ask if a person had purchased online content or not … </li></ul><ul><li>We asked participants whether or not they had purchase 16 different types of digital content </li></ul>
    21. 21. Breakdown by type of content <ul><li>33% of internet users have paid for digital music online </li></ul><ul><li>33% have paid for software </li></ul><ul><li>21% have paid for apps for their cell phones or tablet computers </li></ul><ul><li>19% have paid for digital games </li></ul><ul><li>18% have paid for digital newspaper, magazine, or journal articles or reports </li></ul><ul><li>16% have paid for videos , movies, or TV shows </li></ul><ul><li>15% have paid for ringtones </li></ul><ul><li>12% have paid for digital photos </li></ul><ul><li>11% have paid for members-only premium content from a website that has other free material on it </li></ul><ul><li>10% have paid for e-book s </li></ul><ul><li>7% have paid for podcasts </li></ul><ul><li>5% have paid for virtual items to use in video or computer games </li></ul><ul><li>5% have paid for “ cheats or codes ” to help them in video games </li></ul><ul><li>5% have paid to access particular websites such as online dating sites or services </li></ul><ul><li>2% have paid for adult content </li></ul>Low of 2% High of 33% Let’s take a quick look at these percentages and content types
    22. 22. Music and Software Lead the Way <ul><li>33% of internet users have paid for digital music online </li></ul><ul><li>33% have paid for software </li></ul><ul><li>21% have paid for apps for their cell phones or tablet computers </li></ul><ul><li>19% have paid for digital games </li></ul><ul><li>18% have paid for digital newspaper, magazine, or journal articles or reports </li></ul><ul><li>16% have paid for videos, movies, or TV shows </li></ul><ul><li>15% have paid for ringtones </li></ul><ul><li>12% have paid for digital photos </li></ul><ul><li>11% have paid for members-only premium content from a website that has other free material on it </li></ul><ul><li>10% have paid for e-books </li></ul><ul><li>7% have paid for podcasts </li></ul><ul><li>5% have paid for tools or materials to use in video or computer games </li></ul><ul><li>5% have paid for “cheats or codes” to help them in video games </li></ul><ul><li>5% have paid to access particular websites such as online dating sites or services </li></ul><ul><li>2% have paid for adult content </li></ul>Entertainment and commerce have always been big drivers of internet usage.
    23. 23. Apps, games, and information are next <ul><li>33% of internet users have paid for digital music online </li></ul><ul><li>33% have paid for software </li></ul><ul><li>21% have paid for apps for their cell phones or tablet computers </li></ul><ul><li>19% have paid for digital games </li></ul><ul><li>18% have paid for digital newspaper, magazine, or journal articles or reports </li></ul><ul><li>16% have paid for videos, movies, or TV shows </li></ul><ul><li>15% have paid for ringtones </li></ul><ul><li>12% have paid for digital photos </li></ul><ul><li>11% have paid for members-only premium content from a website that has other free material on it </li></ul><ul><li>10% have paid for e-books </li></ul><ul><li>7% have paid for podcasts </li></ul><ul><li>5% have paid for tools or materials to use in video or computer games </li></ul><ul><li>5% have paid for “cheats or codes” to help them in video games </li></ul><ul><li>5% have paid to access particular websites such as online dating sites or services </li></ul><ul><li>2% have paid for adult content </li></ul>The increasingly high penetration of smart phones and tablets drivers of apps usages.
    24. 24. Multimedia, Premium content, and books, follow <ul><li>33% of internet users have paid for digital music online </li></ul><ul><li>33% have paid for software </li></ul><ul><li>21% have paid for apps for their cell phones or tablet computers </li></ul><ul><li>19% have paid for digital games </li></ul><ul><li>18% have paid for digital newspaper, magazine, or journal articles or reports </li></ul><ul><li>16% have paid for videos, movies, or TV shows </li></ul><ul><li>15% have paid for ringtones </li></ul><ul><li>12% have paid for digital photos </li></ul><ul><li>11% have paid for members-only premium content from a website that has other free material on it </li></ul><ul><li>10% have paid for e-books </li></ul><ul><li>7% have paid for podcasts </li></ul><ul><li>5% have paid for tools or materials to use in video or computer games </li></ul><ul><li>5% have paid for “cheats or codes” to help them in video games </li></ul><ul><li>5% have paid to access particular websites such as online dating sites or services </li></ul><ul><li>2% have paid for adult content </li></ul>Entertainment and leisure pursuits are motivators across several types of online content.
    25. 25. Podcasts, stuff for games, and access come next <ul><li>33% of internet users have paid for digital music online </li></ul><ul><li>33% have paid for software </li></ul><ul><li>21% have paid for apps for their cell phones or tablet computers </li></ul><ul><li>19% have paid for digital games </li></ul><ul><li>18% have paid for digital newspaper, magazine, or journal articles or reports </li></ul><ul><li>16% have paid for videos, movies, or TV shows </li></ul><ul><li>15% have paid for ringtones </li></ul><ul><li>12% have paid for digital photos </li></ul><ul><li>11% have paid for members-only premium content from a website that has other free material on it </li></ul><ul><li>10% have paid for e-books </li></ul><ul><li>7% have paid for podcasts </li></ul><ul><li>5% have paid for tools or materials to use in video or computer games </li></ul><ul><li>5% have paid for “cheats or codes” to help them in video games </li></ul><ul><li>5% have paid to access particular websites such as online dating sites or services </li></ul><ul><li>2% have paid for adult content </li></ul>Again, entertainment and leisure pursuits.
    26. 26. And, finally, adult content <ul><li>33% of internet users have paid for digital music online </li></ul><ul><li>33% have paid for software </li></ul><ul><li>21% have paid for apps for their cell phones or tablet computers </li></ul><ul><li>19% have paid for digital games </li></ul><ul><li>18% have paid for digital newspaper, magazine, or journal articles or reports </li></ul><ul><li>16% have paid for videos, movies, or TV shows </li></ul><ul><li>15% have paid for ringtones </li></ul><ul><li>12% have paid for digital photos </li></ul><ul><li>11% have paid for members-only premium content from a website that has other free material on it </li></ul><ul><li>10% have paid for e-books </li></ul><ul><li>7% have paid for podcasts </li></ul><ul><li>5% have paid for tools or materials to use in video or computer games </li></ul><ul><li>5% have paid for “cheats or codes” to help them in video games </li></ul><ul><li>5% have paid to access particular websites such as online dating sites or services </li></ul><ul><li>2% have paid for adult content </li></ul>At least some people tell the truth!
    27. 27. Misc. <ul><li>33% of internet users have paid for digital music online </li></ul><ul><li>33% have paid for software </li></ul><ul><li>21% have paid for apps for their cell phones or tablet computers </li></ul><ul><li>19% have paid for digital games </li></ul><ul><li>18% have paid for digital newspaper, magazine, or journal articles or reports </li></ul><ul><li>16% have paid for videos, movies, or TV shows </li></ul><ul><li>15% have paid for ringtones </li></ul><ul><li>12% have paid for digital photos </li></ul><ul><li>11% have paid for members-only premium content from a website that has other free material on it </li></ul><ul><li>10% have paid for e-books </li></ul><ul><li>7% have paid for podcasts </li></ul><ul><li>5% have paid for tools or materials to use in video or computer games </li></ul><ul><li>5% have paid for “cheats or codes” to help them in video games </li></ul><ul><li>5% have paid to access particular websites such as online dating sites or services </li></ul><ul><li>2% have paid for adult content </li></ul><ul><li>6% have paid for some other type of content </li></ul>
    28. 28. Purchasing online content <ul><li>That’s where the 65% of internet users having purchased online content came from. </li></ul>
    29. 29. Number of online content types purchased by internet users <ul><li>75% have purchased multiple types of online content </li></ul>
    30. 30. Much do they spend? <ul><li>Average monthly spend was $47 </li></ul><ul><li>High end users skewed the average </li></ul><ul><li>Most purchasers spend approximately $10 per month </li></ul>
    31. 31. Number of types of payment methods <ul><li>23% of internet users pay for subscription services </li></ul><ul><li>16% pay for downloading an individual file </li></ul><ul><li>8% pay for accessing streaming content </li></ul>
    32. 32. Demographic factors <ul><li>Similar percentages of men and women internet users pay for online content (except software, which significantly more men purchase). </li></ul>
    33. 33. Demographic factors <ul><li>There does not appear to be a racial divide associated with accessing online content. </li></ul>
    34. 34. Demographic factors <ul><li>Internet users between the ages of 30-49 are the most likely to have purchased most kinds of content. </li></ul>
    35. 35. Demographic factors <ul><li>Those with college degrees or some college generally are more likely to purchase online content. </li></ul>
    36. 36. Demographic factors <ul><li>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. </li></ul>
    37. 37. Take Aways <ul><li>Technology and access is changing (has changed) the value , dissemination , and relationship attributes of information </li></ul><ul><li>Percentage of internet consumers similar for products, services, and digital content (all about 65%) </li></ul><ul><li>Also about the same as the households with broadband access (66%) </li></ul>
    38. 38. Related Thoughts <ul><li>Didn’t look at B2B purchases (e.g., search engines purchasing AP newsfeeds and Twitter feeds, etc.) </li></ul><ul><li>Power law distribution (i.e., Netflix for movies, iTunes for music, etc.) </li></ul><ul><li>Line between bits and atoms blurry (i.e., can get content both digitally and hard copy) </li></ul>
    39. 39. Related Thoughts <ul><li>Also, attitude shifts of purchasing online … perhaps based on context, use, and age </li></ul>
    40. 40. Sign that I am officially getting old. I had the option today to pay for or pirate software – I decided to pay.
    41. 41. Follow-on Discussion <ul><li>Happy to chat (either today or contact me) </li></ul><ul><li>Email [email_address] </li></ul><ul><li>LinkedIn http://www.linkedin.com/in/jjansen </li></ul><ul><li>Twitter jimjansen </li></ul><ul><li>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 </li></ul>
    42. 42. <ul><li>Use of the internet in higher-income households </li></ul><ul><li>http://www.pewinternet.org/Reports/2010/Better-off-households.aspx </li></ul><ul><li>Online Product Research </li></ul><ul><li>http://www.pewinternet.org/Reports/2010/Online-Product-Research.aspx </li></ul><ul><li>Generations and their gadgets </li></ul><ul><li>http://www.pewinternet.org/Reports/2011/Generations-and-gadgets.aspx </li></ul><ul><li>Wikipedia, past and present </li></ul><ul><li>http://www.pewinternet.org/Reports/2011/Wikipedia.aspx </li></ul><ul><li>Generations 2010 </li></ul><ul><li>http://www.pewinternet.org/Reports/2010/Generations-2010.aspx </li></ul>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!
    43. 43. Thanks! (welcome questions!) People Actually Do Pay for Online Content Jim Jansen Senior Fellow Pew Internet & American Life Project

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