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Forrester Research presentation at paidContent 2010
 

Forrester Research presentation at paidContent 2010

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James McQuivey, VP & Principal Analyst at Forrester Research, "Why Consumers Want to Pay for Access to Content," presentation at ContentNext Media's paidContent 2010 Conference, February 19, 2010 at ...

James McQuivey, VP & Principal Analyst at Forrester Research, "Why Consumers Want to Pay for Access to Content," presentation at ContentNext Media's paidContent 2010 Conference, February 19, 2010 at TheTimesCenter in New York City.

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  • good
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  • Thought provoking. The observation appears to be that Access replaces Content as King.
    However, this is equivalent to paying to ride on a bus regardless of the direction. Content does determine which accesses we would pay.
    The other observation that whoever controls access controls the distribution of payment in a value chain. I suspect this is only true where there are numerous content providers, as opposed to an oligopoly.

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  • Very interesting. It underscores that willingness to pay is connected to much more than the content itself.

    Here is a blog post I have written about the same topic, in which I offer five uniqueness attributes for willingness to pay for digital content:

    http://www.betatales.com/2010/01/17/five-ways-to-build-unique-value-for-paid-digital-content/
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  • Good summary of marketplace
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    Forrester Research presentation at paidContent 2010 Forrester Research presentation at paidContent 2010 Presentation Transcript

    • Why Consumers Want to Pay for (Access to) Content James L. McQuivey, Ph.D. Vice President, Principal Analyst Forrester Research paidContent 2010
    • Is the content free ride coming to an end?
      • There’s trouble in paradise
        • The New York Times will charge for content, others will copy and most will fail
        • Hulu is flirting with a subscription model
        • YouTube is renting movies and holding back its APIs in order to make nice with content owners
      • Has this all been one big, Woodstock-like mistake?
    • Make no mistake: people don't pay for content and never have
      • They pay for access to content
      • In the past, that access happened to be gated analog constraints like books, vinyl, theaters, and newsprint
      • As a result, when we paid anything, it appeared that we were paying for content, not access
    • Paying for content circa 1975
      • In my home…
        • We spent an hour each morning with The Salt Lake Tribune newspaper
        • Listened to KSL newsradio for an hour every morning
        • Watched several hours of primetime TV every night
        • Bought at most an album a month
        • And saw a movie each month in the theater
        • Subscribed to Time, Reader’s Digest, Woman’s Day, and Sports Illustrated
        • Donated to KUED, the local PBS affiliate
      • For a total monthly content bill of $29.58, all of it directly for content
    • Paying for content in 2010
      • For a total monthly content bill of $228.54
      • Of that, $155.98 (68%) is spent on access , not content
      My family’s monthly content bill today:
    • Paying for content in 2010
      • For a total, weighted monthly content bill of $96.84
      • Of which $75.04 (77%) is for access
      A look at the average American in a typical month: $5.58 $13.75 $11.04 $16.00 $4.99 $12.00 $4.99 $56.00 $26.00 $3.37 $30.00 $9.99 $6.99 Monthly bill Sources: Multiple Forrester Consumer Technographics Surveys from 2009, validated by external sources; some monthly bill estimates calculated from current costs of services available in the market
    • Even as direct payments for content go down, thanks to rising access, time with content rises
      • Thanks to the PC, people listen to 3.3 hours of music a week more than they could have before; MP3 players and phones add another 2.6 hours a week
      • People now spend 4.5 hours a day watching video content – 30 minutes more a day than they did before the DVR and YouTube
      • Those who own eReaders report buying more books than they did before
    • So why are so many media companies going under if we consume more and pay more for it?
      • Because media have always been a subsidized business: newspapers were paid for by classifieds, TV shows were paid for by Alka-seltzer, and CDs were subsidized by WalMart to drive store traffic.
      • Now the subsidy is changing to a device and access service subsidy.
        • Buy a Kindle and Amazon will cover access fees and subsidize the cost of books
        • Pay for an iPhone app and get Guardian newspaper content for free
      • “ Old” access businesses were cable and satellite, new access businesses include TV everywhere, Xbox 360 Live, Netflix, Kindle, and more
    • What it means
      • People will continue to pay for (access to) content
      • Whoever controls access, commands the highest share of revenue
        • Cable companies and telcos
        • Monopoly content rights holders
        • Device makers
      • But…
      • Overall revenue will go down, because the advertiser subsidy will get split among many media, old and new
      • That means less money to fund content production, ergo competition among content producers is going to be fierce
    • Thank you
      • James L. McQuivey, Ph.D.
      • [email_address]
      • Twitter: jmcquivey
      • www.forrester.com