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 TheTimesCenter in New York City.

Published in: Business
  • 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.

    Thanks for shariing.
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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:
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  • Good summary of marketplace
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Forrester Research presentation at paidContent 2010

  1. Why Consumers Want to Pay for (Access to) Content James L. McQuivey, Ph.D. Vice President, Principal Analyst Forrester Research paidContent 2010
  2. Is the content free ride coming to an end? <ul><li>There’s trouble in paradise </li></ul><ul><ul><li>The New York Times will charge for content, others will copy and most will fail </li></ul></ul><ul><ul><li>Hulu is flirting with a subscription model </li></ul></ul><ul><ul><li>YouTube is renting movies and holding back its APIs in order to make nice with content owners </li></ul></ul><ul><li>Has this all been one big, Woodstock-like mistake? </li></ul>
  3. Make no mistake: people don't pay for content and never have <ul><li>They pay for access to content </li></ul><ul><li>In the past, that access happened to be gated analog constraints like books, vinyl, theaters, and newsprint </li></ul><ul><li>As a result, when we paid anything, it appeared that we were paying for content, not access </li></ul>
  4. Paying for content circa 1975 <ul><li>In my home… </li></ul><ul><ul><li>We spent an hour each morning with The Salt Lake Tribune newspaper </li></ul></ul><ul><ul><li>Listened to KSL newsradio for an hour every morning </li></ul></ul><ul><ul><li>Watched several hours of primetime TV every night </li></ul></ul><ul><ul><li>Bought at most an album a month </li></ul></ul><ul><ul><li>And saw a movie each month in the theater </li></ul></ul><ul><ul><li>Subscribed to Time, Reader’s Digest, Woman’s Day, and Sports Illustrated </li></ul></ul><ul><ul><li>Donated to KUED, the local PBS affiliate </li></ul></ul><ul><li>For a total monthly content bill of $29.58, all of it directly for content </li></ul>
  5. Paying for content in 2010 <ul><li>For a total monthly content bill of $228.54 </li></ul><ul><li>Of that, $155.98 (68%) is spent on access , not content </li></ul>My family’s monthly content bill today:
  6. Paying for content in 2010 <ul><li>For a total, weighted monthly content bill of $96.84 </li></ul><ul><li>Of which $75.04 (77%) is for access </li></ul>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
  7. Even as direct payments for content go down, thanks to rising access, time with content rises <ul><li>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 </li></ul><ul><li>People now spend 4.5 hours a day watching video content – 30 minutes more a day than they did before the DVR and YouTube </li></ul><ul><li>Those who own eReaders report buying more books than they did before </li></ul>
  8. So why are so many media companies going under if we consume more and pay more for it? <ul><li>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. </li></ul><ul><li>Now the subsidy is changing to a device and access service subsidy. </li></ul><ul><ul><li>Buy a Kindle and Amazon will cover access fees and subsidize the cost of books </li></ul></ul><ul><ul><li>Pay for an iPhone app and get Guardian newspaper content for free </li></ul></ul><ul><li>“ Old” access businesses were cable and satellite, new access businesses include TV everywhere, Xbox 360 Live, Netflix, Kindle, and more </li></ul>
  9. What it means <ul><li>People will continue to pay for (access to) content </li></ul><ul><li>Whoever controls access, commands the highest share of revenue </li></ul><ul><ul><li>Cable companies and telcos </li></ul></ul><ul><ul><li>Monopoly content rights holders </li></ul></ul><ul><ul><li>Device makers </li></ul></ul><ul><li>But… </li></ul><ul><li>Overall revenue will go down, because the advertiser subsidy will get split among many media, old and new </li></ul><ul><li>That means less money to fund content production, ergo competition among content producers is going to be fierce </li></ul>
  10. Thank you <ul><li>James L. McQuivey, Ph.D. </li></ul><ul><li>[email_address] </li></ul><ul><li>Twitter: jmcquivey </li></ul><ul><li> </li></ul>