Jupiter Media Metrix report presents bleak picture for paid online content revenues

US based Jupiter Media Metrix (JMM) has predicted that revenues from paid online content will grow to only $5.8 billion by 2006, up from $1.4 billion in 2002.

JMM that claims to be the global leader in Internet and new technology analysis unveiled the report at the ninth annual Jupiter Media Forum last week. Revenues for general content will reach $2.3 billion in 2006 up from $700 million in 2001, while revenues from online games and digital music will be $1.8 billion and $1.7 billion by 2006, respectively, the report says. Last year, the figures stood at $260 million and $30 million, respectively.

Although Jupiter forecasts that general content revenues will hit $2.3 billion by 2006, the market will stay relatively fragmented. Within the general content category, the highest revenue generating genres in 2006 will be audio/video entertainment ($600 million), adult entertainment ($400 million) and financial and business news content ($350 million).

Genres expected to generate the least revenue in 2006 include: consumer/shopping aids ($85 million), content for children ($95 million) and sports content ($95 million). In addition, Jupiter revealed the findings of a March 2002 Consumer Survey, which had 70 per cent of the respondents saying that they would not pay for content online.

The figures indicate that the mass market still largely shuns anything resembling a subscription online. However, in the near term, media companies will create subscription services through packaging, exclusivity and added interactive features, the study notes. Over time, the companies must use the gradual US broadband transition to reset industry ground rules and recondition consumers' expectations.

42 per cent of online adults expect over time that people will have to pay for content on the Internet. Consumers' attitudes toward paying for content have, if anything, worsened since August 2000, when 45 per cent of respondents answered the question in the same way, the study says.

The silver lining is that Jupiter analysts believe that major media properties are in a better position than they were four or five years ago, as they no longer face well-financed start-ups giving away quality programming in an effort to lure new users.

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