Pay for Content Model Not Likely to Succeed While Most of the Web is 'Free'
In its latest issue, the Canadian Inter@ctive Reid Report asked consumers about their willingness to pay for online content. Specifically consumers were asked how likely they would be to pay a monthly or annual fee to access their favorite news and information site.
The results are decidedly unsupportive, said Marcie Sayiner, Senior Manager of Research for Ipsos-Reid in Vancouver. In fact, only 5% of Canadian Internet Users are willing to pay a monthly or annual fee to access a news and information site. Fifteen percent are somewhat unlikely and the strong majority (79%) are very unlikely.
Of those willing to pay for online content, the gender split is almost equal. Those aged 35-54 years of age are slightly more likely than those aged 18-34, at 5% and 4% respectively, but less likely than those aged 55 years and older, at 6%. Regionally, Canadians with Internet access residing in Ontario or BC are more likely to pay for online content over any other region, at 7% and 6% respectively.
"While a 'Pay for Content' model may be something achievable long-term, it simply is not a viable option while so much content remains free on the Web" Sayiner said. "For any one site to succeed with this model, the large majority of sites must agree to support it. Alternately, a site which chooses to charge for its content needs to offer an extremely enticing package that competitors simply cannot offer for free."
The results show that a donation versus a payment method appears to be more accepted among users. That is, when asked to donate to a favorite site to keep it running, 17% of Canadian Internet users say they are either very (3%) or somewhat likely (14%) to make a cash donation. The majority of users (81%) say they are somewhat unlikely (21%) or very unlikely (60%) to make a cash donation.
The key to success appears to lie in premium content, but sites still need to proceed with caution. Ten percent of Canadian Internet users asked of their willingness to pay for premium content, such as special articles, streaming audio, broadcasts or streaming video broadcasts are somewhat or very likely to pay for this premium content.
However, 89% remain somewhat or very unlikely. If past behaviour is an indicator, it should be noted that only 8% of Canadian Internet Users have paid for online content in the past.
"While there certainly have been some success stories using this model, namely the Wall Street Journal Online's ability to charge its users for content, the pay for content model is generally one that will not take-off without some struggle. Given the wealth of free information available, being the first to market such a model is not necessarily a benefit, as users can then refuse to pay for such content and utilize other sites," said Sayiner.
Methodology
The "Canadian Inter@ctive Reid Report" is the largest, most comprehensive and authoritative source of its kind about quarterly Internet trends in Canada. The results are based on two separate data collection instruments. In the first, 1,000 web users from Ipsos-Reid's Canadian Internet Panel are surveyed online. Panelists are chosen through random telephone surveys conducted on an ongoing basis across Canada. Results are complemented by a further 1,000 interviews via telephone with Canadian adults in order to verify results of the panel, and track issues among non-Internet users. The most recent quarterly results were collected between June 20th and June 30th, 2001.
These data are statistically weighted to reflect the population proportions of regular online users by online expertise and regional distribution. Our panelists represent approximately 12.6 million Canadian adult Internet users who are online for one hour a week or more (there are a total of 15.6 million adults who have Internet access).
With a national sample of 1,000 (for each component), one can say with 95% certainty that the overall results are within a maximum of 1773.1 percentage points of what they would have been had the entire population of Canada's regular online users been surveyed. The margin of error will be larger for sub-groupings of the survey population.
About Ipsos-Reid
Established in 1979, Ipsos-Reid is Canada's leading market research and public opinion company. Its is best known for the Angus Reid Express Poll, the most widely quoted source of public opinion in the country. Founded by Dr. Angus Reid, Ipsos-Reid has conducted extensive market and social research in 80 countries and in 40 languages, and serves clients around the world through more than 300-professionals and 1,000 data collection staff in 12 offices. The company is a member of the Paris-based Ipsos Group, ranked among the top ten research companies in the world.
For more information, contact:
Steve Mossop
Senior Vice President
Ipsos Reid
778.373.5001
[email protected]
