Consumers Want Online Content for Free

It’s one of the oldest debates on the Internet: Should sites charge for content. It began with information content and now it applies to audio, video, software and more. And consumers say they expect to get it free, according to a survey by the Consumer Electronic Association (CEA).

A recent survey of Internet users by the CEA found that consumers believe they should get content online for free, and that 89 percent of Internet users download multimedia content and information. According to CEA’s “Digital Download” survey, a good portion of respondents oppose any kind of Internet government fees or restrictions. Ninety-two percent oppose paying taxes for accessing the Internet, another 75 percent oppose paying sales tax for items purchased online and 61 percent oppose laws that prevent the usage of file-sharing software such as Napster.

“This survey underscores that we are on a collision course between intellectual property owners who want consumers to pay by the bit for access and consumers who want free access, but will pay for better or more complete content,” said Gary Shapiro, president and CEO of CEA. “Public policy debates must shift to reflect the paradigm of the new economy as technology creates new ways for more consumers to access information and entertainment. We must protect the ability of technologies to evolve, especially those that allow personal, noncommercial recording.”

According to the CEA survey, most online consumers have downloaded various types of multimedia content and information in the past year, and many who have not downloaded online content expect to do so within one or two years. Pictures are the most commonly downloaded content (63 percent have downloaded them in the past year, and 53 percent plan to do so in one to two years), followed by games (50 percent in past year) and computer software (48 percent in past year). At the end of the scale are electronic books, downloaded by only 12 percent in the past year.

Half of Internet users oppose fees for downloading content online, and in the cases of fees for downloading information, pictures, audio files and games, consumer opposition rises as high as 77 percent. The survey also points out that while Internet users want their online content to be free, free content does not seem to be deeply diminishing their purchasing habits. In fact, many times, free online content spurs future purchases of music, videos, books, games and software. Online households noted that being able to download items from the Internet onto their hard drives led them to increase their purchases of similar items online, through the mail or at a store.

The survey also found that if consumers can sample content on the Internet for free, most say that they are even more likely to purchase that content. In the case of online music, 33 percent say they will buy more music if they can sample it online, justifying the acts of numerous recording artists who preview their songs on the Internet.

“Almost every technology innovation from the VCR to the CD has enriched the same copyright owners that initially attacked it. Consumers want free and public access to content online, and those same consumers are more likely to purchase similar content once they experience it online,” Shapiro said. “The challenge for our industry is to develop new business models, products, technologies, and services which provide a balance between the legitimate interest of content owners and the desires expressed by consumers in this survey.”

The Recording Industry Association of America in part blames the availability of music content on the Internet for a slow market for recorded music in the second half of 2000. Music manufacturers saw their bottom line drop nearly 7 percent in unit shipments, while the dollar value of those units declined 1.8 percent from $14.6 billion in 1999 to $14.3 billion in 2000.

According to RIAA, the decrease is largely attributed to a dramatic reduction in shipments of CD singles which fell 38.8 percent in 2000. This one-year decrease in shipments of CD singles is preceded by 200 percent growth between 1995 and 1997 and flat growth in 1998 and 1999. The singles market plummeted, RIAA said, because of changes in consumer purchasing habits principally brought on by new options provided by the Internet.

Consumers Opposition/Support Fees for Downloading Online Content
Oppose Neutral Support No
Information* 77% 11% 4% 9%
Pictures 66% 17% 7% 10%
Sound files** 60% 17% 7% 15%
Audio files*** 51% 20% 17% 13%
Games 50% 24% 16% 10%
Video clips or movies 48% 25% 16% 12%
Computer Software 43% 25% 22% 10%
Electronic Books 40% 25% 21% 14%
*driving directions, news stories, financial reports, health articles, etc.
** such as .wav files
*** such as mp3 files
Source: CEA

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