Lies, Damn Lies, and Statistics

Mark Twain popularized in the U.S. Benjamin Disraeli’s statement, “There are three kinds of lies: lies, damn lies, and statistics.” That sardonic journalist, author, and speaker recognized the persuasive power of authoritatively made numeric presentations to a largely innumerate public. Ninety-two years after Twain’s death, the Online Publishers Association issued a statistical report that buoys advocates of charging for online content.

Entitled “Online Paid Content: U.S. Market Spending Report” and prepared by survey firm comScore Networks, the report states U.S. consumers spent $675 million for online content in 2001, a 92 percent increase over the previous calendar year.

Advocates of charging for online content point to this report’s statistics as a signal consumer are more willing to pay. The statistics have induced journalists into affirming a trend is underway. “A Shift Registers in Willingness to Pay for Internet Content,” headlines The New York Times. “Americans are warming up to paying for content on the Web,” adds CNET’s News.Com.

Wow! Consumers are paying for online content. What is it that made them suddenly more willing to do this?

To answer that question, I must quote another famous American, William Jefferson Clinton: “It depends upon what the meaning of the word ‘is’ is.” That presidential statement to a grand jury is now enshrined in Bartlett’s Familiar Quotations, which is edited by Justin Kaplan, Mark Twain’s biographer.

Clinton’s quote is an exercise in semantics. So, unfortunately, is the OPA’s report.

OPA is “an industry trade organization dedicated to representing high-quality online publishers before the advertising community, the press, the government, and the public,” whose membership includes Bankrate.com, CBS MarketWatch, CNET Networks, CondéNet, Cox Enterprises, ESPN.com, Forbes.com, Knight Ridder Digital, Le Monde Interactif, MSNBC.com, New York Times Digital, Salon Media Group, Scripps Network, Slate, SPACE.com, Tribune Interactive, USATODAY.com, Wall Street Journal Online, Washingtonpost.com, Newsweek Interactive, and weather.com.

Those companies are publishers and broadcasters of what most people traditionally term content: news and features, or TV programming. OPA members’ parent companies would likely define content that way.

How does the OPA report define paid content? “We restrict our definition of ‘paid content’ to digital intellectual property purchased through a Web browser by an individual.”

Paid “digital intellectual property.” What does that mean exactly?

To OPA, it means not only what its membership’s parent companies would traditionally define as content but also business-to-business (B2B) online research, such as Internet industry reports purchased from eMarketer.com; wiring reports from the Institute of Electrical and Electronics Engineers’ site; day trader investment advice (e.g., ChangeWave.com); and downloadable clip art (e.g., ArtToday). All this B2B material counts toward consumer paid content totals.

Also included is pure research, such as Merriam-Webster OnLine, eLibrary.com, Brittanica.com, and USSEARCH, a category including not only dictionaries and encyclopedias but also public information and personal background searches. To OPA, content also means online subscriptions to services. OPA counts “Community Directories” such as Ancestry.com and Classmates.com. The services OPA counts as content include online consumer credit help such as ConsumerInfo.com and CreditExpert, plus “Personal Growth” services, such as eDiets and WeightWatchers.com.

OPA includes online greeting cards services (AmericanGreeting.com, Blue Mountain Arts, and Hallmark.com) as content. Oh, gift certificates purchased from those sites are content, too.

OPA says “Entertainment/Lifestyle” streaming media from Real.com and pressplay and even pinups from Playboy.com are content. The study further counts online game site subscriptions, such as the Alien Adoption Agency, Case’s Ladder, and The Well Dressed SIM.

How far does OPA’s definition of content go? Toss in personal ads and dating site subscriptions, such as Match.com, Singles.com, and kiss.com.

“Digital intellectual property”? I can understand Brittanica.com’s content being defined that way. But a personal ad labeled “Sexy Guy Seeks Comfy Girl” on kiss.com? A post of “Uma’s Unmentionables” on The Well Dressed SIM? Gift certificates on Hallmark.com?

Do I detect OPA inflating the definition of paid online content? Why not add online revenue from Ticketmaster and other traditional services?

At least OPA decided to “exclude software downloads, pornographic sites, gambling sites, and certain other classes of sites which, in our view, skirted the bounds of decency or the law.” Interesting. You might think software would fit the description of digital intellectual property. I wonder what bounds of decency or law thousands of companies that offer downloadable software are skirting? I can see excluding gambling subscriptions and winnings as a form of content. Incongruous that OPA would exclude pornographic downloads, perhaps the most widespread form of online paid content.

Does OPA’s definition of online paid content make sense when you look at its membership? No, but it sure fabricates a great amount of money OPA can claim is being paid for online content.

Let’s look again at the $675 million the report says was spent on online content in 2001. Here’s the breakdown:

• Business Content — $214.3 million
• Entertainment/Lifestyle — $112.0 million
• Personals/Dating — $72.0 million
• Research — $57.9 million
• General News — $51.8 million
• Games — $46.5 million
• Community Directories — $46.1 million
• Credit Help — $32.4 million
• Personal Growth — $24.7 million
• Sports — $10.0 million
• Greeting Cards — $6.8 million

Cut categories that actually provide paid services (Personals/Dating, Community Directories, Personal Growth, and Greeting Cards) and $675 million drops to $523.4 million. Then, eliminate downloadable songs and pinups. The figure arguably falls to $411.4 million. Remove B2B content from the Business Content and Research portions of this consumer spending report, and the total spent online for content, as traditionally defined, was probably only about $139.2 million last year.

Indeed, the only OPA members listed in the report’s ranking of the top 25 paid online content sites were The Wall Street Journal Online and ESPN.com.

Did American consumers spend $675 million for online content last year? Depends how you define content. Most people wouldn’t define it the way OPA does. But OPA’s definition sure makes for a spectacle of a press release.

“If a spectacle is going to be particularly imposing, I prefer to see it through somebody else’s eyes, because that man will always exaggerate. Then, I can exaggerate his exaggeration, and my account of the thing will be the most impressive,” Mark Twain also said.

It seems the wishful revenue hype of the Internet bubble era isn’t entirely over. It’s doubly ironic when you consider traditional media outlets belonging to OPA’s membership are headlining the business stories about inflated revenues.

OPA states, “This first report and its ongoing installments will enliven the debate about the role of paid content in online publishing.” It did for me. There is a role for reporting the amount of paid content in online publishing, but there’s no role for hype.