OPA: Paid Content Market Soars

Thanks in large part to an increasing number of people looking for love online, the market for paid online content grew to $361.4 million, a new study by the Online Publishers Association (OPA) shows, more than double what it was a year ago. In the first nine months of the year, U.S. consumers had already spent over a third more on Internet content than the sum spent in all of 2001.

The report, compiled by comScore Networks using its panel of more than 1.5 million Internet users, found that the personals business is the main driver of growth, surpassing business and finance-related content and lifestyle and entertainment content. Personals brought in $87 million in the third quarter, skyrocketing 387 percent from the same period a year ago.

Business and finance content and lifestyle and entertainment offerings grew at a slower, yet impressive pace. Business and finance content grew by 50 percent from last year, taking in $76.1million in the third quarter. The lifestyle and entertainment category nearly doubled from last year, accounting for $63 million.

The top three categories together accounted for 62 percent of all online content revenue in the quarter. Pornography and gambling were not tracked in the report.

The research found that about 11 percent of the 138 million U.S. Internet users now pay for some sort of content on the Web. This represents an 86 percent increase from the same period a year ago.

“As consumer acceptance continues to rise, premium content will play an increasingly important role in the revenue mix for online publishers,” said Michael Zimbalist, the OPA’s executive director.

The subscription model was credited for bringing in the most revenues — more than 90 percent of the revenue in the top three categories came from subscriptions. In personals, subscriptions made up 99 percent of revenues. In business and finance content, they made up 91 percent; in lifestyle and entertainment, they accounted for 92 percent.

The OPA’s membership, which includes the online arms of many traditional media heavyweights, has been shy about diversifying from the ad-revenue model. General news sites took in just $19.7 million in the quarter, while sports content generated $9.6 million.

For business sites, such as WSJ.com and TheStreet.com, subscriptions have been successful. However, general news and culture sites have had mixed results in shifting to the model, with Slate’s early subscription model failing and Salon’s more recent premium program showing lagging growth.

Most OPA member have stuck with an ad-supported model, concentrating instead on improving targeting and effectiveness of ads to lure traditional advertisers to the medium. The approach has shown signs of success: Last month, the OPA said its members, on average, recorded a 47.4 percent revenue increase in the third quarter, thanks to ad dollars.

While shying from subscriptions, some sites have begun charging for certain services, such as archived stories. The OPA tracked an increased use of micro-payments, which it defined as payments for less than $5. Micro-payments brought in $3.1 million in the third quarter, compared to just $279,000 in the period a year earlier. Still, micro-payments represented less than 1 percent of paid content revenue in the period. The study found gaming and research the two areas most likely to receive single-purchase revenue.