OPA: Online Paid Content Spending Tops $2B

Led by digital entertainment, online paid content revenue in the U.S. grew by 15 percent last year to top $2 billion, according to the Online Publishers Association.

OPA’s 2005 Online Paid Content U.S. Market Spending Report, conducted in partnership with comScore Networks, measured record revenues and record numbers of consumers paying for content.

In 2005, the average annual spending per consumer crossed the $100 threshold for the first time, while the number of paid content consumers rose to 20.6 million at the end of 2005, indicating revenue growth is coming from increased spending by individuals and more consumers buying content.

“All signs point to very strong and steady growth for paid online content,” said Pam Horan, OPA’s VP marketing and membership. “With only 12 percent of the total Web population purchasing online content, enormous opportunity for growth continues to exist.”

According to the report, eight of the 11 content categories saw revenue increases in 2005. Entertainment/Lifestyles, Games, Personal Growth and Research outpaced other categories with more than 20 percent gains in revenue. Driven largely by purchases of digital music downloads, consumers spent $573.8 million in the Entertainment/Lifestyles category, marking a 38.8 percent increase over 2004. Revenue from Sports, Community-made Directories and General News categories each declined over the year.

“The Entertainment/Lifestyle and Games categories continued to experience the greatest growth in 2005, solidifying the Web as an entertainment destination for US consumers. Digital music led the entertainment category and, with the availability of new devices and video content, we expect this momentum to continue,” Horan said.

While subscriptions remain the dominant online content pricing model, revenue from single payments jumped 61 percent in 2005, largely due to digital music downloads. Single payments now represent 21.6 percent of all online paid content, compared to 15.4 percent in 2004.