Consumers Pay Up For Online Content?

from the not-really dept

As everyone keeps trying to figure out ways to make money off of online content, they're probably going to take the wrong message out of this headline saying that consumers are willing to spend on online content. As the article points out, a large portion of the money went to online dating sites. Online dating sites aren't about people paying for "content", it's about them paying for a "service". People are much more willing to pay for a service than for content. The other finding in the study was that the amount of money spent on content in the fourth quarter last year was less than the third quarter. They suggest this is because people used their discretionary budgets for holiday shopping instead. This suggests that online content, if anything, is a highly elastic good. People have a certain amount of money they're willing to spend on it, and if everyone starts trying to charge for content, most people will limit the amount of content they're going to purchase. The strict "pay for content" model is a very dicey business proposition. Companies are much better off figuring out how to offer a service, instead.

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