• by May 12, 2004

Consumers are apparently consuming and paying for online media at a growing rate. They spent nearly $1.6 billion for online content last year-- up 18.8 percent over 2002, according to a report by the Online Publishers Association (OPA).

The 2003 Paid Online Content U.S. Market Spending Report, released Wednesday by the OPA in conjunction with comScore Networks, identified the top three categories for paid content as Personals/Dating, Business/Investments, and Entertainment/Lifestyles. The three categories represented 64 percent of total online content spending in 2003--up 62.6 percent from 2002.

The lovelorn helped make Online Personals/Dating the leading category for paid content last year; the category accounted for 28.8 percent of all paid content spending. Those looking for love online spent $449.5 million on Personals/Dating content in 2003, up 48.8 percent from 2002. However, the Personal Growth category posted the biggest percentage increase--it grew by 104.5 percent from $44.3 million in 2002 to $90.7 million in 2003.

Notably, while the Entertainment/Lifestyles category racked up $214 million in consumer spending last year, it also posted a 5.9 percent decline (consumers spent $227.5 million in the category in 2002).

The OPA report found that 16.4 million U.S. consumers paid for online content in the fourth quarter of 2003--up 2.1 million over the same period in 2002. The proportion of the total U.S. Internet population that paid for content in Q4 2003 grew to 11.1 percent, representing year-over-year growth of 7.7 percent.

In addition to tracking paid content spending by category, the report also analyzed paid content pricing models. While it is no surprise that subscriptions continue to be the dominant model versus single-purchase sales, monthly subscriptions appear to have overtaken annual subscriptions as the dominant subscription term. In 2003, monthly subscriptions accounted for 49.6 percent of total subscription revenue (compared to 44.1 percent in 2002), while annual subscriptions accounted for 41.6 percent (compared to 47.0 percent in 2002).

The findings in the OPA's Paid Online Content U.S. Market Spending Report are based on actual observed purchases of content. ComScore calculated the results of the study by passively and electronically monitoring the actual purchase and usage transactions that took place during the analysis period within its representative panel of more than 1 million U.S. online consumers.