The Online Publishers Association is promoting a study [PDF] that says online content sales in the U.S. totaled $1.3 billion in 2002, an increase of 95% over 2001.
However, a closer examination of the data makes this billion-dollar figure suspicious. Here are some of my observations from their top 25, which I have classified into Content, Service, Entertainment, and Database:
- The single biggest category is more properly described as “services”. It includes Yahoo, MSN, and personals.
- Yahoo is seeing results from its efforts to increase revenues from fees, and MSN is falling behind.
- Financial information is the biggest contributor to true content sale, with sales of $292 million.
- The OPA describes financial content as “maturing”, with a growth rate of 18%.
- Sales of “General News” rose from $52 million to $70 million. No “General News” site was in the top 25.
- Consumer Reports and Encyclopedia Britannica are the two true consumer content brands on the list.
- Consumer Reports has fallen from #5 to #11.
- The IEEE.org site sells conferences, so it’s not clear how much of their revenue is really for content.
- Pressplay, the much-maligned music service, is on the list at #22.
- ESPN’s revenues are apparently mostly from fantasy sports games.
- It’s not clear why Playboy is on the list, since “pornography” is excluded from the survey.
Here are the top 25 content sites, according to the OPA:
| Content | Service | Entertainment | Database | ||
| 1 | yahoo.com | up from #4 | |||
| 2 | match.com | personals | |||
| 3 | real.com | down from #1 | |||
| 4 | classmates.com | friend finder | |||
| 5 | wsj.com | down from #2 | |||
| 6 | weightwatchers.com | x | |||
| 7 | ancestry.com | x | |||
| 8 | consumerinfo.com | credit reports | |||
| 9 | matchmaker.com | personals | |||
| 10 | 1800ussearch.com | people tracker | |||
| 11 | consumerreports.org | down from #5 | |||
| 12 | espn.go.com | fantasy games | |||
| 13 | carfax.com | vehicle history | |||
| 14 | thestreet.com | no change | |||
| 15 | bluemountain.com | greeting cards | |||
| 16 | playboy.com | OPA says it excludes “pornography” | |||
| 17 | kiss.com | personals | |||
| 18 | msn.com | down from #15 | |||
| 19 | egreetings.com | greeting cards | |||
| 20 | ieee.org | Does this include conference sales from web site? | |||
| 21 | arttoday.com | ugly clipart | |||
| 22 | pressplay.com | Music service | |||
| 23 | britannica.com | x | |||
| 24 | astrology.com | x | |||
| 25 | smartmoney.com | no change |
What exactly is your objection? All of the insights you cite are clearly disclosed in the report. There was no deception as to what types of “content” the study examined.
You’re quibbling over the semmantics of the word “content.” Because data is in a database, it’s not content? What about searching the archives of a news site (database), that’s not content? Car histories are not content because they’re stored in a database? Horoscopes don’t count because they’re “entertainment”? For that matter, entertainment isn’t content? In the TV industry, they refer to programming as “content.” Is the NYT crossword puzzle not content because, like fantasy sports, it is a “game”?
If you’re objection is that you believe “content” refers simply to the written word (e.g., news stories), I’d suggest that’s limited thinking in the multimedia world of the Internet. Likewise, discounting “content” written by a community of readers (e.g., IMBD, Classmates or personals) as opposed to an editorial staff is, I would maintain, a traditional media view, not one in step with the multimedia reality of new media.
More to the point, all the definitions are clear in the report (which I had a hand in scoping in its early incarnation, many months ago, hence my interest), so I don’t see what the problem is. If you want to count “content” only as news and business writings, the report clearly breaks out the data that way, so you can help yourself. The OPA felt there was more value in looking at all what are the various types of “media stuff” (if you prefer) that users are paying publishers for rather than narrowing the definition to simply one aspect of “content.”
For the record, I am no longer involved in this ongoing research, so these views are my own; I’m not speaking on the OPA’s behalf.
It’s one thing to say that online content sales are $1.3 billion and doubling annually and quite another to say they’re $500 million and growing at 20% a year — and that the WSJ is a third of the market. The headline is showing up everywhere and gives a false impression of the size and health of the market.
I scanned the report again, and I agree that it’s clear about what’s included, but I couldn’t find a definition of content. Lumping all that stuff together as “content” is meaningless.
I’ve got no problem with user-created content. IMDB, Slashdot, and Yahoo Groups are content. Personals are a service and are no more content than email is. You can read the personals on match.com for free. What you pay for is the ability to put your name in the database and to contact the posters.
Music could arguably be considered content, but it’s problematic. It’s not even the same medium as the rest of this stuff and is consumed in an entirely different fashion. You might as well include online software sales.
A crossword is a creative product, a fantasy sports game is a service.
Upon further consideration, I would include horoscopes in content.
Sorry to be cross-posting here, but here are the comments I added to our same debate on the MarketingFix thread:
Well, the argument is over what constitutes a "publisher" and "content" in an online context. Which are the companies that "cannot be described as 'publishers'"? The OPA's own membership includes Cox TV, About.com, Weather.com and ESPN, not traditional print publishers, but they are all directly part of the OPA's constituency.
More to the point, the types of firms I suppose you're classifying as not publishers — e.g., Real Networks, Ancestry.com, Weightwatchers.com, Yahoo, Match.com — all derive revenue from advertising, in addition to subscriptions — just like NYTimes.com and WSJ, so in what sense are they not publishers, at least from the point of view of their revenue models? I suppose you don't object to the IAB counting ad revenue from those sites (e.g., Real Networks) in its calculation of how much money advertisers are spending online, so when the OPA tries to count how much money consumers are spending on subscriptions, why shouldn't we count that revenue from those same sites?
As I say, I think people are getting hung up on semantics (I say people, b/c you're not the only one who's raised this argument in the past). We're used to thinking of "publisher" in the print context, and "content" similarly (tho, as I say, TV programmers use the same term in their industry). But online, in my mind anyway, "publisher" refers simply to any site that aims to derive revenue by monetizing an audience attracted to its content (as opposed to from selling merchandise or the like), typically in the form foremost of advertising and paid content. This is the same way print publishers derive their revenue, and it's the same way WSJ.com and NYTimes.com derive their revenue (and, for that matter, cable TV as well).
Perhaps if the OPA used the terms "media properties" and "media material" this would not be an issue. Again, I think you're getting hung up on the semantics of "publishers" and "content," which misses the point. The point is, in traditional media, print and cable TV properties typically get about 75% of their revenue from ads and 25% from direct consumer fees for the "content," and that, after years of rejecting the paid content model, more and more media properties are adopting the same strategies online. The "take away" of this research, in my mind, is that increasingly online media companies are overcoming their prior reluctance to charge their audiences directly, and in the long run, "publishers" that continue to resist charging for content are leaving money on the table and are going to be at a competitive disadvantage, as consumers have clearly demonstrated their increasingly willingness to pay for content.
Also, with regard to your repeated claims that the WSJ constitutes half of all paid revenue in the "business content" category, that is an inaccurate exaggeration. I am not privy to the exact breakout of that category, but just a quick analysis of public info demonstrates this cannot be true. The OPA says the business content category amounted to $292 million in 2002. Assuming $70 per year for a subscription to WSJ.com, that would mean WSJ has some 2 million subscribers, when, according to their public statements, they have fewer than 700,000 subscribers.