The Market Opportunity Today
A quiet revolution is taking place on the internet.
Subscription website publishing, once the preserve of the national newspapers, has started to boom.
And the part of the sector that is growing the fastest are the small specialist websites that have between 1,000 and 5,000 subscribers. These sites tend to stay below the radar when analysts compile their figures. However, if you could aggregate all the fees from the smaller, low-volume subscription websites, I predict that their total revenues would be as large or larger than the revenues from the top-selling sites.
Anyone looking to establish a business on the web should take note of the following analyst projections ... and these projections probably exclude most of the revenues out there because the sites are too small to measure.
UK Online Subscription Revenues
Online subscription revenues are expected to be the same as online advertising revenues within a few years.
A recent BBC report called the Online Market Review written by the respected Spectrum Strategy Consultancy came to the following conclusions:
- Online subscription revenues will grow from around £80 million in 2003 to £400m by the end of 2007.
- During the same period, online advertising revenues are expected to grow from £200m in 2003 to £400m in 2007.
- By 2007, internet users will spend 60% more time online than they do today. The casualties will be reading newspapers, magazines and books, and watching TV.
A fundamental change in the way we spend our time and consume information is underway. Paid-for content distributed over the web is going to be one of the markets that benefits most from this evolution.
US Online Subscription Revenues
If the change in the UK is significant, it is nothing compared with the growth in the US paid-for online content market.
In 2005, the paid content market was estimated to be worth $2 billion. By 2007, this is expected to grow to a staggering $5.7 billion (Sources: Comscore Research and Jupiter, 2005).
The figures above exclude adult content and gambling sites, which would make the revenues significantly higher.
In the US in 2005, newspaper readership fell by three percent, its largest ever single-year decline. In the same year, magazine newsstand sales fell to their lowest level in 30 years. Yet, the time spent reading and researching on the internet continued to increase.
Where would you invest your money?
Boom Times Ahead
After a faltering start at the end of the nineties, the paid content market is now building on a very solid foundation. There are thousands of profitable sites around the world, ranging from FT.com and WSJ.com to small niche sites with several hundred members.
The perception that all content on the web should be free is quickly changing. Like with paid TV and specialist publications, people accept that if they want quality content, they need to pay for it.
Likewise, content providers realise the huge benefits of delivering their information over the internet. Cheap delivery, service automation, searchable archives, online communities, real-time feedback and reporting are just a few of the benefits that they can see are achievable.
In marketing speak, the online paid content market is reaching its ‘tipping point’. This is the point of no return! The benefits to both users and providers are clear and all the obstacles to market growth are out of the way.
The tipping point is the most exciting period in any industry’s lifecycle. Markets, companies and revenues can be created overnight.
This is your chance to be involved at the start.