How Large is the Subscription Website Market?

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author/source: Miles Galliford

How Large is the Subscription Website Market?

Subscription website publishing is growing faster than any other area of internet business.

To give you an idea of how big it is and what its potential, here are the headline figures from the leading industry analysts.
 
The US market always leads the world in adopting internet technology and the way the web is used. Whatever happens in America on the web, the rest of the world follows, and that’s certainly what is happening in this market.
 
Jupiter Communications are a well-respected company in the US who study media trends. They estimate that in 2003, online subscription revenues were about $2 bn (£1.1 billion). This was up from $1.4 bn (£720 million) in 2002.
 
They expect revenue to continue to grow 20% a year until 2007, at which point the money made from paid online content will be between $5 bn (£2.7 bn) and $6 bn (£3.2 bn).
 
These figures exclude adult content sites, which are a huge market in their own right.
 
If we look a bit further into these figures, the outlook is even more positive. Research by the Online Publishers Association (OPA) shows the speed of the move towards subscription websites.
 
  • By the end of 2006, 80% of online publishers will be charging a subscription for their web content. In 2004, the figure was 54%.
  • Subscriptions are 90% of all online content sales; the remaining 10% are one-off sales, e.g., digital books and music.
  • In the US, 16 million consumers currently pay for online content
  • Paying for online content via subscription is growing 11% faster than the growth in ecommerce, i.e., buying physical goods from online stores such as Amazon.
 
 

We now look at the figures for the UK market.

 
These figures came from market research done by the BBC in March 2004.
 
They predicted that spending on online content would rise from £80 million in 2003 to £400 million by the end of 2007. Interestingly, they believe that online advertising spend will grow from £200 million in 2003 to just £300 million in 2007.
 
They clearly believe that the paid content market is going to overtake the online advertising market over the next few years.
 
No one can dispute the growth and potential of this market.
 
The greatest barrier to this emerging business opportunity was the perception that content on the internet should be free. All the indicators suggest that this perception is quickly fading into the distant past.
 
Now, nothing stands in the way of rapid growth for premium websites with good quality content. Both large and small sites will prosper.
 
 
What I find most exciting is the fact that this market is only just beginning to take off. It has been established long enough to know it is not a fad, but not long enough to enable the large players to dominate it.
 
The genie is out of the bottle and will never go back in.
 
Paid online content is here to stay.
 
The only question is, “Who will be entrepreneurial enough to participate in this opportunity and market growth at this early stage?”
 
I hope that it will be you!