Consumer spending on online content such as music, dating sites and business and investment information grew 14 percent last year to $1.8 billion, an organization of online publishers reported Thursday.
The Online Publishers Association, working with comScore Networks, a group that studies consumer behavior online, said in its report that the biggest gain came in spending on entertainment, which jumped 90 percent over a year ago to $413.5 million, driven mainly by greater purchases of music.
Spending on dating sites remained the top category, however, growing 4.4 percent in 2004 to $469.5 million last year. Spending on business and investment fell 6.3 percent to $312.9 million, the group reported.
Other big gainers in online spending were games, up 21.8 percent to $88.8 million, and sports, up 38 percent to $52.8 million.
"One of the trends we're tracking is how the Web is migrating from being an information medium to an entertainment medium," Michael Zimbalist, president of the Online Publishers Association, said. "The kinds of genres that are really taking off in the paid space are entertainment-related, such as music and video, interactive games and fantasy sports games."
Zimbalist attributed the shift to the growing use of high-speed Internet connections, which allow for easier access to music, audio and video files. Also, the first generation of Americans who grew up with the Internet are now "coming into their own as consumers," he said.
'You get what you pay for'
The growth of paid content online is also an important trend for advertisers. Brenda Goodman, who plans and buys online advertising for Zenith Optimedia, a unit of the French advertising company Publicis Groupe SA, said advertisers see paid content as a sign of a "higher interest level" from consumers, and thus a more effective place for advertising.
Even though the Internet started out as a free medium, "it's a natural evolution in a society where we believe that you get what you pay for," Goodman said. "More people are going to be willing to pay for better content."
The study from the Online Publishers Association excludes several significant areas of spending on online content: pornography; spending by businesses on industry newsletters and other publications; and fees from the rapidly growing online games known as massively multiplayer online role-playing games, or MMORPGs, such as EverQuest.
Zimbalist said 2004 was the third full year for which the Online Publishers Association has studied consumer behavior in buying content online.