Over half a billion people worldwide now have Internet access, according to new research from Nielsen-Netratings. The research company’s latest study indicates that 580 million people have Net access, compared to 563 million in the third quarter of 2002. According to ITU the worldwide Internet population of 2002 is a bit higher at 655 million. Projected figures for Internet population for the year 2004 are 709.1 million (eMarketer) and 945 million (Computer Industry Almanac).
The 11 major Internet markets measured by Nielsen-Netratings experienced a four percent average increase in online population between the fourth quarter of 2001 and the fourth quarter of 2002. The US posted the greatest increase in the number of adults online over the same period with nearly 10 million people over the age of 16 gaining Net access. The US now accounts for 29 percent of the global Internet access universe, followed by Europe with 23 percent, Asia-Pacific with 13 percent, and Latin America with two percent.
In 2001, the last full year where numbers are available, the Department of Commerce presented e-commerce sales versus total U.S retail sales. It revealed that the $3.16 trillion retail industry saw a total of $37.7 billion in sales take place online -- comprising 1.2 percent of the total. This year e-commerce is tracking about the same. Through the third quarter, the last full quarter where numbers are available, total retail sales were $856 billion versus $11 billion in ecommerce, about a 1.3 percent share.
As stated earlier, there is a growing tendency amongst Internet users to pay for valuable content online. The following facts corroborate the trend towards value added services and the high importance users give to effective use of their time. According to a research conducted by the Online Publishers Association consumer spending on online content has seen a steady increase every quarter since 2001. The first quarter of 2001 saw a spending of $118 million as compared to $228 million in the fourth quarter of 2001. The figures for the first, second and third quarter for 2002 are $296 million, $318 million, and $361 million respectively.
The total market for paid online content in the U.S. grew to $361.4 million for the third quarter, a 14 percent gain over the previous quarter. The market in the year 2002 is estimated to be around $ 1.3 billion. Over 10% of Internet users have paid for online content and this ratio is growing.
According to a study released by the Online Publishers Association (OPA), conducted by comScore Networks, US consumers spent $675 million on online content in 2001. This study concluded that consumers spent most money on Business Content, Entertainment, Personals and online dating. Other categories that saw a rise in spending are research, general news, games, community directories, credit and personal help, sports, and greeting cards.
A recent report on the US Market on Spending published by the Online Publishers Association and comScore indicates a change in the spending in terms of different categories. The Personals/Dating category surpassed Business/Investing content to become the leading paid content category in Quarter 3 of 2002, with $87 million in revenues, a 387% gain over the same quarter in 2001. Given below are the most popular paid content categories as per this report.
Business Content – Includes business news (e.g., WSJ.com), business research (e.g., eMarketer.com), investment advice (e.g., changewave.com) and digital content used for business purposes (e.g., ArtToday.com).
Community Directories – Includes sites whose content is created in large part through the efforts of other site visitors, for example, Ancestry.com, IMDB.com and Classmates.com.
Credit Help – Includes sites offering access to consumer credit history records and related content, for example ConsumerInfo.com and CreditExpert.com.Entertainment/Lifestyles – Includes digital music and multimedia (e.g., Real.com and PressPlay.com), as well as erotica (e.g., Playboy.com), humor, recipes and other content intended for amusement, leisure and diversion. Games – Includes online games that are played through a Web browser, both as distributed through portal sites (e.g., Yahoo! and Go.com), and offered direct through specialized gaming sites such as Alien Adoption Agency, Case's Ladder and The Well Dressed SIM.
General News – Includes sites like CNN.com, NYTimes.com and USAToday.com.Greeting Cards – Includes sites like AmericanGreetings.com,
BlueMountainArts.com and Hallmark.com. Single-purchase revenue in this category includes revenue generated from the attachment of gift certificates to content.
Personal Growth – Includes motivational and "self-betterment" sites, such as DailyGuidePosts.com, eDiets.com and WeightWatchers.com.
Research – Includes library-type research tools (e.g., Merriam-Webster, eLibrary.com and Britannica.com), as well as consumer research (e.g., CarFax.com and ConsumerReports.org), people search (e.g., 1800ussearch.com), medical and more.
Sports – Includes sports news, fantasy sports and league sites, such as ESPN.com, SportingNews.com, MLB.com and DRF.com (Daily Racing Form).The top three categories (Business Content/Investment, Entertainment/Lifestyles and Personals/Dating) accounted for 62% of all paid content revenues in the first three quarters of 2002. The total market for paid online content in the U.S. grew to $361.4 million for the quarter, a 14 percent gain over the previous quarter and a 105.3 percent gain over Q3 2001. An interesting statistic put forward by this report is that 85% of money spent by U.S. Consumers for online content goes to the top 50 sites in most of the categories.
Many other research findings support these statistics. A paper conducted on the Existence and Characteristics of Dayparts on the Internet concludes that the total Internet usage of site categories is highest for Entertainment related websites. On an average day, Entertainment websites recorded 14.2% of the total usage. Other significant paid content sites are General News (8.1%), and Business finance websites (5.3%).
In terms of “stickiness” of different categories, Business sites - especially finance and investment ranked the highest. In other words, users are more likely to spend longer time surfing through a business website compared to other categories. This study was conducted by Nielsen//NetRatings. The most addictive web categories, according to this study, for 2002 are:
• Business – Finance and Investment
• General News
• Entertainment
A person spent on an average 21 minutes on a business website, especially finance and investment sites. The average time spent on general news sites was 15 minutes, whereas the average time for entertainment sites was 14 minutes. Nielsen//NetRatings also conducted such studies for Internet users in the UK. The most popular paid online content websites for the year 2002 were News and current affairs (67%). Other popular categories in terms of usage are Entertainment (57%), Dating/Personals (30%), and Games (15%).
• According to a report published by Jupiter Media Metrix, it is predicted that fees for general content will generate $2.3 billion in 2006, up from $700 million last year. Revenues from online games and digital music will total $1.8 billion and $1.7 billion, respectively, compared to $260 million and $30 million in 2001.
• The best money magnets among general content genres in 2006 will be audio-video entertainment's $600 million, followed by $400 million for adult material and $350 million to the business-financial category.
• On the other end of the scale, content aimed at kids and sports will take in $95 million each and just $85 million will go to consumer-shopping aids. The survey found only 6 percent of online consumers willing to pay for kids, sports, video or shopping aid content.
• Datamonitor forecast that the online gaming market will grow from $ 670 million in 2002 to $ 2.9 billion in 2005.Europe will continue to lag behind both the US and Asia-Pacific in terms of online gaming because of its fragmented market, the slower rollout of console online gaming and the overall lower penetration of broadband in the region.
• According to comScore Media Matrix, 19.2 million Internet users from home and 7.9 million Internet users from work went online to personals sites in December 2002, with the at-work users accounting for 35% of the time spent on such sites.
• A report by the National Research Council estimates that there are between 2 million and 8 million subscribers to pornography Web sites, and that they paid between $40 and $100 for a year, for a total of approximately $800 million in 2002.
• According to Nielsen/NetRatings, the most addictive Web categories among home and work users are Finance & Investment, News & Information, Family & Lifestyles, Search Engines/Portals & Communities, and Travel, with Finance sites being the "stickiest." The Finance sites that keep visitors the longest are online trading and banking sites. In January 2002 alone, these financial sites were visited by 51.6 million unique individuals (44 percent of the active Web population) for an average of 21 minutes per visit.
• A research report published by the Informa Media Group estimates that worldwide revenue from e gambling will climb to $14.5 billion by 2006.