November 27, 2007

Consumers reluctant to buy online content

by Jan Harris

According to a new survey by business law firm Olswang, consumers will tolerate online advertising, as long as content is free.

Although 84 per cent of respondents to the survey said they found online advertising intrusive, they were willing to tolerate the ads in order to have access to free content.

Over 30 per cent of respondents to Olswang’s third annual Convergence Consumer Survey said they streamed or downloaded movie and TV content on a monthly basis.

Watching free content on video-sharing sites such as YouTube, and accessing streaming music and podcasts are very popular activities, but the survey found that many people would be unwilling to pay for audiovisual content.

Three times more people consume free content than paid content, while those who do not yet access online content are three times more interested in free content.

According to Matthew Phillips, a media, communications and technology partner at Olswang, it will be challenging for service providers to overcome consumers’ reluctance to pay for content and advertising is likely to become the natural alternative.

The report suggests that companies should consider alternative business models to direct consumer payment for content.

 

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