Rise of tablet computers and smartphones could help paid-content market rise to £8bn a year by 2017, says report
The rise of tablets and smartphones will help grow the online paid-content market 65% to £8bn a year by 2017, with consumer spending on digital news rocketing 77% to almost £250m, according to a report.
Research firm Forrester also warns that the rise of paid-for services on mobile devices and tablets could limit advertising revenue opportunities.
The Forrester report found that over the next five years, the amount spent on music, games, film, TV and news content by consumers in western Europe will surge by 65% from €6.2bn (£5bn) to €10.2bn.
News content spend will grow by 77% from €158m this year to €279m in 2017, including digital subscriptions to newspapers such as the Financial Times, New York Times, Wall Street Journal Europe, the Times and Sunday Times.
The number of people choosing to buy news content online will jump 68% from 4.8 million to 8.1 million, with 20% of tablet users choosing to do so by 2017, according to Forrester.
Darika Ahrens, a Forrester analyst, said that its report debunks the traditional view that consumers will not pay for online content.
"While consumer research for years reported that consumers claimed they wouldn't pay for content, the forecast revenues indicate otherwise," she said.
Ahrens added that there appears to be a seismic change in technological advances, as well as the type of services provided in the past few years, which is changing consumer habits.
"Until now, consumer online content needs were largely unmet," she said. "Demand among European internet users willing to pay for digital content grew between 2009 and 2010, but the number of online buyers didn't due to a lack of compelling service offerings."
Changes since then include a boost in the number of smartphones, tablets and internet-connected games consoles available; crackdowns on piracy, especially in online music; and the popularity of paid-for content services offered by companies such as Spotify and Netflix.
The report argues that subscription services will be the most successful paid-for model.
Digital spending on music will grow from €1.5bn in 2012, to €2.6bn in 2017, video will grow from €2.2bn to €3.9bn, and games will rise from €2.3bn to €3.4bn, according to Forrester.
About 60% of video content purchases will be digital and the number of subscribers to music services will double.
However, the knock-on effect of the rise of paid-for services is the loss of digital "pure advertising" opportunities for companies.
"Although content consumption across connected devices is on the rise, the very services driving digital content growth are limiting pure advertising opportunities for brands," she says. "Payment models don't require brand advertising for revenue and … are driving consumer appetite for more ad-free content."
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