Lies, Damn Lies, and 65 Percent Purchase Online Statistics

Everybody spends money for online content, or so you would think if you read the Pew Internet study just released. The report claims that 65 percent of internet users have paid for online content – which may be true but it is also misleading. The title is so misleading in fact, that I would bet money the title gets tweeted and misinterpreted by news outlets, bloggers, and online curators.

A huge tweet rate and coverage could mean that it’s a good title, but what’s really going on? If you read deeper, that’s 65 percent that have ever paid for content. With that in mind, I guess the number may very well be correct for internet users in the US. That means if you have ever paid for:

  1. digital music online
  2. software
  3. apps for their cell phones or tablet computers
  4. digital games
  5. digital newspaper, magazine, or journal articles or reports
  6. videos, movies, or TV shows
  7. ringtones
  8. digital photos
  9. members‐only premium content from a website that has other free material on it
  10. e‐books
  11. podcasts
  12. tools or materials to use in video or computer games
  13. “cheats or codes” to help them in video games
  14. access particular websites such as online dating sites or services
  15. adult content

then you would be included. If you look at that list, it also includes buying physical content from online stores (2 and 12), if you ever bought ringtones for your phone (7), and even if you subscribe to physical goods services such as Comcast cable, Netflix, and your local delivered newspaper (5 and 6).

Skeptics should read the report to see how the questions were asked, especially for 5 and 6, since the questions suggest that if you have receive online content services as part of your paid newspaper, cable, or movie delivery service, you should check “yes” that you have purchased online content.

For example, my local newpaper, The San Jose Mercury News offers an e-edition. It’s terribly cumbersome, you can’t bookmark it, and links from their email into the e-edition do not link to anything related to article. Yet according to the survey used in the report, since my paper subscription includes the free online edition, I should check “yes” indicating I paid for online content. Similarly, my Netflix 4 disc plan includes free streaming. Even if I didn’t use streaming, I should check “yes” since it’s offered with my mail-in service.

In spite of its flaws, the study does have some valuable nuggets:

  • Typical user pays about $10 per month for online content
  • Only 18 percent of users ever paid for news (not a good sign for paywalls)

If you come away with anything, the key points I see is that the online budget is low, around $10/month for all content combined. Just to be clear – if only $10/month is spent, that would include subscriptions, micropayments, or iTunes-style aggregated purchases. Many people, like myself, tried news subscription or per-article purchases and are no longer willing pay for it, so the 18 percent number is artificially high and should not be used to build any business plans.

In all fairness, Pew has to straddle the line between getting as much detail as possible from a lot of very specific questions and minimizing survey fatigue. The more detailed question, the fewer answers they are likely to receive. The methodology does not state if respondents were paid, so if the feedback was free, shorter, more vague question are to be expected.

I don’t blame Pew for the vague or over-inclusive questions, and I do appreciate these surveys as a public service that also helps product managers and marketers. I mostly worry that a typical “Joe Reader” will not go deep enough and misuse the information or misinterpret it to justify some news paywall, content purchasing scheme, or unbalanced news story.

About Duane Kuroda

Business ninja, deal hunter, Internet marketer, and technology fiddler obsessed about growing companies and launching products. Currently at Peerspin, Duane’s past lives include Vice President of Marketing roles at companies leading micropayments, Internet video, and online communities as well as research and consulting for mobile advertising. Duane has spoken at conferences including Digital Hollywood and Digital Video Expo on topics covering monetizing online content and online video, has appeared on TechNowTV and KNTV, and has been quoted in various magazines. Follow Duane on Twitter: @dkuroda.

2 Responses to Lies, Damn Lies, and 65 Percent Purchase Online Statistics

  1. Jim Jansen says:

    Hi! Interesting post and commentary.

    As FYI (1) the subscription service referred to online subscriptions and (2) the survey was conduct via phone, both landline and cell.

    Again, interesting post.

  2. CT Moore says:

    This is why I've always felt a bit dishonest as a marketer. We have a mandate to lean toward the sensation with our call to actions, and that is doubly so with how we title out content. How many times have you stumbled on a blog post that offered 5 or 10 ways to solve a problem, but it still didn't tell you anything you didn't already know.