The Bloor Perspective: the US pays for it online and MMS - winner or loser?

A study from the US Online Publishing Association (OPA) argues that paid for content is on the rise in the US. It says in 2001 the US paid-for content market was worth $675m, a rise of 92 per cent. Better still, in the first quarter of 2002 the population of the US spent $330m - an increase of 155 per cent over the same period a year earlier.

That's some rise. Those feeling the benefit are touting business content, entertainment or personals/dating services. Research, news, games, directories, credit help, personal growth, sports and greeting cards made up the rest of the companies that were charging for content, accounting for 41 per cent of the consumer spending.

Hardly surprisingly, this stuff isn't being paid for with the long, long awaited micropayments that we thought would be powering commerce by now. It is subscriptions. Consumers just can't get enough of them, by the look of it. In 2001 49 per cent of all online content payments were made through annual subscriptions, 31 per cent were from monthly subscriptions and only 15 per cent were for single payments.

It would appear there are a lot of people prepared to try the content subscription model. The OPA reckons that in 2001 as many as 12 million paid for content across some 1,700 websites - equating to approximately 7,000 paying customers per site, all of which must stump up roughly $56 a year. That's more than $300,000 per annum for some sites and, combined with advertising revenues, a nice little earner.

It doesn't quite work out like that online unfortunately. The money isn't being evenly distributed across sites. Rather it is a prime 50 web properties that take 85 per cent of the revenues from paid-for content. These include real.com, at number one, wsj.com came in second, match.com in third, yahoo.com in fourth and consumerreports.com fifth. Weightwatchers was seventh, Playboy thirteenth and Hallmark nineteenth.

*You say you want a wireless revolution?*

The expected surge in revenues from multimedia text messaging (MMS) has been scorned by the Wireless World Forum (W2F) which has, quite rightly, pointed out that the wireless industry is once again kidding itself.

Multimedia text messaging has been touted as a life saver for businesses involved with the wireless industry - everyone from carriers to integrators. And many of them are expecting to book revenues from the gradually emerging service in the coming years. It will be, they claim, the next killer app - stealing the crown of the traditional text message. To date it has been predicted that MMS will accrue revenues in excess of $50bn per annum.

However, the W2F begs to disagree. Following some seemingly in-depth analysis of the potential market the W2F reckons multimedia messages will only be worth $5.8bn by 2006 across what it has identified as the key 16 markets, including such geographies as the UK, Spain, Italy, Honk Kong, Norway, Australia and Canada.

That's a heady blow for an industry that is already struggling to find any revenues but it can't come as any surprise to the disgruntled investors that are banking on the ill-constructed business models - a term we use loosely - of these so-called wireless pioneers.

The ability to send colour graphics and sound is something that the industry is very much pinning its hopes on. Last week in the UK Orange gave details about its impending launch of a picture message service that will allow customers to send photos from mobile to mobile.

The service will cost 40p a pop, compared with Vodafone's flat rate £20 charge per month, and Orange expects that 40 per cent of its customers will be using camera phones by 2005. It would be interesting to see the details of that research because it doesn't appear to tally with the independently produced W2F study.

**Bloor Research is a leading independent analyst organisation in Europe. You can find out more at http://www.bloor-research.com or by emailing mail@bloor-research.com .