What are Internet users willing to pay for?

Pew survey shows 65% of adult web users in U.S. have paid for online content

A new survey by Pew Research Center's Internet & American Life Project shows that nearly two-thirds of adults in the U.S. have spent money on some kind of content online.

But before content producers start celebrating, take a look at the percentages generated by Pew's survey of 755 American adults conducted in late October and early November. Respondents were asked, “Please tell me if you have ever paid to access or to download any of the following types of online content?” * 33% of internet users have paid for digital music online * 33% have paid for software * 21% have paid for apps for their cell phones or tablet computers * 19% have paid for digital games * 18% have paid for digital newspaper, magazine, or journal articles or reports * 16% have paid for videos, movies, or TV shows * 15% have paid for ringtones * 12% have paid for digital photos * 11% have paid for members-only premium content from a website that has other free material on it * 10% have paid for e-books * 7% have paid for podcasts * 5% have paid for tools or materials to use in video or computer games * 5% have paid for “cheats or codes” to help them in video games * 5% have paid to access particular websites such as online dating sites or services * 2% have paid for adult content After music and software -- each of which were purchased online by one-third of the Pew respondents -- there's a big dropoff, with only 21 percent of respondents saying they've paid for mobile apps. Obviously that's going to change as more consumers buy smartphones and tablets -- those markets have years of growth ahead of them in the U.S. But content providers who hope to generate revenue with things like video-game "cheat codes" or podcasts face great challenges. Because they have to compete against free. Nearly every category on the Pew list is overrun with free items, many of which are good enough for the purposes of the consumer. I've downloaded trial versions of software that had limited functionality because it still accomplished what I needed accomplished. (I've also paid for software that I needed to get a job done.) I've watched plenty of videos on YouTube, many of which are copyrighted. Free is out there, and it's not going away, no matter what Rupert Murdoch says. The other sobering caveat for content producers is that many of the respondents who said they've purchased some of the items on the Pew survey may have done so only once, or spent only a little. In fact, 43 percent of respondents who said they pay for online content report spending only $1 to $10 a month. And nearly half of the respondents (46 percent) have purchased just one or two types of content in the Pew survey, with only 16 percent buying six or more types. One more downer note: According to Pew, Internet users in the 30-49 age group are the most likely to have purchased most kinds of content, compared with those who are younger or older. If the younger generation of Internet users is used to not paying for content (the sole exception is music; 43 percent of respondents 18-29 say they have bought music online), it'll be all the more difficult to convert them into paying users. By the way, I've purchased items in four of the 15 categories above (and no, none of them was porn). How about our readers? Please feel free to weigh in below.

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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