Paid content to boom in Europe

14 November 2012

LONDON: Annual revenues from paid content across Western Europe's biggest markets will increase by more than half during the next five years, topping €10bn overall, a forecast has predicted.

Forrester, the insights provider, predicted spending on content in seven countries – France, Germany, Italy, the Netherlands, Spain, Sweden and the UK – would reach a combined €10.2bn in 2017.

This can be compared with an expected return of €6.2bn in 2012, representing growth of 65% for the forecast period as a whole.

Among the forces supporting this shift are greater efforts to limit piracy, as well as the roll out of connected devices like smartphones and tablets.

"The growth in Western Europeans buying content shows us that audiences want, and value, content," Darika Ahrens, a Forrester analyst, said. "Marketers can ensure their brand gains presence by developing content capabilities."

Within the wider total, it was suggested that video will become the most valuable sector by the end of this timeframe, expanding from €2.2bn to €3.9bn.

Games were pegged to enjoy an expansion from €2.3bn to €3.4bn in the next five years, figures placed at €1.5bn and €2.6bn respectively when discussing music.

News, a category that has proved harder to monetise, will record a 77% lift to €250m in sales, including subscriptions, as the number of people paying for this material increases from 4.8m to 8.1m.

More specifically the analysis estimated that 20% of tablet users could pay for news by 2017. The number of people buying games should also rise by 20%, while 60% of video purchases are due to be digital at this time.

The surge in popularity of subscription-led properties like Spotify, the music service, and Netflix, the video platform, is helping fuel such trends, but equally poses problems, according to Ahrens.

She said: "The very services driving growth in digital content consumption are limiting pure advertising opportunity for brands, by adopting payment models that don't require brand advertising ... and even driving consumer appetite for more ad-free content.

"From the films we stream online to the playlists we create and share with our friends within digital music services – consumers are now willing to pay for ad-free content in a way that we couldn't have conceived of five years ago."

Data sourced from Forrester/The Guardian; additional content by Warc staff