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This is the last in a series of posts over this week that looks at the most significant developments of this year in the sectors that we cover, from publishing to mobile to advertising.
Of the seven years I’ve been writing about our namesake topic here at paidContent, 2011 is the hands-down winner when it comes people paying for digital content. The numbers aren’t all in yet and some of it will be hard to quantify given the lack of complete transparency but it’s clear that more people are willing to pay for digital access to music, news, movies, TV, games, books and magazines.
That doesn’t mean everyone is willing to pay cash for content and it doesn’t mean that every pay plan is working. It also doesn’t mean that there are more people willing to pay for content — some are swapping print or pay TV bills for digital editions and streaming. Others are taking advantage of subscriptions that have expanded to include multiple platforms: subscribe to the print New York Times, New Yorker or Sports Illustrated and get digital included. The quick adoption of tablets led by the iPad combined with app-based or app-like pay models and the expansion of e-readers with newsstands and cross-device platforms played key roles and will continue to do so. Ditto with expanded access to video online and online windowing changes that make subscriptions or downloads more attractive,
A few numbers to consider:
324,000: That’s the number of paying digital subs to NYTimes.com (NYSE: NYT) at the end of Q3, six months into first year of the paper’s metered paywall. Between digital-only subs, access for home-delivery subs and sponsored relationships like a deal with Lincoln, NYTimes.com claimed more than 1.2 million users had full access via digital. In a related note, home delivery circulation was up. It took digital subscription pioneer WSJ.com more than a year to hit 100,000 paying subs when it launched in the ’90s.
$5: Comedian Louis CK skipped the middle man for his latest special, producing it and then offering it directly to consumers for $5 a download earlier this month. He reported grossing $500,000 in the first four days and hitting $1 million in 12 days. The breakdown so far via Louis CK on his site: $250,000 to cover production and distribution costs — yes, that means he was in the black within days; $250,000 to his staff as a bonus; $280,000 to charity and $220,000 for him. Another kind of breakdown: 200,000 people were willing to pay. Left to be seen: will they pay the second time and a third or was this a lightening strike?
21.4 million: Amid the bad PR from its pricing and branding missteps and the fascination with its wilting stock price, it’s easy to miss one of the most important numbers from Netflix: at the end of Q3, it had more than 21.4 million subscribers for streaming and 13.9 million for DVD. The 23.8 million total was down due to a 60 percent increase in pricing for some subscribers when Netflix (NSDQ: NFLX) split charges for streaming and DVD but the company had more than 4 million net adds year over year. It also expanded its streaming-only international footprint from Canada to Latin America. Whatever you think about Reed Hastings and the strategic blunders of 2011, getting 21 million people to pay $8 a month for streaming video access through Netflix has to be acknowledged.
1 million: Hulu Plus, the subscription video service from online video portal Hulu, was on target to hit 1 million paying subscribers this year. Meanwhile, subscription music service Rhapsody just announced it has hit 1 million paying subs. Granted, that would sound a lot more impressive if it hadn’t taken a decade to accomplish but it’s a sign of how much has changed since Rhapsody launched its subscription service. Ease of use across devices and platforms makes all the difference.
$48.8 billion: From Google (NSDQ: GOOG) to LinkedIn (NYSE: LNKD) and United Online (NSDQ: UNTD), the companies in our inaugural paidContent 50 accounted for an estimated nearly $50 billion in digital revenue. How much is from consumers paying directly for digital access or content? Impossible to say. But it’s safe to say both numbers are going up. It’s also safe to say that traditional media will continue to see more dollars move to digital access and that the full impact of that transition has yet to be felt.
Read the rest of the posts in our Highlights of 2011 archives.