Survey: Two-Thirds of Internet Users Make Online Purchases

Survey: Two-Thirds of Internet Users Make Online Purchases

A Pew survey released in late December reveals a majority of Internet users have made purchases online. Of 750 Internet consumers polled, 63 percent responded they had obtained online goods legally via sales, including video games, music, game codes, and news.

In the study, “65 percent of Internet Users Have Paid for Online Content,” author Jim Jansen notes, “The average expense for those who have paid for content was approximately $47 per month for material they have downloaded or accessed, including both subscription (an average of $12 per month) and individual file access (an average of $22 per month). However, some extremely high-end users pull the average higher, with most purchasers spending about $10 per month.”

Jansen also found the “majority of the Internet users pay for subscription services (23 percent), versus downloading an individual file (16 percent) or accessing streaming content (8 percent).”

Landscape Has Transformed
Nick R. Brown, a research associate at Digital Society, a free-market think tank, says the statistics reveal “the market for online pay content is growing by leaps and bounds.” He continued, “There may be some truth to the statement that consumers were scared of digital goods and services several years ago, but the data no longer supports that notion.”

Jason Lampione, owner of Tennis Logic Management Services, said the retail landscape has transformed in favor of the Internet.

“The consumers who drive our economic engine here in the United States have shifted their focus from buying goods and services from main retailers to seeking deals and discounts online. A majority of mainstream purchasing comes directly from sources such as mobile applications, ringtones, music, digital magazine subscriptions, and the like,” he said.

Demographics of Online Purchases
Jansen reports “similar percentages of men and women Internet users say they pay for online content in most of the examples we gave, with the exception of software, for which online men are more likely to purchase than online women.” Other key demographic findings include:
•    There does not appear to be a racial divide among Internet users associated with accessing online content, with whites and nonwhites equally likely to purchase most forms of online content.
•    Internet users between the ages of 30 and 49 are the most likely to purchase most kinds of content.
•    Internet users who have college degrees or some college are more likely to purchase online content than those with a high school or less than a high school education.
•    Internet users who live in higher-income-bracket households more likely to pay for various kinds of Internet content than those who live in lower-income brackets.

‘New Solutions to Old Challenges’
Although few people reported purchasing music online in the early 2000s, the Pew data reveals 33 percent of all current online goods purchased are music or software downloads.

“Consider that Netflix streaming video is consuming 20 percent of peak traffic nightly, Harmonix has sold 70 million digital songs for its game Rock Band since 2007, and Apple revealed that 280 million apps were downloaded in just the month of December of 2010 producing over $250 million in revenue,” said Brown. “That’s a bold, italicized statement that consumers do pay for online goods and services.”

Ironically, the increase in online sales may be attributed to the economy’s slow growth since 2008, said Lampione.

“During the holiday season in the fourth quarter of 2010, major retailers across the country [saw] a boost in profits since June of 2009. The bloated inventories kept by most retailers forced them to give deep discounts on popular items that were considered overstock, and then were transferred for consumption by the general public. As we head into 2011, retailers are looking for new solutions to old challenges, and the time to act has never been greater than now," he said.

Krystle Russin (krystle@purepolitics.com) writes from Texas.

On the Internet

“65 percent of Internet Users Have Paid for Online Content,” Jim Jansen, the Pew Internet and American Life Project, December 30, 2010: http://www.heartland.org/infotech-news.org/article/29204/Pew_Study_on_Online_Purchases.html