11/17/2004

Online, people actually (gasp!) read | csmonitor.com

Online, people actually (gasp!) read | csmonitor.com: "Content is where I expect much of the real money will be made on the Internet, just as it was in broadcasting,' Bill Gates wrote way back in 1996 in an article entitled 'Content Is King.'

It has taken eight years - and it's still not exactly clear how the money will be made. But now a report finally puts some numbers on the assumption: For the first time, content can be officially crowned.

That's good news for a wide array of news, sports, and entertainment websites - from CNN.com to Yahoo! Sports - that are supported by advertising. Such sites have finally topped e-mailing and other online communication activities.

Last month, people spent 40.2 percent of their time online viewing content (see chart at right), more time than they spent on communication (39.8 percent), commerce (15.8 percent), or search (4.3 percent), according to an Internet Activity Index released Thursday. It was the second straight month that the index had shown content as the highest-rated activity.

A year earlier the same survey showed a dramatically different picture: E-mail and other communication occupied 45.2 percent of people's online time with content at just 35.3 percent, commerce at 16.5, and search at 3.0.

'What we've been seeing is slowly but surely the amount of time spent on content is going up and up,' says Michael Zimbalist, president of the Online Publishers Association (OPA), which commissions the monthly study from Nielsen//NetRatings. One reason, he says, is the rise of broadband connections, which allow users to be online continuously and to quickly access content such as video and audio. The number of people using broadband to access the Internet surpassed those using dial-up phone connections for the first time in July.

The survey is meant 'to provide a kind of macro view of what's happening on the Internet in these four distinct areas,' Mr. Zimbalist says. Government sites, such as the Internal Revenue Service or other government agencies whose addresses end in .gov, were not included. Neither were school and university sites, whose addresses end in .edu.

The OPA also reported this week that consumer spending for online content in the first half of 2004 grew to $853 million, a rise of 14 percent over the same period in 2003. Online content includes activities such as downloading music and playing games, as well as subscriptions to online publications, but does not include buying products over the Net. The three fastest-growing areas in paid content are games, sports, and entertainment, Zimbalist says. Their growth is 'fueled by a [younger] generation growing up with the Internet as part of their lives.'"

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