With successful paid services for music, video, games, and news now available in Europe, the number of online content buyers in Western Europe is set to grow between 8% and 12% over the next five years, and revenue from paid content is set to grow 65% — from €6.2 billion in 2012 to €10.2 billion by 2017 — according to a report Forrester released today. This growth is being driven by the proliferation of connected devices, crackdowns on piracy, and the increasing popularity of subscription-based models such as Spotify and Netflix. But the very services behind this growth are causing havoc for marketers, as they limit pure advertising opportunities by pushing ad-free content.
“Marketers’ traditional advertising tactics face a new disruption: paid content,” writes Forrester analyst Darika Ahrens in her report. “As a result, the opportunities for firms to reach consumers are splintering. Digital marketers must respond by developing content capabilities: Own content properties, establish sponsorships, and craft content marketing strategies.”
The forecast revenues indicate that consumers are now willing to pay for (ad-free) content, when for years many consumers have been claiming the opposite. This is a trend that content providers will predominantly monetize with subscription models, according to Darika. The potential impact on marketers is huge: Forrester forecasts that by 2017 in Europe, 20% of tablet users will pay for news, the online game buying population will have increased 27%, 60% of video buying will be digital, and the number of music subscribers will double.
Darika blogs about her new report, “Develop Content Capabilities Now,” here.