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Internet Users Still Cheap, Spend Only $1 to $10 on Digital Content

Who is willing to purchase content online? What types of content are they interested in buying? These are the questions that have haunted businesses as they shift to the digital age, a transition that has dealt a harsh hand to most sectors from the music to publishing industries. But the market is growing, bolstered by an increasing willingness to download, a seemingly infinite audience reach, and new opportunities—apps, games, ringtones, MP3s—on a wide range of devices.

The digital marketplace is the likely savior of most industries. That is, if consumers are willing to spend money on the web. Do we expect too much for free online?

According to a Pew Research Center report, released Thursday, the amount of users spending money on digital content has grown, but the amount they're willing to spend is still remarkably low. While almost 65% of Internet users have paid to access or download content online, the typical user pays only between $1 to $10 per month for the content.

What's more, nearly half of Internet users have purchased just one or two types of content. Paid music downloads and software purchases are most popular (33%) followed by smartphone apps (21%). About 18% had paid for digital newspaper, magazine, or journal reports, but just 11% have paid for premium content when a website offers other free material. On the lower end of the totem pole, surprisingly, were e-books, which earned only 10% of paid downloads—a figure not too much greater than those who paid for adult content (2%).

Still, there are signs that some consumers are willing to spend more money online. Though the average user paid just $10 per month for digital content, high-end downloaders pulled the average overall expense for paid content up to around $47, including subscription services (an average of $12/month) and individual file downloads (an average of $22/month). Internet users are more likely to pay for subscriptions (23%) such as Netflix, versus downloading files (16%) or streaming content (8%).

Though figures are still low and users too frugal, the rate of consumer purchases is growing remarkably fast. It's been nine years since the iPod's release, and already music downloads have shot up to the most popular user purchase. In just three years since the Kindle came out, e-books have stretched to 10% of users and ballooned to a billion-dollar market. And in only two years since Apple's app store went live, smartphone and tablet apps are now purchased by a fifth of all Internet users.

That's a significant leap for a market where, a decade ago, most of these percentages hovered around, well, zero.

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