Consumers face cash for content call

[bongme]

hi

Monday, 14 October, 2002

Persuading users to pay for content will be the next battle for UK broadband providers determined to make money out of high-speed net access.

BT's new direct broadband service has altered the landscape by offering for the first time an access-only product which allows users to pick and choose content from a variety of providers.

In response to this, both Freeserve and AOL will shortly launch content-rich services, offering users access to photography, music as well as bundling in mobile services such as text messaging.

The battle between access and content is on.

Persuading users to pay

BT Retail's Angus Porter has described the internet service provider (ISP) model (which offers both access and content) as "constipated" and is hoping its access-only service will attract one million customers by the summer of next year.

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What broadband surfers would pay for

37% music

33% video

14% gaming

13% enhanced e-mail

Stats from Jupiter Media

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He has even suggested that BT's own ISP Openworld might have to abandon access to focus on content services.

In the US, AOL is already working on ways to persuade users to pay for content and its merger with Time Warner would give it a head start in offering a variety of media content, said Jupiter Media analyst Dan Stevenson.

In France, Freeserve's parent company Wanadoo is also charging users for a variety of content.

It may be too early for UK surfers, just getting used to the change from narrowband to broadband, to be persuaded to pay for content though.

"My feeling is that the focus in the UK will be on access. Customers may not be attracted by content as they can get things such as text messaging and music free elsewhere," said Mr Stevenson.

Korean lessons

Alongside the thorny issue of dealing with the piracy of music, one of the keys to persuading users to pay for added content will be making sure it is easy for surfers to do so.

A recent government fact-finding mission to South Korea could provide interesting reading for UK ISPs.

Korea has the highest penetration of broadband anywhere in the world with over 60% of the population connected to high-speed net services.

Users are happy to pay for a wide variety of content, including video-on-demand.

By far the most popular way of paying for content in Korea is a simple system which gives surfers a pre-paid cyber-wallet to spend.

European view

Users buy currency in advance via a text message and are sent an authorisation code which is typed into the website and debited from their mobile phone bill.

Koreans like the system because it is easy to use and allows them to control their online budget.

New research from Jupiter Media suggests that Europeans might not favour such a system.

Only 4% said that they would be willing to pay via a pre-paid mobile card.

The majority - 41% - said they would prefer to have payments added to their ISP bill.

Bongme