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Who's Doing the Spending on Content?
Laurie A. Seymour

IDC latest study describes content as digitized information - regardless of media type - made available over networks, such as text, music, pictures, or video. The individual consumer is often the first market that comes to mind when thinking of content service providers (CSPs). But although individuals represent almost 100% of spending on content services, the money for CSPs isn't coming from the consumer.

IDC forecast that the worldwide CSP market, including both business and consumer content, would increase to $108 billion by 2006. This represents a 20% compound annual growth rate (CAGR) from 2001.

The vast majority of revenue comes from an industry that is more than 30 years old. Network delivery of content has been in business almost as long (if not perhaps a bit longer) than email. One percent of content buyers are the business volume buyers - the corporate buyers - and they account for well into the majority of spending.

While the consumer segment of digital content is exciting and tumultuous, its full potential continues to face the same barriers as always.

First and foremost, there are still warring factions of content owners, publishers, middlemen, and the entire process of developing and delivering content to the consumer that must be resolved for legal digital distribution. Content is not being delivered because the creators and distributors of said content disagree on the best way to distribute the wealth from digital distribution. Sure, there are technological challenges, but those will be surmounted once the decision has been made to do so.

Second, content is free! George Lucas's new movie Star Wars: Episode 2 Attack of the Clones is the perfect example for exactly why content owners must come forward with better solutions for digital distribution. The new Star Wars movie hasn't even been released to theaters and a bootleg copy is already on the Internet, free for download. The freebooters didn't waste any time on this one. Content owners and creators must learn to outfox them, and encryption isn't the answer.

Those looking to CSPs for revenue should look to forge relationships with the business content providers. Those wanting to deliver consumer content should get in the mix to help the entertainment industry evolve its thinking and replace a system of royalty distribution that is beyond repair. Otherwise, the stalemate will continue.



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