Brits Refuse To Pay For Online Content

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Four out of five web users in the UK would go elsewhere if their favourite site began to charge for content, KPMG has found

Consumers in the UK are far less willing to pay for digital content than their global counterparts, according to KPMG’s annual global ‘Consumers and Convergence’ survey.

The report found that less than a fifth of Brits would be willing to pay for content if a previously free site began charging – 81 percent claim they would go elsewhere. This is despite the fact that 43 percent of consumers globally are now willing to pay to access frequently used online content.

“UK consumers still haven’t come around to the idea of paying for digital content and it is clear that they will move to other sites if pay walls are put up,” said Tudor Aw, head of technology at KPMG Europe.

Reluctance to pay

The news follows reports last weeks that The Times newspaper has lost two thirds of its online readership since it started charging a £1 registration fee in June. Data from the web metrics company Experian Hitwise showed that visits to The Times website had fallen to just 4.16 percent of UK online traffic – compared with 15 percent before registration was introduced.

Despite the public’s reluctance to pay for content, however, Brits are remarkably blasé about their online privacy. According to KPMG’s statistics, 74 percent of UK consumers are willing to receive online ads in exchange for lower content costs, and nearly half of us are willing to allow our personal profile data to be tracked.

“This continues a trend we have seen in previous years and again acts as a pointer as to whether a pay or ad-funded model will eventually succeed,” said Aw.

Mobile Internet is playing an important role in this phenomenon, with people around the world adopting it as an easy and convenient method of carrying out everyday transactions – including banking and shopping. The number of people globally who have used their mobile device for banking has more than doubled over the last 18 months, from 19 percent to 46 percent.

People in the UK are more sceptical about the safety of mobile online transactions, however, with only 19 percent of people having used a mobile device for banking, and 15 percent buying goods and services over a mobile.

“There seems to be a clear distinction in consumers’ minds between uncontrolled use of personal information, and properly regulated use,” said Aw. “They do see the value in allowing service providers to have access to the information necessary for more tailored services, but they are only prepared to do this if the risks are controlled and, crucially, if there is some value in it for them.”

The privacy debate

The debate over online privacy in the UK continues to rage, with social networks in particular coming under increasing pressure to protect users’ data. According to analyst group Ovum, recent privacy debacles from the likes of Google and Facebook are raising public awareness of the Internet giants’ reliance on our data to make their money, as well as the liberties being taken with our privacy.

Meanwhile, attempts by Ofcom to implement the government’s Digital Economy Act have been met with fierce criticism from members of the industry. The first draft of Ofcom’s code of practice for tackling copyright infringement over the Internet was published in May, and includes a ‘three strikes’ rule, which could see persistent infringers being taken to court for illegal file-sharing.

The code requires ISPs to effectively spy on their customers, tracking their online usage and reporting back to copyright holders. BT and TalkTalk have launched a legal challenge against the law, claiming that the Act’s measures to curb online copyright infringement did not receive sufficient scrutiny when the bill was passing through Parliament, and calling for a judicial review by the High Court.

However, the Department of Business, Innovation and Skills has defended its anti-piracy stance, claiming that “The Digital Economy Act sets out to protect our creative economy from the continued threat of online copyright infringement, which industry estimates costs the creative industries, including creators, £400m per year.”

British anti-copyright group, Pirate Party UK, has predicted that Ofcom’s draconian file-sharing proposals will give rise to a new wave of “Pirate ISPs”. These will take advantage of a loophole in the proposed code – which exempts small ISPs with less than 400,000 users from the rules – in order to allow users to share files anonymously online.

“If this strange arbitrary limit does come into effect, we expect existing ISPs will react by splitting and regrouping to take advantage of the cost savings and customer benefits of being smaller,” explained party leader Andrew Robinson.

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