Unlocking digital content revenue in Asia-Pacific

According to Scott Chow, Vertical Product Manager Digital Goods at PayPal, Asia-Pacific ranks among the world’s leaders in digital media consumption – particularly in markets like Japan, South Korea and Hong Kong. Currently PayPal has about 6 million active users in the region.

“There’s a lot of e-commerce going on in Asia-Pacific actually, particularly when it comes to games. In fact, the idea of micro-payments originated out of China and Korea where payments at a lower price-point were successful at capturing the mass market,” Chow told Campaign in an interview yesterday.

He added that the there was still great potential for growth in the region via the monetisation of content like music, video and publications.

And the potential for growth is certainly present. Last year, a total of US$3.4 billion was spent on digital goods via Pay Pal globally representing a 50% increase from 2009. Furthermore, recent studies have found that Asia-Pacific is home to the highest concentration of the world’s most intensive mobile phone users.  The demand is there, the key is monetising it.

Digital goods success stories have three main things in common, noted Chow, they offer unique and different content, targeted specific consumer segments and / or provided convenience to users willing to pay for it.

“Consumers aren’t going to pay for general information they can find anywhere. But if you have unique and specialised content it has value to the right audience,” said Chow. If publishers were to cater to specific interests with such as finance, sports or even more unique hobbies, they would find a paying audience for their content. “Especially if it’s faster and more convenient,” he added.

In the busy world we live in today, convenience as a value should not be underestimated. “In the gaming space there was a merchant who provided a service that streamed free games to mobile devices.  This was especially popular with iPhone users who wanted access to free Flash games. While the games were free, people were willing to pay for the convenience and access,” said Chow.

Another success story, unfortunately not present in Asia-Pacific, is Sweden-based Spotify which, for a subscription fee, allows users to stream unlimited amounts of music to any of their devices hooked up to the internet. Users can also assemble and swap playlists and never have to worry about backing up their music collection.

“A service like Spotify may win over some of the crowd in Asia who have been illegally downloading music for free. Not all of course – again it’s really based on the consumer you’re targeting,” said Chow.

At present things are only just starting for Asia Pacific and will gain momentum with demand and as more and more content providers invest in digitising their material – this is especially true of the print publication sector.

“In Asia-Pacific the segment of consumers willing to pay for print dwarfs the segment willing to pay for digital content. But this is swiftly changing,” said Chow. “Overall, we see great runway for digital media consumption in Asia.”