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PayPal Reveals Preferred Way to Pay for Digital Content

PayPal released a second report on its survey results on the digital goods economy. In part two, it reports on the top reasons for selecting a preferred payment method when paying for digital music and movies – and finds smartphones are popular for viewing such content.

PayPal released the second wave of its Digital Goods Economy Survey, which looks at the attitudes, habits, and behaviors of the digital media consumer across the digital video (including Movie/TV series) and digital music industries. These findings complement recent PayPal research on the digital gaming and eBook industries. The 10-market, 10,000 consumer research study was commissioned with SuperData and conducted in France, Germany, Italy, Japan, Poland, Russia, Spain, United Arab Emirates, UK, and the U.S.

The survey results highlight purchase intent in key verticals; consumption and spending patterns; the role of piracy in the digital goods economy; and the demographic nuances of age, gender, and region.

“The new digital economies that have emerged in the entertainment industry have changed everything from where content is consumed to consumer marketing to how the content creators themselves are monetizing their work,” said Melissa O’Malley, Director, Global Initiatives at PayPal. “With the velocity of payments in this space, PayPal play a critical role in facilitating, securing and simplifying the transaction for both merchants and customers.”

Key findings from the U.S. research include:

Physical copies are losing appeal

With this year’s Grammy awards open to streaming only recordings, a clear shift in both music ownership and consumption has occurred. Only 12 percent U.S. respondents preferred owning physical copies of their music and only 17 percent wanted to have a mix of both physical and digital music. The majority of consumers prefer to either own all their music and store digitally (39 percent) or stream or subscribe to their music so they have access to it on the go (28 percent).

Millennials are less concerned with “owning” their music than older consumers

US consumers ages 18-34 use paid streaming services (63 percent) at a similar rate to paid music downloads (60 percent). However, for consumers ages 35 and older, just over half (51 percent) use streaming services, while 70 percent use paid download services, indicating a preference to own their music as opposed to just streaming it.

Smartphones are the platform of choice

US respondents use smartphones (58 percent) when asked which devices they use to watch movies or TV series that are purchased or streamed online in the last three months. The smartphone was also the device most cited by consumers (86 percent) for listening to streamed or purchased music online.

Mobile is driving transactions across both verticals

Regardless of where the content is being consumed, mobile is driving purchases across digital music and movies / TV. Almost 70 percent of movie / TV series consumers made a purchase on their mobile device, while 72 percent of digital music consumers purchased music on their mobile device. The preference for mobile purchases reinforces why PayPal emphasizes that merchants simplify the checkout process for consumers: “ease of use” and “processing payments quickly” were listed as the number one and two reasons across both verticals in why consumers select a specific payment method.

Video and music subscription site customers are very loyal

Millennial cord cutters rely on services like Netflix for entertainment, and in the study less than half stated they have cancelled a video streaming subscription after less than twelve months. Similarly, half of all consumers using music streaming services indicated that they had kept an active subscription for a year or more.

Piracy is more pervasive before movies are released to video

Nearly 90 percent of respondents reported they have not pirated or illegally downloaded movies or series in the last three months, piracy continues plague the movie and TV industry. Seventy-two percent of Americans polled most often pirate while there’s still hype around a movie but before it is released on video, and 24 percent of those polled will pirate while the movie is still in the theater. Twenty-one percent of those polled who pirate admitted that they only pirate TV shows and not movies.

Full US results from the survey research:

Part One – released last year (PDF)

Part Two – released February 2, 2017 (PDF)

Source: PayPal Press Release

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.