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For this model to succeed, however, a small site with no strong brand must cater to a niche market with information that nobody else has. Users will not like to pay the subscription fees if the site offers information similar to a hundred other free sites.
The site has to be dynamic, comprehensive, and the data needs to be accurate. It must provide users with a sense that they belong to something special in order to increase the perceived value of the site.

Proponents of this model believe that having 100 paying visitors per day is still much better than 100,000 free ones.


Paid online content business is successful and growing
Overall market size
Over half a billion people worldwide now have Internet access, according to new research from Nielsen-Netratings. The research company’s latest study (Dec 2002) indicates that 580 million people have Net access, compared to 563 million in the third quarter of 2002. According to ITU the worldwide Internet population of 2002 is a bit higher at 655 million. Projected figures for Internet population for the year 2004 are 709.1 million (eMarketer) and 945 million (Computer Industry Almanac).

The 11 major Internet markets measured by Nielsen-Netratings experienced a four percent average increase in online population between the fourth quarter of 2001 and the fourth quarter of 2002. The US posted the greatest increase in the number of adults online over the same period with nearly 10 million people over the age of 16 gaining Net access. The US now accounts for 29 percent of the global Internet access universe, followed by Europe with 23 percent, Asia-Pacific with 13 percent, and Latin America with two percent.

In 2001, the last full year where numbers are available, the Department of Commerce presented e-commerce sales versus total U.S retail sales. It revealed that the $3.16 trillion retail industry saw a total of $37.7 billion in sales take place online -- comprising 1.2 percent of the total. This year e-commerce is tracking about the same. Through the third quarter, the last full quarter where numbers are available, total retail sales were $856 billion versus $11 billion in e-commerce, about a 1.3 percent share.
Growth of paid content sites
As stated earlier, there is a growing tendency amongst Internet users to pay for valuable content online. The following facts corroborate the trend towards value added services and the high importance users give to effective use of their time.

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