Research Special: Three Strikes Threat Would Work, Many Users Would Pay ISPs For Content

The threat of being disconnected by an ISP after being warned three times against illegal downloading would either definitely or probably deter a full 80 percent of consumers, a survey has found…

The Digital Entertainment Survey by Entertainment Media Research for Wiggin in 2008 found 70 percent of freeloaders would change their habits after receiving a single warning, but that’s now dropped to 33 percent for 2009, when customers say it would take three “strikes” to stop them. paidContent:UK advised EMR in the development of the survey, which will be available soon from our reports section.

The findings may not be heeded by the Digital Britain report’s likely final piracy recommendations next week – the draft report favours warning letters but outgoing culture secretary Andy Burnham has all but ruled out disconnections in favour of softer action like bandwidth throttling.

The research also found a consumer willingness to pay their ISPs extra bolt-on fees for bundled content. Just over a quarter of respondents would add an extra £25 a month for unlimited music downloads, or £5 a month for 50 tracks; 34 percent would pay £1 for unlimited streaming music. Nearly half would add £3 a month extra for HD TV/movies and £8 for unlimited VOD TV. EMR packaged up these various figures to say consumers would be prepared to pay an average £34 a month for an ISP service with a variety of entertainment options – more than their current average £20.

Elsewhere, the survey clocked some sobering thoughts for digital media operators…

Consumers won’t pay for most content: New movies are the only content most people surveyed would be willing to pay for – as EMR says, there’s “no revenue in on-demand programming”. But even viewers of new films would rather watch them for free with ads – 41 percent percent of film fans would pay either a subscription or one-off fee to remove the ads.

Broadcasters (and YouTube) hold all the cards in online video: Most respondents have used iPlayer and YouTube but fewer than a fifth have used video sites from portals like MSN, AOL (NYSE: TWX) and Google (NSDQ: GOOG) itself – that falls to even fewer, around a measly 10 percent, for third-tier video sites like Veoh, Vuze, Joost and Babelgum.

Users like social networks, but not targeting: YouTube aside, Friends Reunited is still the second most popular social network to Facebook, ahead of MySpace, Bebo, Yahoo (NSDQ: YHOO) Groups and Twitter. But uh-oh – most respondents disagreed that targeted social network ads are better than generic ones (freaked out by privacy issues?).

The survey took 1,512 responses from UK users online. A full version of the 2009 Digital Entertainment Survey will be available shortly from our reports section.

(Photo: peasap, some rights reserved)