Online Holiday Spending Throws Up Some Kinks

By | December 30, 2003

I think we might have said this last year (and the year before) but this holiday appears to have been the Big One for spending online. According to a report by Goldman Sachs, Harris Interactive and Nielsen//NetRatings (‘the eSpending Report’) the total amount spent online was $15.8 billion, up a whopping 37% from 2002. (They don’t say this was in the U.S., but I’m assuming it is.)

There’s some interesting ticklers in the details too: While every category went up, a lot more was spent on practically everything except music this year. While folk seemed to spent a lot on clothes ($3.1 billion spent, up 40% over 2002), the biggest increase was in DVD and video ($1.4 billion, up 58%), a jump that could be explained largely by the rising popularity in DVD players, one of the biggest selling consumer items this year.

But it’s the meagre 20% rise in online music spending that gets me. They splashed out only $790 million this year — a bit more than half of what they spent on books or video. Now while some of this discrepancy may be blamed on the rise of the DVD — they weren’t available in such numbers last year, they’re usually sold in the same store as music CDs — it doesn’t really hold water when you compare it to the books category, which has been available for years online (at least 1996, if not earlier) and yet also showed an impressive 39% growth, with folk spending $1.4 billion on tomes this year. Could this either be a sign of the lingering appeal of online file sharing, suspicion about the spread of ‘hobbling technologies’ that restrict usage of CDs, or a growing lack of interest in what is on offer at current prices?

I’ve asked Nielsen for more data, so perhaps there’s another explanation for this.

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