This value is derived from activities for which there are no direct charges, (i.e. they are paid for by advertising) such as social networking and watching free videos. The research suggests that this 'free' activity is actually worth approximately 150 billion euros a year.
Of course, consumers are actually paying for some of these web services (music subscriptions for example) to the value of approximately 30 billion euros. They also pay indirectly through advertising and McKinsey believes that consumers would pay to avoid 'clutter' and potential data risks to a value of 20 billion euros. Therefore, they suggest, there is a 100 billion euro 'surplus' every year and this is set to grow.
McKinsey considers web economics could shift in three ways:
- A rise in service costs - as already seen in premium offerings. This might reduce usage.
- An increase in advertising - raising issues about perceived 'pollution'.
- Alternative monetisation - including collecting revenues from advertisers and users.
The full article is published on McKinsey Quarterly.