Collaboration and acting like a retailer are keys to Internet content sales, and charging for content may help ad sales, Forrester Research Inc. says.

Seventy percent of media companies surveyed by the respected Cambridge, Mass.-based IT consulting firm expect that consumer payments for content will increase soon, with a critical mass of customers developing in 2003.

These recommendations and findings are in a report, "Getting Paid for Content," released March 28.

Media companies should get ready by knocking down organizational barriers which prevent the creation of product assortments, leverage their niche customer bases and partner with companies "that have pipes to file, but no content" -- including wireless carriers. In turn, Forrester, says, such carriers, cable companies, ISPs and Internet portals "must act as distributors and aggregators . . . tak[ing] a usaged-based commission on each sale plus a fee for processing the transaction and providing customer service."

Those consumers most likely to pay, Forrester found, will be those with high-speed Internet connections who are experienced users rather than "newbies." Broadband users are 78 percent more willing to pay than those with dial-up connections, as are those who have been online three years or more, Forrester concludes.

Forrester said its data "projects that one-third of Internet users will be willing to pay for content by 2003, and that the wireless Web and broadband will reach 30% and 37% of U.S. households, respectively." The more customers make purchases, the more products content vendors will create, says the report by Forrester analysts Lisa Allen, Charlene Li, Sadaf Roshan and Greg Flemming.

Among recommendations Forrester makes to media companies:

-- Collaborate across channels with partners and other audience owners to exchange content and users. Web services will make bundling cable-like tiers of content together a workable business model, Forrester says.

"There won't be one killer ap to unleash demand," the analysts write. "It'll take multiple product assortments from companies with different kinds of content to satisfy all comers, and creating an assortment will be more complex than simply deciding whether to charge for content available for free."

-- Act like retailers, creating content tiers from free to premium paid and price-differentiated by the needs and interests of the user. This means learning those interests, forging partnerships with other audience owners to exchange content and users, and focusing on packaging and assortment.

"Charging consumers for different pieces of a product mix, no matter how carefully crafted, will not result in one huge revenue generator," says the Forrester report. "But it will help media companies optimize their business by turning some of their content into dollars."

-- Charging may help sell advertising. Even though the number of page views might shrink as some parts of a content web site are no longer free, by registering and demographically segregating users, targetted advertising can be sold at dramatically higher CPMs, the Forrest study notes.

"That's why some parts of The Wall Street Journal's site command $100 CPMs -- enough to make sales managers at most other sites cry," the Forrester analysts write. "Additionally, sites with growing numbers of subscribers and shrinking ancellation rates are proof of brand loyalty that will be mighty attractive to advertisers whose brand shares the same attributes."