The Next Attempt At Micropayments

from the try,-try-again dept

Stop me if you've heard this one before... Suddenly, new micropayment technologies are hot, and everyone is talking about the billions of dollars that could be made by selling content for just a little bit of money. All of these estimates use silly math. They talk about how a large number of little transactions adds up to a large number. That may be true, but it makes a huge, unstated, assumption: that there will be a large number of transactions. Notice that the article linked here never looks at things from the consumer side to see if people actually want to be nickeled and dimed for every piece of content they find online. There may be some places where micropayment fees will work - but it's going to be difficult to make significant money that way. First off, people pay money to get online because they want to access content. If everything is going behind a paid wall, suddenly they feel like they're getting double-billed. Why do they need to pay to get online if there's nothing there? Furthermore, each bit of "paid content" competes with free content. Admittedly, if the blocked off content is very very good or comes with some other advantages, some people will pay for it. However, the vast majority of folks will hunt out a "good enough" substitute that they can find for free. Also, the article completely ignores the important comparison that content providers need to make if they're going to block off content. It talks about the potential to make money off of micropayments, but that's a useless number by itself. The important point is whether or not they can make more from micropayments than they could from offering free content supported by some other business model? I can see plenty of content providers jumping on this bandwagon because they haven't been able to figure out how to properly create an online site that makes money - but they may discover that it doesn't do them very much good. There is some content for which micropayments will work - but it's a very limited set - and most content providers aren't going to think this out before throwing up a paid wall.

6 Comments | Leave a Comment..