Micropayments Seen Driving Paid Content

from the this-again? dept

After years and years of people talking about it, there’s some evidence that a few micropayment systems might be working. The article focuses on sports content, but brings up iTunes as an example that they’re trying to follow. Of course, I still think it’s a little early to consider iTunes a complete success, as the real test will be how well it does over time. However, it sounds like the people quoted in the article do understand the tradeoffs to micropayments. They know that the system has to be very user friendly, and they worry about alienating fans by charging too much. It really does become a question of where and how do you want to make money. If the sport is trying to attract more fans, blocking content behind paid subscriptions doesn’t seem like a very good idea. You will get some money out of loyal fans, but you could be cutting off a future supply of fans (and those future fans won’t go to games, won’t buy jerseys, hats, or other promotional items). For years, the real money in sports has not been in selling the content itself, but in selling things around the content. The games, themselves, really act as promotional items for other items, such as tickets, clothing, and (most importantly) eyeballs for advertisers. If micropayments cut down on the number of viewers, it’s going to make advertisers think twice, and it’s hard for me to believe that the aggregated content fees make up for the lost advertising revenue in the long run. On the other hand, paid-services that are directly targeted at the hard-core fan might make sense. That’s why things like online “fantasy” sports games are doing fairly well. They’re not cutting off new fans from the game itself, they’re providing a useful service (not content) that connects people to each other, and they’re building off the popularity of the “free” sport.

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