Have Micropayments Succeeded Long After They Were Dead And Buried?
from the let's-not-rush-to-judgment dept
In the wake of yet another highly touted “micropayment” startup going away, the NY Times is challenging the notion that micropayments will never succeed, specifically pointing to things like iTunes, AdSense and iStockPhoto as examples to the contrary. The article, not surprisingly, references Clay Shirky’s explanation for why micropayments don’t work, and then suggests they do. There are just a few problems with the argument however. First of all, AdSense isn’t about micropayments, no matter how hard the article tries to stretch the definition. Then, neither iTunes nor iStockPhoto are true micropayments in the classic sense of what we were promised (fractions of cents, and so forth). Rather, both are standard normal “payments.” There’s nothing particularly micro about either (again, unless you stretch the definition). Also, in both cases, the services provided better overall service than alternatives. There was a lot of additional value in using those services, which is what helped them find initial success. However, there are still plenty of folks who find it easier to not deal with the mental transaction costs and the additional burdens provided by things like Apple’s DRM and prefer to go free. It remains to be seen if these small (not micro) transaction offerings really do have long-term staying power. As new models evolve — especially in the music space — things like iTunes may not be quite as dominant as some believe.