Fame vs Fortune: Why Micropayments Don't Work
from the exactly dept
I've always believed that micropayment schemes on the internet are doomed to failure due to the basic economics of content - and Clay Shirky has done a great job explaining economically why micropayments will fail. Basically, it makes more sense for most creators of content to get attention, rather than cash, for their content (fame vs fortune, in Shirky's article). As such, charging for content is unsustainable - since it's always going to be competitive with free content. The competitive nature of the "content" market, means that the price always gets pushed down to nothing. Besides, as he points out, with free content, new opportunities are developed, since sites can't connect to each other and build something larger than each individual piece. What he leaves out, though, is the idea that free content is actually quite useful as a promotional item for selling services. That's the important point that many people miss when they dismiss the idea of free content. When market conditions set up things such that one of the resources can no longer be sold, and is free - then it makes sense to figure out ways to leverage what's free. If you have something that the market says you should give away for free, why not use it to your advantage and let it be free promotion? Free content isn't bad for business. Ignoring the economic reality of content is.