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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.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    aReader(), Nov 17th, 2003 @ 12:48pm

    No Subject Given

    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 Mike, may be eBegging! Beggars may make a hell lot of money!

    reply to this | link to this | view in thread ]

  2. identicon
    ne0phyt3, Nov 17th, 2003 @ 1:59pm

    The quality of the content has to speak for itself

    Consumer Reports and Janes are the only two organizations I can think of with enough meat on their bones to get people to pay. But the keys to getting subscribers to pay are
  3. desirability -Content that is timely or in constant need. In short, stuff that affects what we do or decisions we have to make.
  4. trust - the information they are getting is reliable, which means that the research must be of a very high quality - that takes a lot of $ up front which tends to work against the micropayment model working for smaller organizations.
  5. apolitical or at least truthful - the sources can't have any axes to grind.
  6. education - the people who drive the market have to have some advance understanding of the value of the content they are purchasing.

    IMHO it seems to me that something is missing from this picture. There has to be a way for smaller organizations to facilitate the exchange of content in a way that guarantees its quality and is beneficial to educated buyers and sophisticated traders alike.

reply to this | link to this | view in thread ]

  • identicon
    Ron Helwig, Nov 17th, 2003 @ 2:05pm


    They aren't talking about micropayments, they're talking about minipayments!
    Micropayments are less than a penny, and they might actually have a chance of making money.
    Minipayments are between a dollar and a penny and they have very little chance of making any money since they are far too big to be worth one-time content viewing.
    Let's get our nomenclature right.

    reply to this | link to this | view in thread ]

  • identicon
    Director Mitch, Nov 17th, 2003 @ 4:51pm

    Re: Micropayments

    > They talk about how a large number of little< br>> transactions adds up to a large number

    This all reminds me of the scheme in "Office Space" (and all the other movies they referenced) about skimming fractions of a cent off all those bank rounding transactions and putting them in your account to take out at a later date...

    reply to this | link to this | view in thread ]

  • identicon
    Bobowzki, Dec 14th, 2003 @ 7:07am

    There are e-beggers...

    reply to this | link to this | view in thread ]

  • identicon
    HalfTwitch, Apr 17th, 2007 @ 9:51am

    $3.95 a month?

    would the all to common $3.95 a month for access to up to three sites with full access a tried and true example of micropayments?

    reply to this | link to this | view in thread ]

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