Micropayments For News Represent A Huge Opportunity... For The Smart News Org That Avoids Them

from the that's-how-you-fail dept

We just went through how dumb it was for newspaper folks to keep on insisting that they need to start charging, so I almost skipped this one, but a bunch of people have been submitting Walter Isaacson's laughable plan to save newspapers: micropayments! I thought we'd done away with that last month, but Isaacson gets attention, so let's end this once and for all, and explain why micropayments for news won't work. I can go through all the basic arguments about mental transaction costs and the cost side of managing micropayments: but there's an even simpler answer.

If most newspapers switch to micropayments, someone much smarter when it comes to business than Isaacson will create a new news site that doesn't charge. And they'll make it high quality, and they'll be able to make money through other means. Hell, it will be easier because all the fools who follow Isaacson and others in demanding payment will take all the competition out of the market.

These old journalists may know something about the inverted pyramid and how to put a news story together, but they might benefit from an economics class on how competition works when it comes to pricing. In the meantime, you just know there's a smart business guy out there, just drooling over the prospect of these old line media companies destroying their own businesses.

Oh, and one final point: just as in the article we saw yesterday, note that nowhere does Isaacson talk about giving people a reason to pay for the content. He just assumes they will. I'm sure the buggy whip makers expected people to keep spending money on buggy whips as well.

Filed Under: micropayments, news, newspapers, walter isaacson

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  1. icon
    Peet McKimmie (profile), 6 Feb 2009 @ 9:40am


    To get the added value content, of course!

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