The Micropayment Dream Rises from the Ashes

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The Micropayment Dream Rises from the Ashes

September 12, 2005 4:23 PM Posted by mac

A post by Dorian Benkoil at Rebuilding Media reignited my interest in micropayments. I first ran into the micropayment concept years ago, and the idea of paying a small fee for Web content -- an article, a section, an edition, etc. -- seemed to have merit. After all, supermarkets load their check-out counters with all sorts of impulse buys, why couldn't content-based Web sites do something similar? "Awesome idea!" I thought. "Now what?"

Well, now nothing. As this paper points out, in the mid/late '90s, a bunch of companies unveiled micropayment systems: e-cash, e-coin, e-jing, e-bling, etc. None of them took hold. The failure of these systems probably had more to do with the times than the mechanisms. In the mid/late '90s, Web users were still getting used to e-commerce; people weren't ready for a whole new micropayment model. But things are different now (at least I hope they are).

In his Rebuilding Media post, Benkoil raises what I believe is the essential micropayment question: "Why, online, am I forced to pay for a subscription, rather than be allowed to buy a single copy, or even a week's worth, or some other finite amount?"

This question is a paradigm shifter. It takes a real-world action -- buying a single copy of a newspaper or magazine -- and applies it to the Web. And dammit, it makes sense! Why can't I purchase small/custom increments? Theoretically, if a site has a database-driven content management system and a secure shopping mechanism, there's no reason why content couldn't be repackaged and redelivered in bite-sized chunks with bite-sized prices.

A forward-thinking vendor could make some serious noise in this space, especially if they developed an add-on "micropayment" module for blogging software and common content management systems. Just snap it in, get a PayPal account and BLAM! Micropayment!

Of course, the micropayment mechanism is only one side of this coin. The other side -- the one that will ultimately determine the veracity of micropayments -- depends on publishers: We need to create stuff people want to buy. In the blogosphere, pay-to-play (or pay-to-read) is still anathema. But I have to believe there's a dollar figure (or a cents figure) that would work for readers and publishers alike. What about 10 cents for a specific article (a really, really good article with lots of interesting stuff, of course)? Or 10 cents for access to a forum? One-time payments: You buy it once, that's it. You don't have to buy it again.

Clearly, I haven't calculated the costs or figured out the return on investment, but if you assign a dollar figure -- even a miniscule one -- to something that didn't have a dollar figure, then you're talking about pure profit. Multiply 10 cents 1,000 times and you've got $100 -- and that's $100 that wasn't there before.

Thoughts? Disagreements? Let it out below!