From Clay Shirky:
With continued turmoil in the advertising market, people who work at newspapers and magazines are wondering if micropayments will save them, with recent speculation in this direction by David Sarno of the LA Times, David Carr of the NY Times, and Walter Isaacson in Time magazine. Unfortunately for the optimists, micropayments — small payments made by readers for individual articles or other pieces of a la carte content — won’t work for online journalism.
To understand why not, there are two key pieces of background.
First, the label micropayments no longer makes any sense. Some of the early proposals for small payment systems did indeed imagine digital bookkeeping and billing for amounts as small as a thousandth of a cent; this was what made such payments “micro”. Current proposals, however, imagine pricing digital content in the range of a dime to a dollar. These aren’t micro-anything, they are just ordinary but small payments, no magic anywhere.
The essential thing to understand about small payments is that users don’t like being nickel-and-dimed. We have the phrase ‘nickel-and-dimed’ because this dislike is both general and strong. The result is that small payment systems don’t survive contact with online markets, because we express our hatred of small payments by switching to alternatives, whether supported by subscription or subsidy.
The other key piece of background isn’t about small payments themselves, but about the conversation. Such systems solve no problem the user has, and offer no service we want. [more...]
