|
|
|
A Closer Look At Micropayments
uring the early days of to make money is by charging
the Internet, most of the subscriptions, wherein consumers
contents found online are are required to pay a certain
provided for free, either by amount in exchange for access to
different institutions or the content for a certain period
universities. As the years go by, of time. The downside to the
the Internet has experienced subscription model is that it
various innovations. One major only offers one choice to the
factor in the evolution of the consumer - either they do not pay
Internet is the consumers' the subscription and thus get no
ability to purchase, sell and content or pay a substantial fee
advertise products and services, to get all the content.
a concept that is more commonly Oftentimes, this kind of choice
referred to as "e-Commerce". led the consumers to move on to
sites that offer content for
As the popularity of the Internet free. Meanwhile, the third form
continuously grows, it is only of revenue is through donations
natural for the content providers that are solicited by the content
to start looking for different providers themselves.
ways of making money from the
content that they publish online. However, in 1998 a fourth form of
Basically, there are three ways revenue was proposed - the
for users to earn money from micropayment system. The concept
content; one is through of micropayments would not die
advertising. Here, the content is down completely, nor would it
available for free; however it fully come to life. What are
comes with certain ads or links micropayments, exactly?
to their sponsor sites. Micropayment is generally defined
as the means of transferring
Another way for content providers small amounts of money (usually
in pennies, nickel or dimes), order to increase the number of
usually in purchasing digital their consumers.
contents like music, movies,
games and others. However, regardless of all the
benefits that micropayment
Since charging such small amounts systems seem to offer, its
through the customary payment popularity among the consumers
system like credit cards is did not quite catch on for quite
impractical, the micropayment a time. This is mainly due to the
system is a viable option for pressing disadvantages that
those websites that wish to go micropayment detractors are quick
"micro". The main objective of to point out. Most micropayment
micropayments is to target a high system detractors insist that
volume of consumers by offering micropayments would cause
content at a relatively low inconvenience rather than
price. It is also usual for convenience to consumers. How so?
micropayment systems to The most popular argument used is
accumulate several payments and the "mental transaction cost".
then charge it in one regular
payment. What does mental transaction cost
mean? Well, this is where a
Most micropayments advocates consumer stops and thinks twice
firmly believe that the whether the content is actually
micropayment system is the worth the price, regardless of
solution to the free rider how small the price is. This
problem for those sites that are could cut down the number of your
solely dependent on advertising. customer, since more people are
As for websites that are charging likely to opt for free content.
subscription fees, micropayments
will be a viable alternative in The people pushing micropayments
believe that the dollar cost of do not have credit cards.
goods is the thing most
responsible for deflecting So with all these disadvantages,
readers from buying content, and why do we need micropayments?
that a reduction in price to With the growing demand for
micropayment levels will allow ethereal products (like
creators to begin charging for information) in global economies
their work without deflecting and their immediate delivery at a
readers. low cost, the customary payment
methods seemed to be impractical.
Another possible drawback to Since most information found
using micropayment systems is online (Web pages, Web links,
that it requires the consumer to etc.) cost barely a penny, the
use major credit cards. Remember cost of charging in the usual
that Internet consumers are quite payment method would turn out to
diverse in age; therefore, you be more expensive than the actual
cannot assume that all of them product. Thus, micropayment is a
would have credit cards. Since viable alternative.
teenagers are under the legal
age, they do not have credit A lot of content providers agreed
cards. Moreover, even among those that micropayments offer them the
consumers living in highly opportunity to regain the cost of
developed countries, not everyone online publishing, even possibly
has a credit card, and borrowing make money, that is, if they are
someone else's credit card just popular enough. At present,
to read a certain article in the content providers see their
Internet would prove to be a big online popularity as a
inconvenience. Simply put, disadvantage since their
micropayment systems could very popularity requires them to pay
well alienate those consumers who for large amounts of bandwidth.
Another benefit that micropayment
systems offer content providers Although, millions of people find
is the opportunity to be the notion of purchasing $.99
completely free from sponsorship songs at iTunes attractive,
and advertising, which offers Apple's administrators themselves
them more independence. Without admitted that most consumers
advertising the provider could still prefer purchasing larger
concentrate on publishing album packages instead of the per
materials that interests their song purchases. After all,
consumers instead of what Internet users do not purchase
interests their advertisers. content as if they were a piece
of candy. Some micropayment
Micropayment systems are showing solutions even admit that their
signs of recovery recently, what customers are loading less money
with the launching of Apple's into their accounts than what
iTunes $0.99 a-song, the model is they initially expect which means
finally showing some signs of that a considerable barrier still
life. Furthermore, reports on the remains. Now, whether the
state of the paid content market micropayment system will
shows that, content purchases eventually find success this time
below $5 increased 707% in 2002. around or not will still depend
A veritable accomplishment, since on the consumers' behavior, a
it made a seven-fold leap from hurdle that is yet to be crossed.
virtually nothing.
About the Author:
http://www.theinternetone.net
Read more articles by: Danny Wirken
Article Source: www.iSnare.com
|
|
