Micropayments will fail. Four years ago, Clay Shirky wrote about
micropayments
http://www.openp2p.com/pub/a/p2p/2000/12/19/micropayments.html
which could
... reward creators of text, graphics, music or video without the
overhead of publishing middlemen or the necessity to charge high
prices.
However, as Shirky pointed out
... users want predictable and simple pricing. Micropayments,
meanwhile, waste the users' mental effort in order to conserve
cheap resources, by creating many tiny, unpredictable
transactions.
That is the problem with micropayments.
There is a minimum mental transaction cost ....
Put another way,
Beneath a certain price, goods or services become harder to value,
not easier, because the X [payment] for Y [good] comparison
becomes more confusing, not less. Users have no trouble deciding
whether a $1 newspaper is worthwhile - did it interest you, did it
keep you from getting bored, did reading it let you sound up to
date - but how could you decide whether each part of the newspaper
is worth a penny?
Was each of 100 individual stories in the newspaper worth a penny,
even though you didn't read all of them? Was each of the 25
stories you read worth 4 cents apiece? If you read a story
halfway through, was it worth half what a full story was worth?
And so on.
When you disaggregate a newspaper, it becomes harder to value, not
easier. By accepting that different people will find different
things interesting, and by rolling all of those things together, a
newspaper achieves what micropayments cannot: clarity in pricing.
As for solutions,
... the real world abounds with items of vanishingly small value: a
single stick of gum, a single newspaper article, a single day's
rent. There are three principal solutions to this problem offline -
aggregation, subscription, and subsidy - that are used individually or
in combination. ....
In addition, as Shirky says in
http://shirky.com/writings/fame_vs_fortune.html
for information goods, like writings, some people are
... more interested in attention than income ... [for such people]
free makes sense. ... as the drunks say, you can't fall off the
floor. Anyone offering content free gains an advantage that can't
be beaten, only matched, because the competitive answer to free --
"I'll pay you to read my weblog!" -- is unsupportable over the
long haul.
Free content is thus what biologists call an evolutionarily stable
strategy. ....
--
Robert J. Chassell
[EMAIL PROTECTED] GnuPG Key ID: 004B4AC8
http://www.rattlesnake.com http://www.teak.cc
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