Wednesday, July 20, 2005

Micropayments

Call me crazy, but the reason I turn off the lights when I go to sleep is because it's hard to sleep with lights on!

In Jakob Nielsen's discussion of micropayments he makes the grand statement that people turn off their lights at night due to energy costs....A statement that is but one component of his entire argument that micropayments are the wave of the future.

Micropayments, apparently, are (as the label suggests) micro....payments. These payments will be made by visitors to the internet and will be as low as several cents per visit, etc. His concept is similar to that of other metered utilities, like water and electricity....hence the turning the light out comment. Basically, web users will be charged micro "fees" as they surf, thus incurring a monthly fee....probably around $30 or so, according to Nielsen's article. Due to this fee, visitors will be freed of annoying and burdensome advertising.

I'm still not convinced by Nielsen's initial writings of the benefits of micropayments. I'm pretty confident that people value free things over less advertising and annoying content.

Nielsen makes the case (if I'm reading his analysis right) that microfees are another quality control mechanism for the internet, but isn't that what demand (or the lack of it) does for quality in a free market arena? If people believe that something - like a product, or a website - is not good, they won't buy it or visit the site. The consequential lack of demand will cause a change to take place (hopefully) with the way the site or the product is produced. If such a positive change doesn't take place, then the product will not survive.

Upon initial inspection, I have some doubts about micropayments, but further research is warranted of course....to be continued.

3 Comments:

At 4:00 PM, DesiPolitico said...

Interesting analysis of micropayments I hadn't thought of some of the points you had discussed. It's true that demand (the increase of) forces a product to be better and also ensures it's survival in the business world.

 
At 8:39 PM, carolina girl said...

I like your perspective on this topic. I would certainly rather have free access and deal with advertising as a consequence.

 
At 11:35 AM, Jorge said...

You really grasp the concept of this article well. And it's worth noting that he made this argument in 1998 when we still used dial-up and the internet was flooded with pop-up and banner ads. I think broadband really shot down micropayments, in addition to the fact that people realized that they didn't need to pay for internet content like AOL.

 

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