Every single month we see yet another person claiming that micro-payments will 'solve' things for the media. And the argument we often hear is this:
Only 4-5% are willing to buy a subscription, whereas (in studies) 30-45% say they are willing to use micro-payments.
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Only 4-5% are willing to buy a subscription, whereas (in studies) 30-45% say they are willing to use micro-payments.
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This is an invalid comparison for a lot of reasons, but let me just name a few.
First of all, it's not 5% vs. 45% ... those are not equals.
In my country, for instance, a subscription for a newspaper is $40/month (digital only) ... or $480/year.
First of all, it's not 5% vs. 45% ... those are not equals.
In my country, for instance, a subscription for a newspaper is $40/month (digital only) ... or $480/year.
Let's say that the micro-payment is set at $0.15, you would need to get people to use micropayments just for that one newspaper 3,200 times per year.
That's just not happening.
30%-45% might say they are willing to use micro-payments a few times, but not 3,200 times per site.
That's just not happening.
30%-45% might say they are willing to use micro-payments a few times, but not 3,200 times per site.
The second problem is friction. While every micro-payment startup claims that it's frictionless because people just have to click a button, this is not true.
As a reader, you still have to create an account. In many cases, you have to 'add funds' to your wallet...
As a reader, you still have to create an account. In many cases, you have to 'add funds' to your wallet...
...and then for each article, you are actually stopped from reading at each and every visit because you have to click that damn button all the time to read anything.
Let me tell you, clicking buttons are seriously annoying the 100th time you have to do that.
Let me tell you, clicking buttons are seriously annoying the 100th time you have to do that.
Then, we have the problem of loyalty.
When focus on getting people to subscribe, you are focusing on the long term. You are asking your readers to commit to your journalism. This means we focus on loyalty and value.
...
When focus on getting people to subscribe, you are focusing on the long term. You are asking your readers to commit to your journalism. This means we focus on loyalty and value.
...
For micro-payments, however, we are optimizing for one-time hits. It's like optimizing for a one-night stand. In other words, publishers who focus on micro-payments often find themselves pushed towards 'in the moment' throwaway news.
Finally, we have the problem of scale. Micro-payments only work (theoretically) if you have a lot of volumes. So a lot of articles across a lot of readers.
But most magazines and especially niche sites don't have that.
I just not a good model.
But most magazines and especially niche sites don't have that.
I just not a good model.
