Micropayments have worked for companies like iTunes and even Amazon.com for songs and television episodes. But could they be the solution to the newspaper industry’s pending demise?
The why micropayments don’t work
Consumers “expect to pay for music and movies, but not so much for the printed word,” said [Mercator Advisory Group analyst] George Peabody. . . For sellers of the lowest-priced content — anything under 75 cents — micropayments have been made irrelevant by the easy availability of online advertising, Mr. Peabody said. Programs like AdSense from Google, which allows even the smallest Web publishers to have relevant ads placed on their sites, make micropayments unnecessary. The program pays Web publishers what are often very small amounts each time a reader clicks on an ad. . . .
However, two years of experience and a downturn in the economy have shown that advertising doesn’t always work. paidContent says Financial Times execs firmly believe that micropayments can work for editorial content: “There are a lot of questions around pricing. We would look to test it around different price points.” [MD Rob] Grimshaw admits “there are differences between music and editorial content” but he’s convinced that people will pay, so long as they don’t have to fill out “three pages of forms” every time they want to know what what’s happening in petrochemicals. . . . FT CEO John Ridding—currently on a PR offensive to boost the case for charging for news—adds his weight to idea in an Comments
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