Main Page | See live article | Alphabetical index

Micropayment

Micropayments are a proposed means for generating revenue while providing online content. In the early days of the World Wide Web, content would usually be made available for free by organisations such as universities.

With phenomenal growth of the Internet people soon began to seek various means of earning money from content. Advertising is one such form of revenue. Content would be offered for free, with accompanying ads or links to sponsor sites. Other content providers have also experimented with subscriptions, where people would pay for access to content for some period of time. A third form of revenue comes in the form of donations solicited by the content provider.

Micropayments present a relatively recent innovation in the online revenue stream. The basis of micropayments would be to maintain and take advantage of the very high volume of viewers by offering content for a very low price. For example, a webcomic author would make his online comic book available for $0.25 (USD). Other variations on the idea propose charging fractions of cents (that is smaller than the smallest possible amount of hard currency) for equally fractional amounts of contents, for example, a tenth of a cent per single web page in an online magazine.

Table of contents
1 Supporters
2 Criticism
3 External links
4 Criticism
5 Counterarguments
6 Implementations

Supporters

Some online artists are strongly in favour of micropayments, as they offer them a means of recuperating the cost of online publishing, and if they are sufficiently popular, of making a profit. Currently, successful artists are punished by their popularity because this popularity requires them to pay for increasingly large amounts of bandwidth. The argument by artists in favour of micropayments is firstly that such schemes would free them from sponsorship and advertising, which allows more independence for their art; and secondly that the possibility of earning a living through their work would allow them to produce more and higher quality work.

Criticism

Detractors of micropayment strategies generally argue that micropayments would cause too much inconvenience for users of content. They invoke a "mental transaction cost" argument: each price, no matter how small, carries a burden of deciding if the content is worth that price; accumulated over a large amount of content, this burden would pose an extreme inconvenience to the user.

External links

Implementation

  1. W3C Micropayment Working Group

The Micropayment Debate

  1. The Case for Micropayment - Jakob Nielsen
  2. The Case against micropayments - Clay Shirky
  3. Misunderstanding Micropayments - Scott McCloud

Providers

  1. BitPass
  2. Peppercoin