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Why do so many micropayment systems fail?

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app103:
Here is another idea in line with microdonations, but not quite what others have often thought of it as being like: http://www.editorandpublisher.com/eandp/columns/stopthepresses_display.jsp?vnu_content_id=1003940234

This one could actually work.

mouser:
app, i think the approach is a smart one.

i've actually suggested the same basic idea for music sites.

the idea can be boiled down to this central idea:

1. Users pay a monthly subscription price, and then have access to all conent.
2. The system then keeps track of what actual content they view.
3. The system then divides up their monthly subscription poportionately to the authors of the content the user viewed.

The site mentioned in the article (Kachingle) extends this idea to distributed sites by letting site authors put a medalion on their site that users can click to mark that site as one that the user wishes to have their funds contributed to.  (They also let the user decide how much to put in per month, unlike a fixed monthly subscription fee.

I think it makes a huge amount of sense -- it makes it really easy for the user, which makes all the difference.

40hz:
It might be useful to look at why subscription systems seem to work where micropayment systems don't.

First, a little theory...

Disneyworld/Epcot is a very popular vacation spot in the US. It is not cheap to go to, but it experiences some of the best bookings of any "family vacation" offering. One of the key factors that makes this happen is Disney's deliberate policy of "divorcing pleasure from pain" whenever possible.

Here's how it works:

Thanks to some clever marketing and discount incentives, most Disney vacations get booked (and paid for) months in advance. By the time the family shows up in Orlando FL (usually after school gets out) the pain of shelling out a few thousand dollars for the trip has receded into the background of Mom and Dad's psyche. And in the meantime, the anticipation of a 'dream vacation' has continued to build.

So the concept of 'expense' has been effectively removed from the family's experience of Disneyworld. All the family remembers is how much fun they had, thereby minimizing any second thoughts or "buyer's remorse."

Subscriptions (even though they may be more expensive) divorce the pain from the pleasure. Micropayments (no matter how small) keep shoving it in your face.

Add in Mouser's observation about the inconvenience of using micropayments, and it's small wonder (to me anyway) that they're not popular enough to be workable..


Just my :two:
 ;)

BTW: the subscription/divy-up system is how ASCAP and BMI handle music royalties for many web sites.

mouser:
that is a really excellent point about "divorcing pleasure from pain" -- that has to be a central element of any viable system like this.

netflix is another example of how appealing and how much people love the idea of being able to decide how much they want to spend for a subscription, and then not have to worry about how much they use, view, etc.

40hz:
netflix is another example of how appealing and how much people love the idea of being able to decide how much they want to spend for a subscription, and then not have to worry about how much they use, view, etc.
-mouser (February 14, 2009, 03:06 PM)
--- End quote ---

We subscribed to Netflix :-* for exactly that reason.

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