Clay Shirky on micropayments for online news

I am very specifically not enjoying the current wave of handwringing over whether or not some version of micropayments, online subscription, or paywalls could work for typical U.S. news organizations.

But here’s Clay Shirky:

“The essential thing to understand about small payments is that users don’t like being nickel-and-dimed. We have the phrase ‘nickel-and-dimed’ because this dislike is both general and strong. The result is that small payment systems don’t survive contact with online markets, because we express our hatred of small payments by switching to alternatives, whether supported by subscription or subsidy.”

Read the whole thing.

4 Replies to “Clay Shirky on micropayments for online news”

  1. Amen. I think Shirky’s had the best argument against micropayments in this latest round of discussion(besides the people who point out it just didn’t work). The point is, people don’t like being nickel and dimed, so they prefer subscription fees. But on the web, subscription fees generally don’t work either.

  2. I think Shirky is drawing a false conclusion – people are not turning their backs on micropayments, but on the way they are executed. Services like iTunes and Amazon are having huge success with micropayments because they are smooth and well executed – the user can pay a few dollars with a few clicks. The point with micropayments is that some consumers don’t want to pay a subscription for a service they rarely use – this is why it works offline for everything from newspapers to public transportation. Why would this not be the case online? The problem is that no one in the media industry has managed to pair a visionary business strategy with a consumer friendly technological solution (this was also the case with the music industry which is why a computer company has now taken over this market).

    1. Hi Bjarke:

      I think there’s a fundamental difference between what iTunes and Amazon offer — tangible products in the form of mp3 or other files — and what news organizations (generally) offer: information.

      Am I willing to pay for a music file? Maybe. (Not that often, to be honest.)

      Am I willing to pay for information? Almost never.

      A third question, however, gains a little ground:

      Am I willing to donate to a news organization whose information product I enjoy and whose ideals or style falls somewhere in line near my own? Yes.

      And that’s why, while I would never pay to subscribe to a newspaper in print or online, while I would never pay to access information, I’ve been more than happy to give to public radio stations, in the towns I’ve lived in and in other cities where the shows I enjoy are produced.

      Those donations seem more like macropayments. I’m not subscribing to anything, I’m not hitting a tip jar after reading one story, and I’m certainly not dropping a dime in the box every time I want information; I’m giving a chunk of money because I like the organization — call it a brand if you want.

      I’m making a donation because the brand has won me over. Not because I want information.

  3. Yeah, I definitely agree that there is no reason to pay for pure factual information. This has become a commodity that the media can no longer monopolize. But I actually think I would be willing to pay for unique, refined experiences that made me think about life…like great documentaries and art pieces. To stay in the music analogy: This past year I bought two vinyl box sets – one from Tom Waits and one from Bob Dylan. They are unique art pieces with liner notes, photos etc – this is the kind of think I want to pay for (I agree that Amazon and iTunes will slowly get replaced by things like LastFM and Pandora). However I still think a great micropayment system for this “refined” content is needed.

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