Last Updated May 21, 2009 8:25 PM EDT
The problem, in my view, is not that people will be offended if you ask them to pony up a few cents--the issue is that making payments online is still a hassle. If you are like me, you make a handful of purchases through third party payment systems like PayPal each year. Whether I am buying a book or paying a vendor, the system has been safe and the transactions have been quick. But since I only make payments occasionally, it is a pain to dig through my email accounts and find my old user names and passwords. And getting people to fill out a new credit card form for a few cents just won't happen.
Yet when paying is as easy as typing a code into your a cell phone, Americans have no problem making micropayments. Last night, over 100 million micropayments were made to FOX as text "votes" for 'American Idol.' At about a buck a pop, FOX is probably pulling in more money per text "vote" than your metropolitan daily gets on the newsstand.
Still, most news content is not worth paying for and any successful micropayment system won't return the news industry to its former level of profitability. Of course, most of us would never pay for a "news" story on the results of 'American Idol,' for example. However, as the Economist has noted, "people's willingness to pay for a story is inversely correlated with the size of its potential audience." Hardcore sports fans will pay to access ESPN.com's insider features and financial analysts will pay to get accurate industry reports from the Journal.
Your time is money. When faced with the choice between the exact report you want, which costs five cents and the time to make a text (or some similar, easy micropayment option), or taking five minutes to dig around online for an inferior knock-off, which would you choose?
Image by Flickr user "nayrb7," CC 2.0.