Another variation of this is the download of "archived material" -- content
that ranges from 2 weeks to 6 months old.J Each
company sets the limits. Charges are relatively high, currently around $3.00
to $5.00 per article. This is due to the high cost of processing payment by
credit cards, which can seriously compromise profits.
Another workaround is to pre-sell "packages" of archived articles or
special reports. For example, $24.95 could give a customer the right to
download 10 separate documents.J This follows the "magazine subscription
model" which sells a years worth of issues at much cheaper rates
than individual issues.J For the merchant, some of this "discounting" makes
great sense because they can more efficiently sell andJ promote services and
products to repeat customers. Such customers are more valuable to advertisers, too.
Firms Debut Micropayment Plans
Two companies have recently rolled out innovative solutions for delivering and
charging for digital content.
Qpass will sell content from publishers such as The Wall Street Journal
Interactive Edition on a short-term or per-article basis. And incentive
marketer Cybergold will launch a program that lets users purchase digital
content such as MP3 songs, software, and video files.
Both companies have set up micropayment programs to deal with the
challenges of charging small amounts online. Qpass'' system allows users to
register once and then purchase content from various publishers, such as
mutual funds researcher Morningstar and the U.S. Department of Commerce.
Users receive a monthly bill that''s charged to their credit card, and Qpass gets
a small fee for each transaction.
Cybergold has created its own digital economy: Money earned on its site for
viewing ads or trying out products can be redeemed for digital content priced
as low as 25 cents. Users can add money to their account by charging with
their credit cards.
The company, which claims 1.5 million users, will receive transaction fees
from each of its content partners.
CEO Nat Goldhaber said Cybergold is considering licensing its micropayment
technology.
Reprinted from InternetWorld, March 9, 1999.
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This type of pricing is popular with, for example, financial letters
published on line. Many trading services,
especially those which are part of major brokerage houses, provide free
on-line investment research to customers.
But they also provide "silver, gold or platinum" reports for a monthly fee.
They also use incentives to urge the customer to "upgrade" by packaging these
reports together with additional benefits; for example, real time quotes or
"special alerts," such as notices concerning stock splits, dividends, SEC
filings, and insider trading.
Still another variation on this is to provide such services free to
customers who "qualify."J For a financial site or e-trader, this might mean
discounts to those clients who execute more than 30 trades a month.J
A charge of $19.95 per trade thus makes "qualified customers"
those who spend at least $600 a month.JAgain, this a
clever way to sell individual articles/reports by pricing them within a larger
revenue stream and avoding the costs of processing each transaction.
One day, perhaps micropayments and digital cash will become a reality.
Then it will be possible to charge per article or report on a true pay per
view basis.J It is a hard road to pave for single
entrepreneurs or small companies, unless they have something that is
desperately needed by a well capitalized customer base.
Don Sussis is an eCommerce advisor and business consultant. He
frequently writes about business over the internet.
He can be reached at dons@interested.com.
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