Post #2 – Micro-payments

I am relentless in my belief that micro-payments need to play an important role in the future of online media. While I am not alone in this belief, “everyone knows” they’ve been tried and haven’t worked.

Tell that to the cell phone companies, particularly Docomo in Japan. When you use your smartphone to consume mobile content, or just make a phone call to get some highly personalized custom content (i.e. conversation), you are using a very effective and accepted micropayment system.

Your are either paying a bulk monthly amount for a certain number of minutes or maybe an unlimited plan. You may go over your monthly limit for data (most unlimited plans are going away) and you will start paying incremental fees for your content that month. Generally the content owner isn’t getting anything unless they are part of a service offered by your carrier, but the phone company is always making money and you probably never even think about it because the incremental cost is so low.

The same would be true if there were an underlying account charging you for each page you access or for each video you watch (or a per minute charge for video). For prices as low as a fraction of a cent, you are unlikely to avoid content you really want. You wouldn’t really have to think about it as long as the price was reasonable.

The problem of course is that there’s no way currently for content owners to put a micro price tag on their content and get paid. “Everybody knows” that micropayments don’t work. The reason is that a start up can’t get the critical mass. Only a handful of companies could implement such as system, but if they did, they would reap huge rewards.

The big ISP’s, like Comcast and Verizon, could do it, particularly if they co-operated to jointly exchange of customers. Amazon could do it. Google might be able to. Yahoo! has a shot at it, which could revive their growth hopes if successful. Netflix has a chance for a video-only version which could expand into other content.

There is a still a lot of high value content that is locked up because it’s too valuable to give away with only advertising banner support. If there were a viable micropayment system, a lot of owners would switch some portion of their content to it.

There are millions of dollars in fractions of a cent waiting for someone.

Post #1 – Introduction

It’s time to reinvent media.

Digital and megachannel cable distribution, along with increasingly savvy hardware,  are making a shambles of traditional media. We’re reaping the downside of the digital revolution while anxiously awaiting the long promised upside.

The average quality of content in virtually all media continues to decline as fragmentation chews up the economic base which supports it. While there are bright spots – like HBO and Showtime – there is nothing to suggest that content consumers are better off now then they were twenty years ago and a lot to prove they’re not

In the interest of increasing the amount of high quality content in every medium, the economic base of all need to be reinvented. For those media where that is not done or not possible, they may disappear.

This blog will concentrate on topics related to the development of new revenue models and the abandonment of hopelessly unsalvageable media.