Sunday, September 07, 2003

Shirky on Micropayments

Clay Shirky has another good piece on why micropayments will not work for online content. His basic argument (which he has made before) is that even if monetary transaction costs are low, micropayments impose significant mental transaction costs which make them not worth the bother. And even if micropayments dissuade only a few potential readers, since most artists can realistically hope for fame over fortune, they will be better off just offering their work for free.

Largely I agree with Shirky, although I wish he had also discussed ringtone sales in Europe and the Apple iTunes music store, both of which have had success with a micropayment scheme. This is why I support the RIAA's attempt to implement DRM schemes -- only when "big 5" content becomes hard to get will small artists be able to complete on price. This is also why I oppose mandatory licensing schemes, such as the broadband tax proposed in Canada, which prevent this competition from appearing.

I start work at IBM tomorrow and will be in Virginia all week for orientation. Blogging may be light.

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