6a00d83452242969e20133ecc5c49f970b-120wi.jpgI thought the micropayment model was dead. Back in the ’90’s and early 2000’s it was simply too much of a hassle to pull out my credit card for any one- or two-dollar transactions. Then came iTunes.

Now I’m amazed how quickly I’ll make a 99-cent purchase. Part of the reason is the seamless way iTunes is integrated into the overall iPhone/iPad ecosystem. Apple has created a model where payment is too temptingly simple. Amazon may have patented one-click payment but Apple is perfecting it. A quick check of my recent AMEX statement shows I paid Apple more last month (for mostly sub-$5, including a large number of 99-cent, transactions!) than I paid Amazon. That wasn’t the case 6 months ago.

There’s still a huge difference between grabbing a free app and paying for one, even if it’s only 99 cents. I’m still pretty stingy here and I want to feel confident I wasn’t snookered into paying for something that’s not even worth a dollar.

The problem in the book publishing world is that we haven’t found a good content model for the sub-$5 purchase. Customers don’t want to buy chapters, so don’t kid yourself about that model. And sure, you can do the quick-and-dirty print-to-e conversion and sell it for a fraction of the print price, but that’s not much of a future.

We need to create more product entry points that appeal to the masses with low initial prices that offer a great value proposition as well as upsell opportunities for additional irresistible content and/or services.

What can we learn from other experiments in the app world?:

* First, don’t assume the quick-and-dirty p-to-e conversion model is more viable just because the iPad offers a large, full-color screen. I still refuse to pay $4.99 for a single iPad issue of Time, for example. (You’d think the magazine folks would realize that’s no way to attract new customers. What about the free trial subscription to let me see what’s special and get me hooked?)
* Second, and perhaps most importantly, think about rich content, not just quick-and-dirty conversions (see my earlier highly relevant posts here and here). A chemistry textbook publisher creates this while a visionary creates this. The former is a yawner while the latter, even as a fairly high-priced iPad app lures me in because it’s so tempting to explore and discover with it. Question: How many customers would describe your e-products with words like “tempting”, “explore” or “discover”?
* Third, think about subscriptions, not just one-time payments.
* Fourth, think about selling the network, not just an individual product.
* And finally, don’t ignore the advertising and sponsorship worlds. Yes, I know many people say they won’t stand for in-book advertising. That’s fine. Offer two different versions, including the higher-priced one for those folks who won’t tolerate the ads.

Editor’s Note: The above is reprinted, with permission, from Joe Wikert’s Publishing 2020 Blog. PB


  1. Sign of the times: when $1 is considered a ‘micro-payment.’

    One big point about those 99-cent purchases is how much the banks take in credit card fees – something like 25 cents.

    Subscriptions sound like a good alternative, but there’s also that ‘points’ system Microsoft tried when they introduced the original Zune. You can buy ‘points’ at varying dollar amounts, then use the ‘points’ in your account to purchase books, articles, chapters, magazines. A point system would allow prices to come down as more points are bought at once (which would make up for the sliding credit card fees). For example, $1 might get you 1 point, and $10 might get you 12 points.

    The point system would also allow sales to go on with changing the points a given chapter or book would cost.

    But the downside to a point system is how it can be gamed. Indeed, that original Microsoft Zune points system was confusing, seemingly intentionally so, to make buyers believe their songs were costing less in real dollars than they actually were. Points become something like tickets at amusement parks; they aren’t ‘real money’ and seem like it’s easier to spend them.

    — asotir

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