Micropayments 2.0 gone with Peppercoin Sale
paidContent, a site digital content types like to follow, just posted news about Peppercoin’s acquisition by Chockstone. This signifies a sad moment, as micropayments 2.0 has appeared to have run it’s course. You’ll recall my earlier comments on BitPass and it’s recent acquisition by Digital River.
Both companies were at the forefront of the new micropayments revolution, with BitPass based on pre-payment and Peppercoin based on post-payment. When both launched in the 2002/2003 time-frame, things were different: advertising was down and people were in the throws of “new subscription models” designed to insure web-sites could support themselves. The two companies offered hopes for new revenue models and enabled publishers, musicians, and artists to charge low fees for their works, with both systems even allowing users to pay as low as $0.10 for digital content. This was the real long tail starting to take hold. As startups, both were inundated by relatively unknown independents who saw potential in earning directly from the people.
Another site, iTunes also launched about the same time, with branded music at $0.99. The iTunes service was backed by a multi-billion dollar corporation and some of the best marketing in any industry. Both BitPass and Peppercoin felt validated by iTunes success, and were encouraged by the hopes that other media companies would soon follow suit. Instead, other media companies were fixated on DRM, wanted to be the anti-iTunes, and insisted that users didn’t want what they were buying at iTunes, but instead wanted a subscription.
Data from BitPass and Peppercoin showed that people just wanted what they wanted– and they wanted to choose. They wanted to buy “by the drink”, in bundles or six-packs, and sometimes they wanted to buy an “all you can eat” plan. The real answer was to let consumer choose what they want and give it to them. Sounds like marketing 101, right? Consumers we met all saw DRM standards and subscriptions as a religious war for the companies with no real basis in serving consumers.
Now that DRM is starting to fall away as seen in the EMI – Apple deal, it may be time to revisit the market and reintroduce micropayments 3.0? Any takers?
