Message-ID: <19981218052902.AAA4998@LOCALNAME> Date: Fri, 18 Dec 1998 01:27:16 -0400 From: Kerry Miller <mailto:kerryo@NS.SYMPATICO.CA> Subject: One a penny, two a penny To: mailto:DEVEL-L@AMERICAN.EDU
Bob,
I thought you might be interested in this information.
kerry
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http://www.useit.com/alertbox/981213.html
Jakob Nielsen's Alertbox for December 13, 1998:
Plan your long-term Internet strategy on making money from micropayments: it
will happen sooner or later and anybody who relies on advertising revenues will
die as click-through rates hit 0.1% in 2001
=============
The article is linked to an earlier one ( 25 Jan 98) where he speculates:
Long-distance telephone calls and electricity are both metered services. Many
people do feel a tension while they are on the phone, at least while making an
international or other expensive call. At the same time, very few people worry
about powering a lightbulb, even though doing so costs a few cents per hour.
Electricity charges mainly serve to make people turn off the lights when they
go to bed. The difference is clearly in the level of pricing:
less than a cent per minute and people use as much as they need
(electricity)
10 cents per minute, and people ration their usage a little (long distance
phone calls)
40 cents per minute, and people ration their usage a lot (international
calls)
On the Web, users should not worry about a cent per page. If a page is not
worth a cent, then you should not download it in the first place. Even as the
Web grows in importance in the future, most people will probably access less
than 100 non-free pages per day (in June 1998, heavy users visited an average
of 46 pages per day). Most users will have $10-$30 in monthly service charges
for Web content.
[A page of *text*, not graphics, is about 5 k. Most email is not even that.]
During working hours, it is easy to calculate the value of a user's time. If we
assume that various overhead costs are about the same as a person's salary,
then somebody making $35,000 per year costs their company a cent per second. In
other words, every time you access a Web page, it costs your company ten cents
just for having you sit and wait while it downloads (assuming that the page
design obeys the 10-second response time limit). Add time to actually read the
page, and we are looking at a cost of 25 cents to a dollar every time an
employee accesses a Web page (with proportionally larger costs for highly-paid
staff). In this context, paying a cent (or a few cents) for the content is
nothing if it ensures higher-quality pages.
Simply waiting for a typical banner ad to download costs about 3 cents in lost
employee time, so that could be a possible value of ad-free pages. Of course,
much Web access occurs during off-duty hours where people's time is harder to
value. But if people value their free time at a third of their working time,
then even leisure browsers should be willing to pay a cent to
avoid an ad.
========
and a 'sidebar':
http://www.useit.com/alertbox/paymentinterfaces.html
Once Web information is treated as an economic good, it will become necessary
to have explicit user interface representations for the value and the charges
that are associated with Web pages and Web links. Users will be very upset if
they see charges on their monthly statement that they didn't know they had
incurred.
On the other hand, usability dictates simplicity in the user interface and a
general desire to protect users from information overload. To reconcile these
conflicting demands, I expect that the payment user interface will consist of
multiple representations of information value, depending on the magnitude of
that value. In general, the notion of richer attribute representations will be
an important part of the next-generation content-oriented user interfaces that
will replace the Macintosh-derived designs in about five years.
[...]
=============
Cheers,
kerry