This article dates from March 1999. I guess we still haven’t really cracked micro-transactions, and the closing comment on set-top-boxes now seems rather naive, but I still maintain that the central tenet – that people don’t pay for content but rather for time and convenience – remains valid.
It seems to me that, at present, e-commerce is being thought of as little more than a new channel for traditional business models. We are still, for the most part, selling physical goods that have to be shipped around in the real world, even if the financial transactions take place in cyberspace. This is great for postal services and parcel carriers, who will probably be the ones making most of the profit from e-commerce for the foreseeable future.
What interests me, though, is the potential for a purely digital market – one where everything remains in cyberspace. No inventory, no stock control, no warehousing, no shipping costs. This is a market where time – or the saving of it – would be the commodity.
The internet is a great place to look for information. Everything you could want to know is out there – somewhere. But it takes time to find, and that’s where there’s an opportunity.
The internet has traditionally been a free and anarchic medium (though whether Joe Public surfing courtesy of Sky Digital will know or care is another matter). Content has been published, re-published, shared and disseminated. Internet users don’t like to pay for their content – if one site were to charge for something, another could make it available for free. Forget copyright – it’s practically impossible to enforce on-line.
But information – i.e. content that is meaningful to a particular enquiry – is a different matter. Increasingly we want our information instantly. We know it’s freely available but we don’t have time to look for it. Our time is too valuable.
Imagine knowing that you could go to a particular site and get what you were looking for within a matter of seconds. You could find it elsewhere but it would take longer. Would you pay to save time? I suspect a lot of busy professionals would. Perhaps only a little – charge too much and people would rather surf. But what if it were just a few pennies?
To make this model work, you would need to have in-demand information; a solid brand reputation – built on quality, expertise and editorial selection – so as to be the first port of call; your service must consistently deliver. But if you could achieve that, you would have a global audience, minimal overheads and – imagine several million visitors a week each paying a few pence – healthy profits.
Of course the figures aren’t as large as for, say, an Amazon.com – we’re probably talking revenues in the low millions at most. Perhaps this won’t be sufficiently attractive to make such a venture worthwhile. Perhaps it would simply take too long to build the brand (though there are plenty of existing brands who could make use of this). On the other hand, a single person could potentially maintain a business generating hundreds of thousands of pounds in profit…
The biggest obstacle to this model, though, is that it relies on micro-cash transactions – something that doesn’t seem to have fared too well after all the hype of a few years ago. It may be about to have its day, however, courtesy of the smart-card technology being built into set-top boxes.