What Do Itunes And Porno Have In Common?

The answer is…

They understand the power of a little technology that is becoming ever more popular in cyberspace called…

Micropayments.

The term “Micropayments” refers to the selling of very small quantities of a product for very small fees. We’re talking $2 or $1 for the download of some digital good.

In web 1.0 it was never practical to be able to charge small amounts for small quantities of a good or service because the cumbersome, inflexible nature of payment processors meant your margins were reduced to near null.

These days however, there are new industries putting their hands up every day to take advantage of this phenomenon known as Micropayments; and for good reason!

The guys in the Adult biz were the first to realize how much customers love the micropayment model. I’m sure none of you are involved in that industry but “Video On Demand” (the concept of charging a user a small fee to view one short clip of interest, rather than purchasing a full movie) is a VERY rapidly growing model.

I was first introduced to Micropayments by a friend of mine, James Brown.

He explained to me over a number of dinners in Tokyo how companies like Itunes are now setting online sales records left right and center using this model of, let a user sign up or view your membership for free, then allow them to purchase small individual quantities of your product for tiny fees.

To the user, it never feels like they’re making a large monetary commitment, after all, anyone can afford $2.50 for a song. But after time their small individual spends equal an enormous cash flow for Itunes.

The great thing about micropayment technologies also is that it’s personalization to the maximum, and people LOVE it! You know when you buy an ebook and you know 75% of the content but a single chapter or two made the whole book worth while for you? Don’t you wish as a customer, you could have paid 1 tenth of the cost to JUST be able to read that chapter?

In a roundabout kind of way, that’s what services like Itunes are like. You don’t know whether you want to commit to an artist’s whole album so you choose out only the songs you like instead. Can you see why this is so popular and indeed so profitable?

Anyway, there are numerous ways that this technology could be applied to the internet marketing niche, or ANY niche in fact, and relatively few people are trying it out yet.

James actually wrote a little report on the subject that might interest you, which you should be able to grab for free on his site (link above).

What brought this back to my attention, is a little free script coded by a programmer buddy of mine that gives people like you and I an opportunity to start playing round with this method of marketing right from our wordpress blogs as of today.

It’s called Blog On Steroids (I know… perhaps we didn’t QUITE need any more steroids in internet marketing but oh well…) and is basically a wordpress plugin that will allow you to publish premium content on your blog.

What I mean by premium is content that the user has to pay a small fee to view.

You might write an article on “10 ways to drive traffic to your wordpress blog” as the free article, then offer an upgrade where a user can get the premium content which contains “100 ways to generate traffic” and charge $1.50 to read it (just as an oversimplified example).

The plugin allows you to set the free content and the premium content, nominate how much you wish to charge, what permissions the user has and integrates with your payment processor to make it all happen.

If you’re looking for an interesting way to spice up your blog or try out a new method of monetization, this may certainly be worth a look; especially since it’s still free.

My guess is that we’ll soon see Micropayments popping up all over the world of IM and the web in general – if you’re one of the ones to get in on it early and in the right niche you might just find yourself swimming in a pool of cash.