Deloitte: micropayment will be all bark, no bite

The global consulting firm Deloitte has released its predictions for the media sector in 2010.

Deloitte India’s media leader Ashesh Jani says, “there will be ongoing challenges for the newspaper and magazine industry, which will continue to threaten to charge readers for online content but that talk is unlikely to be matched by significant action.”

“In 2010, the newspaper and magazine industry will continue to threaten to charge readers for online content, however that talk is unlikely to be matched by action.

“Publishers rumoured to be thinking about pay walls may ultimately decide against it, or are choosing hybrid models where most content is free, while charging only for a limited quantity of premium content.

“Publishers who use pay walls need to maintain and publicise the premium nature of their content. Excessive cost-cutting could devalue the brand.

“Online readers might be willing to become micropayment customers, but only if the content is good enough and worth the effort. For some, acquiring an article for 30 cents online may not justify the time taken to enter credit card details.

“Also, the value of the micropayment strategy to the content provider requires volume: one micropayment per customer every two weeks might result in transaction costs exceeding gross margins.”

Link via K.R. Balasubramanyam

For a copy of the report, mail Deloitte corporate communications manager Mallika Kumar:

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