The Market Wasn't Ready

I received an email about my November 14th post about micropayments. The message suggested that I'd really blown it back in 1999 by not jumping on the micropayments business then.



I beg to differ. (Actually, I'm not really begging -- I AM differing.)



Ever heard the phrase "the market wasn't ready for it"? Sometimes a new offering is simply way ahead of its time. It may be a great idea, but unless there is sufficient market demand, it won't get off the ground as a business.



That's what happened with micropayments the first time around during the dot-com boomdays. There just wasn't enough demand or need for micropayment services to purchase content. How could there be, when everyone expected Internet content to be free back then, and few were willing to pay? Without the market need, the services never took off.



Indeed, they still may fizzle. Micropayments are barely beyond the experimental stage, even in late 2003. The two services in my post, Peppercoin and Bitpass, appear to be in beta test. And the numbers of micropayment transactions that I cited are truly small numbers. Only time will tell.



But if I were to bet, I would bet in favor of micropayments taking off. Why? In part because of the MAJOR shift toward paid download services for music. Nothing against you comics lovers, but selling comics is not enough to make a business out of micropayments. For micropayments to take off, they have to be driven by sufficient financial incentive.



Low-priced downloads of music just may be that incentive. For an example of the relationship between music downloads and micropayments, see the press release announcing that American Empire Records plans to launch the new single by Sanity online at a price of 99 cents (US) using the Paystone micropayments solution.