It could be partly because this generation is being raised on the Internet and our attention spans are shorter than ever, but it seems that there has been a definite push toward microtransactions in recent years. his business model has infiltrated all sorts of digital delivery channels. While each individual purchase does not yield much in terms of profitability, the volume can easily make up for this. With our short attention spans and disposable income, we seem inclined to indulge in a lot of impulse buys. It’s only a buck or five, right?
Take the iTunes Music Store, for example. In the past, you may have taken a little more time to consider what music you would buy. This is because you’d have to make the effort of going to a physical store and spend $10-$20 on a CD. That’s a small purchase, to be sure, but parting with $20 can take a little bit of thought. By contrast, you can hop on iTunes and buy a single song for 99 cents. For many people, there’s no real thought involved for a sub-dollar purchase. You want it, so you get it.
Moving forward, we’re seeing the same kind of phenomenon with the App Store for the iPhone, the BlackBerry App World, and other similar solutions. Buying that $200+ cell phone takes some serious thought, but now that you have it, spending $1-$10 on an app is still very much an impulse buy. The developers recognize this, since the application can be relatively simple to develop and, thus, does not take much time. If popular, an app can be downloaded and purchased thousands of times. We’re seeing the same kind of thing with the Xbox Live Arcade, Wii Shop, PlayStation Network, and so on.
The emerging business model of microtransactions appears to the wave of the future. Bigger purchases can make for quite a bit of competition and quite a bit of comparison with competitors. By contrast, a person can just as easily buy a handful of apps for their iPhone that all do the same thing, only to see which one works the best. It’s far too easy to indulge in purchases two dollars at a time.
What do you think? Should we expect other industries to partake in microtransactions as well? After buying a DVD, maybe you can buy the special features at a dollar each?
Robert Ballantyne
May 19, 2009 12:15 pm
I’m not sure that I agree with the premise: “our attention spans are shorter than ever.” I think we are all scanning a lot of information quickly. In the old days that could take a lot of time looking a newspapers, magazines, television, interoffice cover-your-ass memos, etc. Most of it was boring and a HUGE waste of time. Now with RSS, twitter, social media sites, we have lots more info; but a much larger proportion is relevant to each of us because have chosen the streams of news flowing by. Moreover, much of it offers us the opportunity to interact, and do that quickly. The rule that says 90% of everything is crap is still true, but the 10% that isn’t is now a very large amount of useful information. The trick is to scan and reject the 90% quickly. It gives the illusion that our attention span is short.
I see more people than ever producing creative content with their time. This includes blog articles, amazing <140 character thoughtful tweets, etc. This is done in addition to the our normal work, studies, and family time. When I read some of this amazing literature, or visit the home of someone who has prepared a fabulous meal, or just hang out and talk with friends, I realize the richness of their lives… and much of it has to do with window-on-the-world that the Internet provides. It even links us to new and wonderful people who share our interests even if they are not in our geographical region. When I see these results that these people produce, I know that the time-on-task was considerable, and certainly not the result of someone with a short attention span.
I do, however agree with the main thesis about microtransactions. As I look at my Mac’s dock, I see a row of apps, many of which were produced by individuals and small teams – not the software giants. I prefer the almost-personal relationship I have with the developers; and when I like the app I am delighted to reward the developer with my business.
Is this really new? In the supermarket there are lots of point-of-purchase items placed next to the check-out in the hopes that the buyer will add them at the last moment because they are desirable and not-too-expensive. Isn’t that the old-fashion microtransaction?
Unlike the supermarket, it is easy to scan the list of new or updated apps, and if one if of interest, to download it and give it a try. Trying is fun. And many have actually made me more productive. Frankly, that’s better than buying a magazine at the check-out counter because when I make the purchase, I’ve used it and decided that it will really serve me.