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Aug. 27, 2009, 12:06 p.m.

Micropayments and the power of free

WriteRoom is an iPhone app for taking notes that has a few nice features. I know about the developer, Jesse Grosjean, from some of his Mac work, and when I saw last night that the app was on sale for 99 cents, I bought a copy.

But that sale was actually part of an experiment Jesse’s been running with WriteRoom’s price, and he’s now publishing the data he’s collected. And it raises some interesting perspectives on the ongoing debates around micropayments.

WriteRoom used to cost $4.99. And last Thursday, at that price, it sold nine copies.

Then Jesse decided to make WriteRoom free for three days. In that long weekend, his application was downloaded a whopping 16,347 times.

Then, starting Monday, he brought back a price — this time, only 99 cents. In the first two days at that price, he averaged 72 sales a day.

Now, selling iPhone apps isn’t precisely analogous to selling individual news stories, for a variety of reasons. And any number of external factors could have influenced Jesse’s numbers. But it’s also another bit of evidence of how enormously price-sensitive people are in a digital environment. As Chris Anderson will tell you, free is an entirely different animal from any price — even one as insignificant as 99 cents. If you can afford an iPhone, you can afford 99 cents for an app. But even for this relatively upmarket crowd, that tiny sum was a huge barrier. Journalists who think their audiences will happily start paying a nickel/quarter/dollar for every story they click on should take note.

(This is also why I always counter arguments for micropayments with a push for macropayments. There are in fact people willing to pay for news content. But they’re a smaller share of your audience than you might think, and they’re also willing to pay more than a nickel or a quarter. If you’re going to try a paid-content model, to me it makes a lot more sense to make sure you’re getting all the revenue you can out of those bigger fish than to waste energy chasing after the folks who will never pay anything.)

POSTED     Aug. 27, 2009, 12:06 p.m.
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