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Arnold Kling has a Ph.D. in economics from MIT; founded homefair.com, one of the very first commercial websites, in 1994; separated from Homefair in January 2000 after it was sold to Homestore; is author of Under the Radar: Starting Your Internet Business without Venture Capital, and is an essayist. Send comments to us at econ@corante.com

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January 13, 2004

Classic Clay Quote

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Posted by Arnold

On micropayments:


Shirky pointed to the online porn industry, which has tried on several occasions to adopt a micropayment strategy akin to the 25-cent peep-show booths in the offline world.
"They can't make it work online," Shirky said. "And those guys are the e-commerce geniuses, so if they can't do it, who can?"

I wonder if they have tried the "club" model (many sites accessible with a single subscription) and, if so, whether it works.

Obviously, this is a question that will require extensive research on my part in order to answer, won't it?


Comments (1) + TrackBacks (0) | Category: economics of content


COMMENTS

1. Brad Hutchings on January 13, 2004 11:41 PM writes...

Arnold,

I think you could just turn image loading off in your browser preferences and really find some interesting stuff. I remember seeing AdultCheck in popups awhile back (when I wasn't using a browser with a popup blocker), so decided to google for "AdultCheck business model" (no quotes).

They call these things AVSs or Age Verification Systems and apparently, they are going away. It probably sprung out of the Communications Decency Act, and the online porn industry trying to look like it was cooperating -- idea being that nobody under 18 would have a credit card. So make every porn site an affiliate to a system that charges a credit card for blanket access to a large network. The marketing story is that it keeps minors out. The webmaster story is that they get a cut of each sale they generate.

Anyway, looks like AdultCheck did a bit of a BusinessModelChange recently. Here's one article that thinks Visa is behind the conspiracy to end the AVS business model.

http://www.theadultwebmaster.com/articles/031201_avs.phtml

Sounds like AdultCheck has adopted a club model to Arnold's liking, focussing on premium content providers. With a cursory look at things, the problem to me seems to be whether they can keep their brand while shrinking the scope of content 1000-fold or more but likely increasing total quality just as significantly. Under the AVS model, I bet most Internet users had seen AdultCheck flash on their screen. In a premium model, they are a destination you'd have to know about.

-Brad

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