iPhone Users More Willing to Pay for Digital Content

2 12 2009

A new study by media law firm Olswang found that iPhone users were much more likely to be willing to pay for digital content than other users.

The report examined the willingness of people to make small payments of a couple dollars or less, called micropayments, for digital content such as newspaper articles, books, travel guides, magazines, and films. They found that people were least willing to pay for newspaper content and most willing to pay for film content. However, across the board, iPhone users were the most willing to part with their cash.

Olswang. "Convergence Study 2009."

Why is this the case?

Olswang believes that some of the difference can be explained by demographic factors.  The iPhone is a high-end product, so users would tend to have more disposable income.  Also, it is used by many hip and young people who may be more likely to spend money for entertainment products.

However, the firm argues that demographic factors probably only account for a small part of the increment.  It believes that the iPhone’s native support for micropayment is a far more important factor.  It is “not unreasonable to deduce that, where a micropayment system such as Apple’s is built into a platform and easy to use, it is more likely that consumers will willingly pay to acquire content by means of that system.”

Despite the importance of micropayments – Olswang believes that micropayment business models are far more likely to be sustainable than those based entirely on ad-support – few companies seem to be stepping in to support this kind of model.  When interviewed, media industry executives said that only the Apple iPhone and a few other proprietary platforms offered viable systems for micropayment.

There has been some speculation that the new iPhone SDK will allow developers to add micropayment support in to their own applications.  This would allow them to charge users for on demand content or subscription content rather than just a single up front price for their apps.  Giving power to rank-and-file developers to levy micropayments could aid them significantly in monetizing their products and also result in some interesting new kinds of software for consumers.

[Note: In terms of the methodology of the survey, the report says, “we commissioned YouGov to conduct an online poll of 1013 UK adults and 536 13-17 year olds.”  Nothing is said about how these individuals were recruited or how the study was controlled.]

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