Monetization Strategies - PixelPass Mini-Subscriptions

PixelPassHere is an interesting model for monetizing a website - mini-subscriptions. PixelPass offers mini-subscription services for blog and website owners to enable them to charge a small monthly fee to access their content - anything from 25c - $2.

The model works like this -

Internet users pre-purchase $5 worth of PixelPass credit which can be used on any site charging through the PixelPass system. Website owners set up the PixelPass on their site and choose the appropriate fee they want to charge. PixelPass takes a 40% cut from the fee.

My initial reaction was this is just not going to work. For a site charging the maximum fee of $2, which they earn $1.20 after the fee is taken, you would need massive amounts of volume to make it profitable. Given you have that level of volume you are better off setting up your own payments system to keep 100% of the profits. After taking a look at the demo site I’m even more worried since the “lock” they place over the site is certainly going to be a huge traffic turnoff.

I thought about it some more and if I could PixelPass only on certain areas of a site, maybe a members section or a weekly “feature article”, it might work and certainly the flexibility of the system could make it appealing. I also believe the targeting of the service is not at those wanting to get rich from their site, more likely PixelPass is aiming to be a revenue solution to cover perhaps hosting fees or similar. There is no way I would recommend applying the pass to a full site, it could only work once you have convinced your visitors of the value of your content by giving some away for free.

I’m still not sure it’s viable and I can’t yet come up with a specific area where this system would suit a need better than the other payment systems available - maybe my readers can come up with some ideas?

From the PixelPass point of view they obviously have a critical mass issue to deal with. In order for it to be worthwhile to pre-purchase pixelcash there have to be enough appealing websites to subscribe to. Although given if just one good site was using it that could be appeal enough to bring in a few thousand users.

PixelPass for your Blog or Website
PixelPass is a service that finally enables you to easily charge users small fees for access to your online content. If you have been struggling to make online advertising work and if your website isn’t suited to traditional stand-alone subscription systems, PixelPass is the subscription solution that will work for you.

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7 Comments

MyAvatars 0.2

Awesome site Yaro, nice to see a good Aussie entrepreneur on the web. I found this a few days ago and have since read all articles and entries which I’m interested in (which is most of the content). I’m currently listening through the podcasts too!

The PixelPass system looks very similar to that of the prepaid, or pay-per-view systems used by most online news and newspaper sites.

I’m not sure how well these such sites do in terms of cash flow, but I guess there are some people out there who are willing to pay for quality online content.

However, I don’t believe applying a prepaid system to blogs will be very successful or popular from the point of view of the internet community. Users will simply move onto a different blog (that is free to view).

The only way I can see this PixelPass system working would be when particular areas of a blog have highly sort-after content or perhaps downloads such as podcasts etc.

cheers
nathan

Comment by Nathan Waters @ 2005-09-03 16:11:26
 
MyAvatars 0.2

Hi Nathan, welcome to my blog. I agree with everything you said. No doubt the magazine/newspaper style sites that have this form of subscription method use their own payment system to keep the profits. While I like what PixelPass is trying to do I just can’t see it working, and like you said, especially for blogs.

Comment by Yaro @ 2005-09-03 16:37:52
 
MyAvatars 0.2

Good post Yaro, I’ve had my eye on this type of micro-payment system for quite some time now. If I were to move forward and monetize some of my content, I think I would go with bitpass.com.

BitPass’ fees are *much* lower and I think they’re more established and have been around for a while. This is a well known company in the web-comics industry. It’s been a debateable topic for a while in the web-comics community.

Scatt McCloud (Unserstanding Comics) has always been a big proponent of this system. You can check out his thoughts on his site, this page in particular:
http://www.scottmccloud.com/links/links.html just scroll down to the section labeled: “Micropayments and BitPass”

Comment by BradFitz @ 2005-09-03 22:48:57
 
MyAvatars 0.2

I also just noticed PayPal enterd the micropayment fray with this announcement:
http://www.shareholder.com/paypal/releaseDetail.cfm?ReleaseID=171765&Category=US
Now I’m *really* interested because PayPal is so well known these days, and to the majority of surfers, well-trusted.

Comment by BradFitz @ 2005-09-03 23:18:06
 
MyAvatars 0.2

Interesting, but the 40% fee seems a bit steep. It also wouldn’t really appeal to me as I’m from England, so exchanging between currencies would be an extra hassle. I hear rumours of Google Wallet coming out in the future though - a rival to the very popular PayPal. I’ve said it before and I’ll say it again - competition is fantastic for consumers.

Comment by Benjamin Riches @ 2005-09-03 23:39:11
 
MyAvatars 0.2

Interesting bunch of links you guys posted there. I’m pleased to see Paypal enter the market. I still find the concept of micro-payments online a little strange. In real life pulling out 50c to pay for a comic makes sense but doing that online with a credit card I feel would face some resistance. In time it should become more accepted.

Do you think bloggers could use this system - let’s say for example I was to write a weekly feature article and charge $2 for it - would you guys buy? Do you know any other bloggers doing something like this? How about $2 per podcast? Personally I doubt I would pay this at the moment for blog content.

Comment by Yaro @ 2005-09-04 09:32:46
 
MyAvatars 0.2

I think paying for a podcast wouldn’t be too bad — at least you can download it and burn it to a CD and listen to it again another time. I would pay for podcasts, but not articles. The podcast however would need to be longer than usual, and be worth teh $2 or whatever you would charge, but I think it is a good idea — after all podcast eat up bandwith like mad!

Comment by Jason @ 2005-09-04 15:40:04
 

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