I am working on several projects that will only work out if the project can generate small payments from users. And this is true for many, many web platforms. In the old days, the barrier was the cost of transactions. Banks took too much out of the individual transaction to make it worth while to build the infrastructure to create it.
Transaction costs are now more manageable, but micro-payments as the main revenue source for a web platform based on delivering content is still problematic. Al Wenger explains why. Al thinks that crowdfunding holds more promise over time.
The information problem that Al refers to is a “buy in” issue. I am not willing to “buy into” something if I do not trust that it is something I want. And once I get it, I am less likely to pay much for it. But we get around this buy in problem every day. We buy into processes that impose costs to “play the game”. Food shopping is a simple example. We may not be sure whether the food store will have what we want for dinner, but we get in the car and drive there anyway. That is a buy in. It locks us into taking a small risk.
In my view, we are not very good at generating quality buy in on the web ye. The reason, I think, is that there is no much noise on the web, folks do not believe anything is worth buying into. I think this will change.