The new Internet business model: $5 via PayPal

The new Internet business model: $5 via PayPal

I’ve never been that big a comedy fan. I enjoy the stuff, but I don’t seek it out as much as good music, or a strong argument. That said, I enjoy a drink and a laugh.

However, I’ve recently become a regular purchaser of comedy videos. Comedians Aziz Ansari and Louie C.K. have taken some of my money. It has been richly rewarding. The duo, along with Jim Gaffigan in the near future, put out comedy specials, and charged $5 for them. How could I say no? $5 is under my impulse buy limit, and they took PayPal. And it’s good to support people doing their own thing, right?

What surprised me about the affair is how greased the process of paying around $5 via PayPal is. Not only is that price point utterly affordable, but the use of the Internet’s payment system (which PayPal realistically is), means that all I need do is supply my password and click yes. There is zero friction. I even get a nice email from PayPal telling me that the money has changed hands.

Right, but what about other forms or content, or services? This weekend is the fourth IGN Proleauge. I plan on watching the heck out of the Starcraft 2 and League of Legends streams. They are charging $5 for access to the content, streamed live, in HD. And yes, they take PayPal.

Guess who now has $5 less to his name. This kid.

My point is this: companies that do not take PayPal, and do not charge low, round amounts for their goods and services are missing out on a pile of revenue. Marginal profitability is usually not the worry with Internet firms, it’s getting enough functioning customers. I’ll pay $5 for about anything, if I want it, no questions asked. No hemming, or hawing.

Everyone has PayPal. Everyone will pay $5. I’m calling this the new bottom-tier of Freemium. Go get some green, friends.

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