Micropayments are misguided

APPLE has built its iTunes and App Store empire on micropayments, small one-off payments of between a few pence and a few pounds. Now ITV is hoping to emulate that success with its own “pay mechanism”, which will likely charge customers for accessing content online or through a TV on-demand system like Virgin Media. We don’t fancy its chances.

While micropayments would potentially give ITV another, highly cash-generative revenue stream, we’re not sure the broadcaster produces anything worth paying for. We’re not trying to be snide: ITV makes some perfectly good TV, but it is clearly designed for the free-to-air market, with a budget to match.

All the evidence suggests that consumers will only pay extra for something special – what industry insiders call “an event”. It could be a live boxing match or football game, or a newly-released movie; but when it comes to repeats of The Bill or last week’s Coronation Street omnibus, it is hard to see people coughing up.

The free-to-air broadcaster could have some success getting users to pay for “one-offs” – the chance to see a season finale a few days before everyone else, for example. But considering that most of its big hits – like X-Factor and Britain’s Got Talent – are live, there is limited scope for this kind of approach.

Since joining ITV in April 2010, chief executive Adam Crozier has consistently talked about “creative renewal”, management speak for making better shows. By building a micropayments system without anything to sell, ITV is putting the cart before the horse.

david.crow@cityam.com