PayPal Goes Live With Micropayments: Sell Digital Tracks Direct & Keep More $’s
An inability to profitably process small transactions has been a major impediment to growth in direct to fan digital music sales. A 99 cent track on iTunes nets an artist or label about 65 cents. Often a distributor takes another 10 – 25% diluting the profit further to under 60 cents. Additionally, who bought the track and other transaction data remains is not passed on to the artists. PayPal and others have been working to make micropayments profitable and yesterday brought their solution out of beta.
PayPal now allows consumers to pay for digital goods in as little as two clicks without leaving the publisher’s site. They call it, "the online equivalent to dropping a quarter in the slot to buy a gumball".
PayPal for digital goods is priced at 5% plus 5 cents for purchases under $12. Publishers and merchants are paid automatically and given immediate access to their funds, every time a customer purchases digital goods.
The result: a 99 cent track can net the artist as much as 89 cents, they get paid immediately and the transaction data is theirs to keep.
LOVE this! I mean, making more money per track matters very little when most anyone can get the product your trying to sell for free somewhere else, but the fact that you can actually get a better idea who your demographic is and possibly communicate with them building a stronger relationship is always good. Plus, companies who really aren’t doing much for you are no longer getting as much of a percentage. Ah, if this would have only been an option 5-10 years ago opposed to now where iTunes has a stranglehold on legal downloaded music and torrent sites that have a stranglehold on illegally downloaded music! 🙁
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Well said Chancius, I love it.
thetapmusic.com is using this
Good stuff. Long overdue.
THis is pretty big and awesome. I know everyone will benefit from this..
but is there any difference in using something like bandcamp?
“Amazon Payments” was offering micropayments way before Paypal. Glad to hear Paypal finally added this!
http://www.lachini.com is using both
Right, but what iTunes does that PayPal doesn’t is market your music to potential new customers in a targeted fashion, via the ‘Listeners Also Bought’ / Genius functions.
As the number of people increases who buy your music from iTunes, the Genius data that iTunes gathers from each user’s library will result in better recommendations for people who aren’t already exposed to your music, but who do share similar tastes with your existing customers. Transaction data is great if all you want to do is communicate with your existing customers (not that this a pointless exercise by any means: who doesn’t want to engage with their audience?), but as far as generating new business, it’s useless. In that respect, it’s erroneous to accuse iTunes of ‘really not doing much for you’ as they’re providing a valuable service in helping to promote your music to potential new fans: given the choice, I’d prefer to give Apple the 30 cents and have them expose my music to a wider audience without me having to lift a finger, rather than keep the 30 cents in exchange for e-mail addresses of people who already know who I am and are already buying my products.
they’ve had this for a while. problem is you had to switch your entire account to micropayments, so you would pay more commission for larger ticket items
Old news. I have had a second PayPal account under the micropayment schedule for more than a year now.