Pay-Per-Play

views updated

PAY-PER-PLAY

When Web-based proprietors charge visitors "by the session" to play an online game, access a software application, or view streaming video content, the scenario is referred to as pay-per-play. Payper-play scenarios usually involve micropayments—online transactions for low-priced items on the Internet that range from a few cents to as much as $10.00. In the mid-to-late 1990s, when the Web was still a relatively new environment for the public, some video game companies discovered that consumers wouldn't pay monthly subscriptions to access Web-based games. This caused a movement to hourly charges for playing games. By the 2000s, although many online games were available for free at various Web sites (supported by advertising revenue instead of time-based fees), many also were available on a pay-per-play basis. The approach also was being used for other types of software.

In order to have a quality experience, users wishing to access software or video via the Web must have adequate Internet connection speeds, or enough bandwidth to receive large chunks of data. Poor bandwidth was a roadblock in the mid-1990s when the Web first became popular with consumers. In 1995, Wave Systems was one company that unsuccessfully tried to deliver pay-per-play software to consumers with wireless radio frequency modems. As Internet connection speeds increased this approach became more realistic. Unlike audio and video, software applications are used incrementally, or in bursts. After accessing the initial information required to begin the software session, users access other pieces of the software as needed, depending on the tasks they are performing. This makes software especially suitable for distribution over networks like the Internet.

Into Networks was one company providing payper-play software in the early 2000s. The company housed software programs from companies like Disney Interactive, Hasbro Interactive, Macmillan USA, and Simon & Schuster Interactive on special servers, to which users with broadband connections linked for access. These servers were located with different Internet service providers (the entities to which consumers subscribe in order to connect to the Internet), and at other locations across the Internet. For users, the company's technology eliminated installation problems one might experience if software were installed locally, reduced long download times, and provided a way to try programs before buying them. It eliminated the problem of lost or damaged CD-ROMS, and was more economical for users who only needed to use applications a few times. For software publishers and marketers, it provided access to new users, extended the lifecycle of products, provided new sources of revenue, and offered a means to test new titles.

Implementing pay-per-play technology posed some challenges for companies in the early 2000s, namely in the areas of structuring licensing fees, adapting for use over the Internet applications that weren't originally designed for that purpose, and resolving issues surrounding the operating systems (such as Windows, Macintosh, Linux, and Unix) that were employed by computer users worldwide. Despite these challenges, the future of the pay-per-play approach looked very positive in the early 2000s. Microsoft CEO Steve Ballmer predicted that as broadband applications became widely adopted, packaged software would vanish in lieu of online access to applications. Additionally, InfoWorld, indicated that from 2000 to 2003 IBM planned to invest at least $4 billion to establish itself as a leader in fee-based, on-demand computer services. IBM planned to focus on its own applications, and to build the infrastructure other software companies would use to offer their products.