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Sure, now that it's a novelty people will drop $1.99 for a video short, but is that sustainable? After all, that's nearly $2 for 90 seconds. If that were sustainable, media companies would be dancing in the streets. Clearly this is going to change as more people adapt to mobile phones and we stop doing "show and tell" with fun little apps and media clips. Peter, I think your skepticism is still warranted, it just needs more time. I think shorts and other content will eventually need to be free just like WSJ and NYT are using teaser headlines and opening graphs to pull readers in. I do believe in micro transactions, for sure, but my guess is that we'll eventually change our behavior - where "show and tell" content may just be too frivolous - and media producers will still need to find a better way to offer and monetize content.

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iPhone Users: We’ll Pay for Content

by Peter Kafka
Posted on November 25, 2009 at 5:02 AM PT

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How do you get Web users to pay for content? Get an iPhone in their hands.

That’s one conclusion you can draw from a new survey, which shows that people who own the Apple (AAPL) handsets are more willing to pay for stuff than the average Internet surfer.

It’s a UK survey, conducted by the Olswang media law firm, but my hunch is that you’d see similar results in the US. And given that consumers look much less likely to pay for stuff than publishers and distributors would like, it’s worth chewing on. Guardian:

The survey showed that 58% of people would pay to access online a film just released in cinemas, 52% would pay for access to a film that will not be on DVD for at least two months and 40% would pay to access a film which is already on DVD or pay-TV. Looking at solely iPhone users, however, those figures jump to 73%, 67% and 54% respectively.

…News content, however, remains a tough online sell. The survey asked how willing consumers would be to buy a newspaper article or column which could be read on a computer or portable device such as a phone or e-reader. Only 19% of respondents expressed any willingness to pay – though that did increase to 30% among iPhone users.

I’ve been repeatedly skeptical that consumers will pay for something solely because it’s on a mobile device — this is the key idea behind the magazine industry’s digital plans — but I do think there are some cases where this might work.

My own anecdotal confirmation: My household just dropped $6 for three Pixar shorts for an iPhone 3G, in a desperate attempt to provide some electronic baby sitting/soothing. This despite the fact that everything we bought is also available for free on YouTube. When you need the stuff, you can’t be dependent on a wireless connection.

Here’s one of the clips we spent $1.99 on:

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This article lists new applications and feature changes in software updates for the Palm Pre phone for Sprint.

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