Starting in 1994, the founders of Clickshare Service Corp. developed a prototype for “dynamic pricing” for information commerce on the web. Now, 17 years later, the idea is emerging as a central tenant of ecommerce.
What is “dynamic pricing”? The ability to vary the price for a digital good in real time, depending upon the attributes of the user or the type of use the user intends.
Take a news story, for example. Suppose a news organization breaks a big story — “hot news.” For the first few minutes the story is out on the web, it may have great value. But soon, because you can’t copyright facts, other news organizations will pick up the raw facts and remix them into their own stories. So the ability of the first news organization that broke the story to charge for it drops quickly to zero. Later, the story goes into archives, and researchers looking for the origins of the story might be willing again to pay more for it.
Take the same story. The initial use is mass-market. But what if the story is about a topic of ongoing significance to researchers, or a topic which affects the value of investments, or moves markets? The mixing of that story with other information might add to its value. So a niche user might find it of more value than the casual, mass-market user.
The public-radio program “On the Media” covers the topic in a Dec. 17, 2010 interview with Slate online magazine reporter Annie Lowery. Is dynamic pricing legal? Lowery says yes. She says online retailers might use your browsing history, your purchase history and even your browser type to figure out what to charge.
Here’s Clickshare’s patent in this area. The Center for the Digital Globe, at the Donald W. Reynolds Journalism Institute at the Missouri School of Journalism, is undertaking research on web content pricing in an environment where a content clearing house emerges.