Will Teens Pay For Anything? [Yes!]
Posted by anastasia on 07-08-2009
This Friday I will be speaking on a panel moderated by our friend Guy Kawasaki riffing off the debate around “free” and whether anyone will pay for anything [I'm pretty sure the implication is online]. I will focus on the Ypulse demo — tweens, teens and early twentysomethings — but can also speak from my experience in monetizing Ypulse. I would love to [warning: buzzword ahead] “crowdsource” some additional thoughts/ideas from Ypulse readers about this topic that I can bring with me as well.
To get teens and tweens to spend online…you have to get to their parents. With tweens you have to get to parents directly. With teens, it can be more indirect. But in both cases parents still control the purse strings or the credit card. Yes, there are companies in this space attempting to make the teen buying experience more direct like Bill My Parents and rixty, but the reality is that most teens will still have to go ask mom or dad for a credit card to purchase something online. Any company that doesn’t acknowledge the need for some kind of parental consent can get into trouble like a few mobile companies did back in 2005 when teens could just add ringtones and other paid services to their accounts without permission.
So…what won’t they pay for?
The challenge with teens or anyone online is that once you’ve become used to getting certain content online for free, asking users to pay for that same content is a fairly Herculean task. Take music for example. The “Napster” generation has grown up being able to access and share most music online for free. Parents who don’t download themselves and attempt to teach kids that music is worth paying for combined with the threat of being sued by the RIAA may have moved some young people to pay for digital music, but the numbers still aren’t good (NPD Group: CD purchasing declined 26 percent and paid digital downloads fell 13 percent compared with the prior year). This definitely applies to video and most written content as well (newspapers, magazines and books) with the exception of college textbooks. Buying clothing online is a challenge for teens because it tends to usurp the social experience of going to the mall with a group of friends (never mind the sizing issues).
What will they pay for?
We just posted a study from WeeWorld yesterday confirming that teens (and/or their parents) will pay for some virtual goods for their avatars or virtual spaces. We know parents of tweens will pay for ad-free environments like Club Penguin. Other nuggets from this study suggest that: “‘anything fun’ online is worth paying for (34 percent), followed by expressing themselves and their passions (22 percent), getting more access (13 percent), making them look good (13 percent), things that not everyone else can have (11 percent) or to send to friends (8 percent).” We know that dedicated gamers will pay to play certain games online or to buy stuff for their characters. I remember working with a teen Beatles fan who told me she would definitely pay for cool memorabilia online [things no one else can have]. And even though eBay is for users 18 and up, I know there are lots of teen [under 18] eBay entrepreneurs out there buying and selling on that site.
These are just my initial thoughts. I would love to hear yours — feel free to disagree and add any links to studies I can cite in the comments.
Categorized under: Web
July 8th, 2009 at 11:22 am
Hi Anastasia,
good overview. I’d add to this that teens do pay for mobile content – although most frequently the parents probably pay for it through their cell phone bill. And likewise, I assume the i-phoned teens are paying for apps and songs as well.
July 9th, 2009 at 7:45 am
Some thoughts: teens I know will pay for music through iTunes family access account, and have it taken out of their pocket money (awkward — should be easier). If iTunes gave you multiple access, with simple reports for each downloader, I’d be very happy. They will also will pay for ringtones, but not too many. Will definitely pay for iPhone games at around $3/$5 each. For clothes, they will browse sites like wetseal.com to preview what’s there, and then go into the ‘real world’ to get stuff.
As a parent, I want to use my existing payment channels (ideally paypal) to organize how my teenagers purchase online so I can take the money out of their allowances. Surely that can’t be hard?!
July 9th, 2009 at 9:38 am
I like Alice’s point. When I was a teen (not that long ago), I craved being able to spend my own money. But, honestly, it wasn’t that big of a deal to have to get my parents’ approval because then I did less frivolous spending. On the other hand, the hassle of getting approval was often frustrating, and left a bad taste in my mouth. The more we offer reports, analytics, etc. to parents to track their children’s spending, the less parents have to be directly involved in the spending. That way, parents know what their children are spending and how they’re spending it. And their children know that they’re earning trust while being able to freely spend their own money (whether it’s earned or given); thus, they’ll still be less likely to spend frivolously, but can spend when & where they’d like to, regardless of whether their parents are around.
July 9th, 2009 at 10:54 am
My son has been in college now for two years and he supports him self for the most part, but one of the things we help him with is his school expenditures like tuition, textbooks, and other supplies. So when our son told us about this site called http://www.bigwords.com that price compared his textbooks and found them for the cheapest price anywhere with out even leaving his dorm we thought it was just the greatest thing possible! I suggest every parent and student check out the site cause it seriously saved us so much money on his books.
July 10th, 2009 at 11:27 am
[...] Anyone Pay For Anything"? moderated by Guy Kawasaki. I wanted to thank the folks who commented on my post earlier this week — I was able to incorporate some of your comments into my remarks. Like any [...]
August 16th, 2010 at 8:56 am
My children usually find what they want to spend their money earned from chores online. Then I have to take them to the store to buy because I won’t give them a credit card number. Now instead of going to the store to buy them what they have earned they can order it online and we can do something else.