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Micropayment: what is the reality today?

Allopass Barometer

October 2009

Section 1: Methodology

Sample: Sample of 1,005 individuals representative of the French Internet population aged15 and over. A representative sample was ensured using the quota method (gender,age, profession of the person interviewed) after stratification by region and urbancategory.

Sample of 345 customers and leads from the Hi-media customer/lead database.

Sample of 1,052 individuals representative of the American Internet population aged15 and over. A representative sample was ensured using the quota method (gender,age, household income) after stratification by State.

Survey method: Interviews conducted by means of self-administered online questionnaire (CAWI - ComputerAssisted Web Interviewing).

Survey dates: From August 10 to 18, 2009 for the survey of the general publicFrom September 14 to October 6, 2009 for the survey of professionals

Methodology

Section 2:Micropayment: an everyday reality

Total "Yes" 57%

Over half of French Internet users and a quarter of American Internet users are aware of the micropayment concept

Question: Have you personally ever heard of "micropayment"?

General Indicators

YES, and you know exactly what it entails YES, but you are not really sure what it entails NO, never

Total "Yes" 25%

Once the concept is clearly explained, half of both French and American Internet users say they use micropayment

Question: Would you say you use micropayment to access paid service or content on the Internet frequently, fairly frequently, from time to time, rarely or never?

General Indicators

46%

51%

Total Frequently/From time to time/Rarely

Total Never

While the bank debit/credit card is the most common means of payment, over 50% of Internet users use another means of payment.

Each age-group has its own preferred means of payment.

Question: For each of the following solutions, could you indicate if you have already used them foroccasional payments of sums less than 5 euros/dollars on the Internet?

General Indicators

Recap: Total Yes

%

%

%

%

%

% %

%

%

%

%

%Pre-paid card

E-wallet

ISP Billing

Premium SMS

Premium Phone Number

Credit/debit Card

Use for a variety of services and content."Games" head the list in France and "Music" in the USA

Question: For which Internet services or content have you used online micropayment solutions?

Micropayment practices

Base: those using micropayment on the Internet, i.e. 77% of the sample (France) , or 74% of the sample (USA) /recap: total Yes

%

%

%

%

%

%

%

% %

%

%

%

%

%

%

%Buy e-goodies

Obtain legal information

Watch videos

Download music

Post classifieds

Download documents

Play/download games

Other services

Frequency of transactions:Preponderance of VOD and music in the USA

Question: Can you quote an average number of transactions per month you access each of the followingservices or content?

Micropayment practices

Base: for each service or content, those using micropayment on the Internet and having used these services/content/ Recap: Average number of transactions per month. .

Buy e-goodies

Post classifieds

Download music

Play/download games

Watch videos

Download documents

Obtain legal information

Other services

Two thirds of users have confidence in micropayment solutions

Question: On a scale from 1 to 10, how far do you trust online micropayment solutions (1 indicating that youhave no confidence in them, and 10 that you have absolute confidence in them)? Intermediate scores can be usedto refine your answer.

Micropayment practices

Base: those using micropayment on Internet, i.e. 77% of the French sample and 74% of the American sample

Average score6.6

Average score 6.4

Speed and simplicity: the two key advantages of micropayment

Question: For each of the following descriptions, would you say it applies to the micropayment solutionscurrently available on Internet very well, fairly well or not at all?

Micropayment practices

Base: those claiming to use micropayment on Internet/Recap: Total of Very well

Rapid access to target content

Easy to use

Access to useful content

A reliable alternative to bank cards

Secure for the purchaser

Not widely enough available on the Web

Encourages paying for content

%

%

%

%

%

%

% %

%

%

%

%

%

%

Over 70% of users are satisfied and would recommend micropayment to others

Question: All in all, do you think you would recommend micropayment solutions to friends, family or

colleagues for access to paid online services or content: certainly, probably, probably not or certainly not?

Certainly Probably Probably not Certainly not

Base: those claiming to use micropayment on Internet, i.e. 77% of the sample./ NB: Question asked only in France

Micropayment practices

… and in those that have had an Internet connection for more

than 10 years

Less marked social and professional divide in the USA

Micropayment solutions…

On the basis of 2 indicators: awareness of micropayment,frequency of use of micropayment

User profile

… are more in men's line

… concern a hard core of users aged 18 to 24 and up to

at least 35 (in the USA in particular)

… in France: higher social classes are better informed on the subject

… are more common in

households with children under 18

Section 3:Micropayment: Development potential

Two main reasons for non-use: No need and lack of awareness of solutions

Question: What are the main reason(s) you have never used micropayment solutions to access paidonline services or content?

Focus on non-users

Base: those not having used micropayment on the Internet, i.e. 23% of the French sample and 26% of the US sample.

%

%

%

%

%

%

%%

%

%

%

%

%

No need

Not fully aware of solutions

Preference for similar free content

Unwillingness to divulge personal details

No confidence in these solutions

No confidence in sites offering these solutions

Too complicated solutions

%

A quarter of non-users would be willing to use micropayment for documents, small ads and music

Question: Would you use a micropayment solution for each of the following contents or services?

Focus on non-users

Base: those not using micropayment on the Internet, i.e. 23% of the French sample and 26% of the US sample. / Recap: Total Yes

%

%

%

%

%

%

% %

%

%

%

%

%

%Documents

Classifieds

Music

Online videos

Legal information

Games

E-goodies

Section 4:

Micropayment: an effective source of

revenue for publishers

Spontaneous and assisted awareness among users that supports merchant activity

Questions: - What micropayment solutions do you know by name?- Of the following solutions, which ones do you know?

• Allopass and Paypal are the two leading players spontaneously mentioned by French Internet users

Allopass is the first micropayment solution spontaneously mentioned by French Internet users

• Similar finding for assisted awareness: 55% of French Internet users are aware of Allopass

Awareness

Paid services have no impact on audience figures

Question: Has the introduction of paid services on your website led to a drop in your audience?

NO

YES

Base: Question put exclusively to clientsBase: Question put exclusively to clientsBase: Question put exclusively to clientsMicropayment: a real source of revenue

%

%

Micropayment, the primary revenue stream for Allopass clients… also monetizing their audience via other revenue

sources

Question: What is the main source of revenue for your Internet website(s)?

Micropayment: a real source of revenue

Micropayment

Sponsored links

Affiliation

E-commerce (sale of material goods)

Graphic advertising

Sponsorship

Games: 60%

%

%

%

%

%

%

¾ of Allopass clients sell on a pay per transaction basis

Question: How do you sell your content or services?

Telecoms, Internet, IT: 89%Current affairs and information: 88%

Games: 88%

Micropayment: a real source of revenue

%

%

%

Micropayment per transaction

Subscription +

micropayment per transaction

Subscription

Section 5:The main lessons

No reluctance on the part of Internet users

Considerable development potential: subject to new offerings from content publishers:

record companies, press publishers and videodistributors in particular

A solution that has already proved its value amongInternet site publishers:

Micropayment is the primary revenue stream forAllopass clients, ahead of advertising

Conclusion

Thank you

The survey in brief

1

While the majority of French and American Internet users have no clear visionof exactly what the concept of micropayment entails yet, they nonetheless use itfrequently in their everyday lives to purchase small-ticket services or contentcosting less than €5. The means of payment used are very diverse and dependmainly on user age.

The main purchased content is "games" in France and "music" in the USA.American Internet users are much heavier consumers of "VOD" and "music"content with approximately 5.9 and 6 transactions per month for each of thesecategories respectively.

Speed and ease of use are the two main qualities attributed to micropaymentsolutions in both France and the USA.Two thirds of French and American users have confidence in these solutions.

2

3

6 points to note

4French users are mainly ABC1 men with a hard core in the 18 to 24 age-group.In the USA, the core group is also male but over a wider age range (18 to 34). Inthe two countries, micropayment is used particularly in households withchildren under 18 and that have had Internet connections for over 10 years.

Allopass enjoys excellent spontaneous and assisted awareness that puts it infirst place among the micropayment solutions mentioned in France.

Where professionals are concerned, micropayment is a real source of revenuefor Internet site publishers. It is the primary revenue stream for Allopass clientswho also monetize their audience via other solutions (graphic advertising,sponsored links, affiliation, etc.).

5

6

6 points to note