Skip to main content

Utility

iTunes website screenshot

The utility model is based on the concept of metered use, where clients pay for services as they are used, for example downloading documents or music. For example the Institution of Electrical and Electronic Engineers (IEEE) allows the download of articles from its journals. Each article costs $10 for members or $29 for non-members, while iTunes allows customers to download TV programme episodes as well as single music tracks or complete albums.

Services based on a utility model often involve the use of low-value payments known as micropayments. Since it is expensive to accept small payments via credit card, many online businesses use third-party vendors such as MobileMoney to manage the billing and collection of micropayments. These vendors normally receive a percentage of each transaction.

Next: Merchant