What would happen if we all paid for e-mail?

I’ve written in the past that the spam problem is an economic one: we get huge quantities of spam because it costs very little for spammers to bombard you with their junk. As a result, spammers don’t have to be selective about their recipients, since it costs about the same amount to send one million e-mails as it does 10 million.

The amount of unsolicited stuff that we get from other sources, such as junk postal mail, is regulated by the fact that printing and postage costs require junk mailers to be more selective in choosing who receives their e-mail, since these mailers must convert a much higher percentage of recipients to customers in order to earn a profit.

So what would happen if it cost all of us one-quarter of a cent to send an e-mail? Let’s go through a few scenarios:

1. The typical workplace user sends a median of 25 e-mails each day at work. Using a four e-mails-per-penny charge and assuming that 40% are externally sent e-mails, an organization would spend just over $9 per user per year on e-mail sending charges. However, our research shows that an organization spends 5.9 IT person-hours per week per 1,000 users just managing anti-spam systems, or about $10.30 per user per year. If this cost could be reduced by 50% because of the use of a pay-per-e-mail scheme, the net cost of paying for e-mail would amount to about $4 per user per year. Even if users sent 100 external e-mails each day, the cost would be only about $86 per year per user.

2. A legitimate mass e-mailer that was able to convert one e-mail recipient in 1,000 to a customer would spend $2.50 cents to generate a sale, approximately the cost of sending one or two nice catalogs through postal mail.

3. A small business owner who sent 1,000 newsletters to her opt-in customers each month would spend $2.50 to do so, less than the cost of a tall Caramel Macchiato at her local Starbucks.

4. A spammer who currently sends 30,000 e-mails to generate a sale would need to earn $75 per sale just to break even. If a spammer became more selective in order to achieve a higher recipient-to-customer conversion rate, the amount of spam he or she sends would drop dramatically.

Clearly, for a pay-per-e-mail scheme to work, it would need virtually universal acceptance, such as everyone’s e-mail server blocking e-mail that was not paid for by the sender. However, if it was accepted, it could go a long way toward reducing the spam problem. What do you think of this idea that many before me have proposed and even implemented with varying degrees of success? Please drop me a line at mailto:michael@ostermanresearch.com.