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Why Won't You Pay for Content?
"For the record, I don't approve of the RIAA/MPAA/etc. money-grubbing, but even if all content in and of itself suddenly became free (and I won't get into that argument), content is meaningless in a vacuum--there has to be a way to get that content to people, and that costs money, whether it's money to run the printing press, burn discs, or send data. Somebody's got to pay for that, or it just won't happen. What do you find so wrong about sharing part of that cost--and what would you suggest as an alternative?"
The problem with this stems from the fact that not everyone assigns the same value to content. Let's say Joe finds a piece of info on the Internet and he's willing to pay $10 for it, Jack finds that same piece of info but only thinks it is worth $2, and Jill finds the information not useful at all. Now if the information provider sets the value of that piece of information at $5, he's lost 2 customers, not one. Content providers need to find their way around this problem if they want to start reaping monetary rewards. Micropayments may be the answer, but even in that camp there are still more questions than answers (for one, a good International micropayment system needs to be in place). Why do you think people are so unwilling to pay for content (without all of the "information wants to be free" arguments, please).
And piracy is the boogeyman used to justify most of this. Unlimited use software, and infinitely reviewable movies will someday be redefined as "theft". Its about taking control away from you. Patented+homesteaded land cannot be taken away by gov't for any reason, so they don't allow this anymore. Europeans already scoff at "lucky bastards with flat rate phone service" in the US." while phone companies move towards eliminating this ancient practice.
It must pain the IP holders no end that their media must, in its final form, be presented unencrypted and in good quality to the eyes and ears.
Ultimately, it'll be pay-per-thought. We'll have cybernetic devices inplanted into the bas of our skulls to meter incoming content. Video/audio can then be sent encrypted all the way to our brains where final and untappable decryption takes place. Even think "Exit light... Enter night! Taaaake my hand! Off to never never land!" and ka-CHING, your credit account is charged a small fee.
1984 almost had it right, but misses profit as the basis of Big Brother.
First, everything's "worth" or "value" is subjective. I don't have much use for a hot-rod Ferrari, because I can't drive a stick and I'm not into the prestige factor of owning one. It will, however, get me to the grocery store, so I'd still pay some amount of money for one -- say $10,000.
Some guy with a lot more money than me may like really fast cars, or want to impress his rich buddies, so he's willing to shell out a quarter-mill for the same car.
In the Jack-Jill-Joe example, the smart thing for that content provider to do is price the content at $10. Joe pays his $10. If you price it lower, Joe will still buy it, but Jack won't buy it till it hits $2, at which point you've made another sale, but you lose a net $6. Jill's never going to buy it, so we don't worry about her.
This is basic econ, folks. It's not about cost, except insofar as cost of production provides a lower bound on price. It's all about how much money you make at a given price, taking into account that you may make more or less per unit, which may or may not balance out the difference in sales.
I agree with some here that we need a good micropayment system. What nobody seems to understand is that single-use pay-as-you-go and micropayment are incompatible with each other, but that is not a real barrier to micropayments. Most ATMs where I am (DC area) won't dispense less than $20, but if I need to buy something smaller than $20, I'm not screwed -- I write a check drawn on my account.
Eventually we'll reach the point where a few players have well-known, trusted micropayment account systems. Don't look for that latter bit for a while though -- it took a long time for people to regain their trust in the banking system after the Great Depression. I know people who still haven't.
-- Old Man Kensey
Credit card companies simply won't work with small-transaction systems. Further, it would be a disaster for a company. Let's say /. charges $0.001 / story. I load the front page and get 10 stories, which costs me $0.01. They charge my credit card $0.01. There's a $0.25 transaction fee from CyberCash, a 3% take from the credit card company and, likely, a $0.25 - $0.50 transaction fee from the credit card company, too.
Slashdot, of course, would go out of business within hours on a model like that. Of course, the credit card companies don't want 3% of a 1 cent transaction, either, and likely would not permit Slashdot to make such charges. And that's a shame, because I'd totally sign up for that. If they could bill my card monthly, based on my total views, perhaps that would be a bit less of a disaster (say, $0.60 / month), but we've still got a long way to go. Or, rather, the credit card companies still have a long way to go.
-Waldo
From my reading it's only a subscription if you wish to avoid the banner ads. Personally, I don't find banner ads annoying enough to pay to avoid them, since I've developed the fine art of ignoring or scrolling down slightly to block them. But it would be a good thing to have the option.
OTOH, there is good content out there that I would pay for. I'm not sure if user-contributed discussion sites will ever be able to transition to full pay-per-view since the whole worth of the site is the user comments - asking users to pay in order to contribute to an online resource is basically the dumb idea that Napster's currently having.
What we need is not smaller payments (micropayments) but bigger (or "chunkier") content. If I could pay $10-15/month to a central authority and know that I would have free reign to reload /. all day, a metered number of posts at k5, and get my daily online comics as required, I'd jump at the chance to support my favorite sites. But I don't want to follow the recording industry system and subsidize sites that I can't stand with my $10. My contribution has to go to the sites I actually want to support, and the user has to be able to specify that they want to be able to read some sites in an unlimited manner, read others in a limited manner (I only need so many Google searches per week, but I do need them), and specify that others will only be hit once per day, etc.
Your right to not believe: Americans United for Separation of Church and
I was talking about micropayments with a friend of mine, and he brought up the fact that there's an expression "nickel and dime you to death" for a reason. Lots of little payments are hard to keep track of, and they add up fast; if you view 1,000 bits of web-content that cost you a nickel each (like, say, browsing through archives of a comic strip), all of a sudden that's $50.00. He feels that people aren't going to want to subject themselves to a system where it's so easy to end up owing more than you realize.
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Editor Emeritus and Senior Writer, TeleRead.org
I've thought about this issue myself, and first of all I don't think there's one answer. Any complex question like this isn't going to be answered simply.
However, I believe there are several specific answers:
ACCESS: We've got a lot of free information out there - libraries, personal sites, etc. Or we can pay a small amount for a book then hand it around making it free for the borrowers.. People like this, people are used to this. If you want them to pay, they'd like to see a good reason as to why.
BACKLASH: Let's face it, we're tired of the RIAA, MPAA, DMCA, and all the other collections of letters that have been screwing with us. We don't want to pay because the money always seems to be going to a bunch of pompous, controlling a$$es. If people knew more money was going right to the folks doing the work, there'd be less whining.
INTERPRETATION: Cable in my area is basically information delivery you pay for. People understand that, but payments for content on line have been pitched very poorly, and usually when someone suddenly needed a buck to keep a site going. People need to see that paying for content (in one for or another), isn't unusual in the non-computer world.
SELFISHNESS: People don't want to cough up $$$ sometimes, even if it'll help keep a writer or artist in business.
ENTITLEMENT: People were used to all sorts of free net services before The Crash. They still feel like things should be free.
Well, those are my theories, my 1/50th of a dollar (US please, the exchange rate is pretty good).
"The Sage treasures Unity and measures all things by it" - Lao Tzu
There's a few big reasons people are reluctant to pay for "content" online.
One is that they don't have anything to hold in their hands in exchange for their money.
If I buy a book, I have a physical artifact which will last much longer than my lifespan.
I still have tapes I bought when I was in middle school.
I still have the original floppies from computer games I bought around the same time.
What do I get to hold on to if I buy a year's subscription to a web news site, for example? Do I get access to archives of that year forever, even if the company that made the site goes under in the next recession? Please.
Another big reason is that if people aren't thinking in terms of buying a "thing" they're thinking in terms of a service. We pay for plenty of things we don't get to hold onto -- electricity, cable television, taxes, etc. But the thing is, you're already paying someone for the "service" part of your net connection -- your ISP.
It's just not in the normal buying pattern of people to pay for content on a medium they're already paying for. You can get people to upgrade to a higher quality service (sure, I'll buy digital cable), but to pay for the very thing you're already paying for?
Not representing or approved by my company or anybody else.
The problem with most web subscriptions is that they're overpriced. The web was supposed to bring good content at a low price because there was no middleman or shipping. However, many of the subscription sites are "content" sites (Salon, WSJ, Economist) who want to charge almost as much as I'd pay for a paper magazine. And, let's face it, the dead tree version is a whole lot more convenient. If I could get Salon for $10/year, I'd sign up in a heartbeat. I'd pay the same for slashdot. However, for $30+ year, I think more carefully about what I'm getting, and I usually decide against a subscription.
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Forward, retransmit, or republish anything I say here. Just don't misquote me.
Don't believe me? Here's my PayPal experience. (PayPal being arguably the most popular micropayment system on the 'net).That's why I'm not using PayPal--I don't need to, and it's not worth the hassle. Most of the other micropayment systems online either require you to install some lame program that doesn't support my OS, charge steep transaction fees, or are just too small to be trustworthy.
What will it take to get people to pay for content?
Good, simple micropayment system. This is critical. Imagine if a brick-and-mortar store owner told you that you had to pay him in 1957 pennies, and nothing else would be accepted. You'd just walk out, unless you absolutely had to have whatever he was selling, and he was the only guy selling it.
Lack of free content. People will only pay for shit if they can't get shit free (easily). Duh. I've always wondered how all the pay porn sites exist when there are so many free porn sites, but I suppose people don't act rationally when they're horny and lonely.
Content worth paying for. Most of the content people look at on the net is for entertainment (I'm counting most news in that category--if you're not the freaking President, it's not your job to know what's going on). To be worth paying for, content has to be significantly better than TV. TV content is free (sure, you pay for cable, but that's like paying for your ISP, and you don't have to think about that, nor does watching an episode of Seinfeld cost you extra), and TV is a much higher-bandwidth medium than most people's internet connections. To be worth paying for, content providers either need to come up with some very good original content, or bandwidth needs to get better.
Reasonable prices. I am not going to pay the RIAA $2.99 for a single track at less-than-CD quality when I could either pay $12 Canadian (yes, that's right--our CDs are way the hell cheaper than yours) for the entire CD, or just download it free from Gnutella. I'll probably just not bother, if I can't get it easily for cheaper than a dollar.
What do you really need on the internet, that you can't get from a million sites? Weather, I can always look out the window. Web comics are nice, but not essential (although I did donate to Penny Arcade). Online technical support and product information should be provided free, and I'd avoid any company that tried to charge for it. Slashdot? I'd expect editors who can spell and fact-check before I'd pay for this (and it would be nice if they didn't ask such ridiculous questions as whether it's OK to burn private property of people who disagree with you). The only thing I'd pay for is Google. Think about it--if you can still remember back to the pre-Google days, remember how bad the other search engines were? Think about how much time Google has saved you. That's worth something. Not much else is.
I think the issue is INFOGLUT, both in terms of the number of sites and the expense of each one.
There are simply too many friggin sites out there to subscribe to them. Period. People here have alluded to what a pain it is to register and give your life history and to the "camel's nose in the tent" leading to higher and higher charges, but I think those are both symptoms.
The real issue is that I (like a lot of people I imagine) get my news on the Internet from probably 100 or 200 different sites at different times. It is CERTAINLY not worth $5.00 or even $1.00 per site per month to subscribe to all these. My opinion is that until there is some kind of aggregation model for these payments it will never happen.
Cable/Satellite TV is a good example. I pay $50 a month for my Dish Network and I get about 180 working channels for that (no premiums of course!). Would I pay $.50 a month to get American Movie Classics by itself? Hell no. But as part of a package, I buy it and sometime I might watch it if something catches my eye. But even though it includes things I don't want, it also includes most everything I do want and it is ONE bill.
Now that I think about it, those economics are probably about right. I pay $50 for 180 channels. Call it $5 to the aggregator, and it's $45 to all the channels, which are each averaging about $.25 a month per viewer then. Would I pay an average of $.25 a month for Slashdot, CNet, CNN, NYTimes, Playboy, Yahoo, ESPN, SciAm, Gamasutra, Google, and 100 others? Yeah I might if they were on one bill.
The problem is that no one is charging $.25 a month and no one will be able to make any money at $.25 a month either, given that they are depending on $10.00 a month to stay alive right now. Until the Internet content industry figures out how to fix this, they are going to be broke and people will not subscribe.
Crash
"The difference between theory and practice is small in theory and large in practice..."
I don't think people are as adverse to paying $0.076 as they are to having to deal with paying $0.076.
For myself I like the freedom that comes with surfing the web without having to worry about what my "tab" for a particular online session is. I don't want to have to read a ten page "agreement" at every website I visit to fully understand what I am going to be charged. I don't want to deal with sites that sucker people into paying a lot more than they think they are being charged (ala 1-900 numbers that charge $50/minute). I don't want to have to give a mini-biography to every site I visit so that they can bill me. In the end I don't care about the money, I care about the time and effort that goes into thinking about how much of money is going where.
The whole point of the web is free stuff. Period. Do you think your mother bought her iMac to pay for content? She wanted e-mail (communication for free!) and the web (information for free!). The thrill in the experience is the free stuff. Do you think you'd ever hear a first-time web user say, "Hey, and I can subscribe to all kinds of magazines on the web!," or "I can buy all the music I want on the web"? No way. They are there for the free stuff. We pay our ISP to have access to the free stuff. If stuff is no longer free, we'll get it in a more convienent form from somewhere else.
In particular, it seems whenever I pay for something on line, I have to
Whereas, when I buy a newspaper, magazine, CD, movie, or anything else offline, all I have to do is:
And of course, if the product I buy offline is defective, I can return it and get my money back. How many subscription web sites have a clear refund policy?
Leaving the question of quality aside (since most people's comments, including mine, aren't worth $.02 most of the time), paying for online content is inconvenient, invasive, and doesn't even provide a reasonable gaurantee that I'll get what I'm paying for.
I think that about covers it for me.
Why *would* I pay for content when I can get comrpable content elsewhere for free. People would rather not pay than pay, right? That provides a strong incentive for content produces to find a business model whereby content consumers don't have to pay. Advertising is the obvious one, but there are others.
As long as someone's making a go of it offering free content, it's going to be pretty hard for other people in that same market to charge for content without some kind of strong differentiation (like HBO versus CBS).
I don't see why that's so hard to understand.
-b
If I wanted a sig I would have filled in that stupid box.
No, we won't pay for Slashdot.
There is the continual feeling that the next click might yield what we am looking for. But it could be dozens of clicks away. For some reason, probably because of conditioning, we choose to gamble time rather than money.
Donate background CPU time to fight cancer.
I believe this is what you're referring to?
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"Open source is good." - Steve Jobs
"Open source is evil." - Microsoft
Do a websearch. Even with a good tool like Google, most of the time (in my experience) one wades through a lot of "crap" (either real crap, or good stuff which isn't doesn't address the question you're really trying to answer). Eventually, you find what you're looking for.
Now suppose that pay-for-content was the usual model on the internet. If you had to pay a couple of cents for every useless web page you looked at during your web search, while you were trying to find that gem of the page that made the whole thing worth it, you'd be paying for a lot of stuff that you didn't want to be paying for.
What would happen? People would stop doing web searches. People who go with "known and trusted" sources for content-- i.e. the AOL/Time/Warner web pages, or other Megacorp-blessed web pages. If you have to pay for all your content, you will be a whole lot less willing to wade through pages looking for the unknown gem than you will be if you're paying a flat fee for all content (which is effectively the case now, where you just pay for access). This will squelch the greatest thing about the internet, which is that anybody who wants to can put something up there for other people to see. If nothing ever gets seen but the Megacorp-blessed pages, then the Internet is just a slightly faster way to get the same thing you get from Network TV. That would be sad.
Now, perhaps this isn't the real question. Perhaps we're only talking about paying for content for a few things-- coyprighted music, specific news feeds, etc. Well, fine. That might work. But a general "pay for content" model will only have limited success as long as free content is out there. Why should I pay for a subscription to "How To Get Your Hardware To Work Dot Com" when there are lots of people out there putting up web pages with hints and suggestions for getting your hardware to work? On the other hand, I did say "limited success". While I think that any system that tried to make all content on the internet something you pay for would fail, there are some things worth paying for. Indeed, I subscribe to a couple of webzines myself. It's not much-- to the tune of $15 a year or so-- but it is paying for content. But it's very very far from a model where all or even a significant amount of the online content must be explicitly paid for.
I *do* have something against micropayments. Micropayments mean always having to watch what you're doing. Each web page you download you ask yourself, is this worth $0.02 to me? I've been on a micropayment system, back in the 80's and early 90's on QuantumLink and GEnie. I hated it. By and large, I only used the "flat rate" sections of the services, and simply avoided the "pay for time" sections of the services. There was stuff I was interested in there, but I didn't want to have the watch the clock the whole time I was using it. It ruined it for me -- having to watch the clock made it simply not worth it. Micropayments are the same way. Let me pay a flat fee and browse all I want without worry, rather than having to keep making the decision over and over again whether to buy or not to buy.
-Rob
People won't pay for content because we're already trading eyetime for it. Advertising has always run the (non-book) publishing world. Do you think fifty cents a day covers the cost of a home-delivered New York Times? Three bucks for your newsstand copy of Playboy? Not even close.
All those ads for cars, cigarettes, beer and allergy medications... those are the things paying for your paper subscriptions.
Now bravo to the "online community" for filtering spam and coming up with banner-blocking proxys, but these is the same small percentage of people who tell telemarketers they wish to be added to the "no call" list and file to stop junk mail.
Just like in the print world, most consumers just live with the inconvenience of banners and spam, ignoring and discarding most of what they see. That's why nobody wants to pay for online content.
As for electronic books, I won't pay for them because I want my novels in print. Once the interface gets good, I might... then again, if MasterCard puts its logo at the beginning of each chapter, I'd be just as happy to let them pay.
This opnion has been paid for by an unintentional donation by my company, which shall remain nameless so that I may keep my job. Don't pay for it.
The frustrating thing is that I get several emails every day telling me how useful my site is to people, but tips don't accompany the emails. About 90% of the time a request for help accompanies the compliment. I'm glad that I help these people, and I really do develop the site as an act of love, not profit-seeking, but I have to admit it's getting old being told that my site is more helpful than the stack of books they bought ... but of course they probably spent well over $100 for a stack of books but don't send me $5 for the help I provided.
I started the tip jar as a "what-the-hell" thing. Now I'm considering taking it down because I'm worried that it's building more resentment in me than when I just didn't have it at all.
<IRONY> On the other hand, O'Reilly paid me $16,000 to write a book for them (including the final payment approving the final draft), then decided to cancel the book. So I'm not getting paid for content I do publish and I did get paid for content that wasn't published. </IRONY>
Miko O'Sullivan
Miko O'Sullivan
Now suppose this "information" is a series of nude photographs of Jill, Jack is her boyfriend, and Joe is the nerdy kid who lives next door. What does this tell us about Jill? About Jack? What about Joe? The content provider?
What conclusions can you draw?
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