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A Viable System for Micropayments?
KalvinB asks: "According to The Case for Micropayments, Nielson makes the case that subscriptions fence you in because you either pay nothing and get nothing or pay a large fee. I'm curious as to why a large fee is the only option. Perhaps in 1998 bandwidth was as expensive as gold but five years later I propose A Viable System for Micropayments and how to implement it. The cost can easily be calculated either arbitrarily or by determining the amount of bandwidth the average user uses per month or year. I'm curious as to how viable you think this system is and if you have any ideas for improvement. Mainly in calculating cost and accepting payments. I think the biggest obstacle to micropayments is a complete misunderstanding of the term 'micro.' In the article it's talking about paying several dollars per page at some sites. By my calculations that file better be 5GB or more. It's greed, I think more than anything, that's limiting it's acceptance. Sites don't want to charge a reasonable fee and people think their ISP bill is an all access pass to the Internet. The idea of actually paying for products they use and paying more than the product was produced for is suddenly lost when they go online."
So what was the question? :)
www.fastpay.co.uk
To send money to people, it's £0.30 a payment, payed by the sender and you can send upto £100 ($150).
thank God the internet isn't a human right.
P2P would come to a shuddering and screeching halt if people had to pay for what they uploaded to others.
I recently went to the site of some neat (bizarre?) screensavers for OS X called LOOPS, and noticed that they are now using PayPal to charge a very small fee ($1.50) to be able to download the very large savers. I think this is a reasonable system. I have been a PayPal fan for awhile, though...
I always worry about pay-as-you-go plans. It introduces randomness into something that, for me, needs to be budgeted for. "Oops, I left that ping running over night..." and the such. Kind of like my car lease (which I'll never do again since I love driving) - I always had to watch the miles...
I think that it will also introduce higher costs/byte because you are really paying for every byte. Where as in a pay-one-price model, sometimes you are the hog and others pay for you and sometimes you aren't.
In any case, neither is perfect, but a fixed price is the way for me.
Free the web...free the internet...I pay enough for the bandwidth to be on the web, never mind paying to use sites. Its bad enought that just doing a search these days turns up more sites that want to sell you a book or sometihng with the information your looking for...than sites that actually dispense the information.
Power Corrupts,Absolute Power Corrupts Absolutely, leaving one person(group)in charge is absolutely corrupt.
I hope this works. It will enable new classes of democratic occupations based on information products which have very small per-unit value.
fast pay
I currently pay for the use of FilePlanets exclusive servers. They charge 6.95 a month (less than the cost of a movie, or 2 video game rentals) and you get access to 100+k/s downloads. You can, however, use their public servers and wait in line for free.
Gamespot also offers members only access, as well as free parts to their sites.
When sites offer stuff I am willing to pay for, I will pay for it. However, we're not charged (usually) for browsing at a brick and mortar store, so why should we be charged for browsing through a web page of the same content?
In other words, if you are offering a service online, and you feel that I need to pay to use that, by all means charge me something fair (anything over 2-3 dollars a month for simple browsing is rediculous), but remember, most people are only going to pay for a few sites a month if we're using a pay to browse system, and most will go looking for the same thing on a free site, and you lose a customer.
After all, gamespot and IGN offer basically the same stuff, yet everytime I go to IGN they want me to pay, and as a result, I do not browse there.
Thats my rant, YMMV.
This is my sig. Its pathetic.
... is the right way to address this, not micropayments (which will never be economically viable without a syndicate-style clearinghouse that insulates the participants from contact with actual financial institutions).
Paying $50/year to subscribe to a site sounds like a lot of money, because it is. But if I could pay $100/year for ad-free access to all of my favorite sites on an a la carte basis, it'd sound like a bargain. That's where commercial Web content will have to go eventually. I can't imagine any alternatives that will meet the needs of both consumers and site operators in the long term.
It'd be nice if one or more of the major ISPs would offer a pilot program along these lines. Not necessarily MSN or TW/AOL; even someone like Speakeasy could make a credible effort at syndicating content for their members, IMHO.
Dahlmann tightly grips the knife, which he may have no idea how to use, and steps out into the plain.
What are these micropayments for, exactly? I read the whole damn thing, and I couldn't find any information about what exactly the fucking point is.
Also, I wouldn't exactly call it "viable" since the transaction fees on many $10 purchases (of what, I still have no idea) will generally be quite large. That's part of the reason why subscriptions for anything get cheaper the longer of period of time they're for.
As I see it, TV might be a decently analagous system. People pay for their cable bill, or in this case, their ISP bill. They then get content.
:)
Who provides the content?
The cable company, through both ads and charging for the service.
Since the ISP is the one benifitting from the content on the internet, one (self-preserving) way of keeping that content fresh would be to "give back" in some way.
Unfortunately, due to the nature of the 'net, this would add overhead to those "good" ISPs which want to contribute, allowing ISPs that want to give just basic service to run at a lower cost with lower overhead.
The other problem with this is that it promotes content that benifits the ISP -- somewhat analagous to how TV has been taken over by large corperate moguls, allowing only corperate consumers to have a voice except in very small areas (public access, for instance).
It's fortunate that the Internet can't be controlled in the same way as TV, but with webhosting bills and domain registration bills that quickly add up, I can see many people who run sites as a hobby eventually giving it up since it's an unnecessary monetary drain.
Perhaps that's how "good" ISPs could give back -- support the lowly webmaster with some cool content that's been overwhelmed... say, by a slashdotting...
Dragging people kicking and screaming into reality since 1996.
They'd have to have some damn good and unique content if they expect people to pay for it. The current models probably come from people who know little about the internet, other than the fact that you might be able to make money with it.
I hope it doesn't go the way of mobile ring tones though; at one point they were free and practically overnight every free site was shutdown and the only sites available started charging for it. Overcharging to be more precise...yup, it's greed.
Use MP3 downloads from besonic, about $90 for a year, or something like that.
I sometimes pay for music from besonic too.
thank God the internet isn't a human right.
I have been reading Otherland by Tad Williams and one of the most disturbing ideas presented in it (it is set in and around the 'net' in about 40 years time) is that large areas of the net will be paid for and if you do not have the money then you do not get in
This makes the net into something it should never have to be - A two-tier system
PayPal is good and should be replaced by something better and less likely to break - A worldwide system for 'tipping' - But paying to get into areas of the net? - Chilling
It's coming.
They've got the userbase, and with the Ebay name behind it, they'll have the hype necessary to do it. In a few years, you'll just keep your PayPal client connected to your bank account and you can add/subtract money as necessary. Pages will cost a fraction of a cent, and since Paypal is only making occasional charges to your credit card, there won't be that big hit that's keeping many away. Paying $10 a month for content will be common.
Buried in the middle of the paragraph, HERE is his question:
I'm curious as to how viable you think this system is and if you have any ideas for improvement.
I think a better name for a micropayment would be "a tip." Or maybe a tip is a type of micropayment. I have a friend who provides small web utilities and rather than make people sign up for these them, he gives them away for free to see if people would use them. I'm sure people would understand instantly what tipping meant if he added it to his utilities, but the same people would probably stratch their head when presented a micropayment dialog.
A programmer is a machine for converting coffee into code.
Essentially, automatic micropayments: Attention-based commerce
Since so many pop-ups that appear when browsing major sites are stored on third party servers, it would seem that it would require more bandwidth on the part of the user that is viewing the page than the company that is serving the page. Sheesh.
Exactly how is this a viable system for micropayments? What the author has done is provided a how-to for using HTACCCESS to restrict user access on Apache web sites.
There's no mention of how to actually collect the micropayments, just mystical hand waving about rocks and hard places.
This article could have used just a little more substance...
If you're looking at a wholesale price for a 20Gb per month account of being around $500 to $1000, then that's $25 to $50 per Gb would be about a quarter of a cent to half a cent per page.
Never email donotemail@WeAreSpammers.com
..the only problem not already solved is how to efficiently and securely perform the actual transaction (a couple of cents get transferred securely on demand, incurring minimal/no charges and minor amounts of fuss). The rest was always obvious.
But that's the bit you haven't really touched on. Paypal.. yes, we all know about paypal already, but (a) no-one sensible would trust them with much money and (b) it's not very efficient.
I think cellphones could hold part of the answer, over the next few years. A cellphone number is a unique user ID with connectivity that comes with a billing system already designed for micropayments.
There's a lot more to calculating the amount of "worth" an article or page has, than just bandwidth. In fact, I'd say bandwidth is the least of your worries. The whole premise of the poster's article is based on, "The biggest problem facing webmasters these days is the cost of bandwidth". This may be true for small websites but not so for larger ones.
What is going to pay for the people maintaining site? What is going to pay the people writing the articles?
The author's idea of using the htaccess file for user accounts is horrible. It's great, again, for a very small site, but fails horribly when you get more than 25 users. You can't disable them easily, you can't group them and the file access is slow. The encryption for the passwords is particularly weak.
The author doesn't even include how to account for usage, taking payments, etc. His ineptitude is complete with this statement: "I'm not aware of any software available to parse Apache logs and report user information so I wrote my own." I guess he's never heard of the great software program called analog.
*sigh* This should be called, "The Total Idiot's Guide to Setting Up Apache for Basic User Controlled Access"
Dodger_
Whatever happened to people putting up web pages for fun? Is the net to become one big corporate controlled money making machine?
The "Viable System for Micropayments" article describes how to setup user accounts and provides a program to parse Apache logs to "... allow you to easily see how popular an account is and whether or not you need to take action. " Plus, for his collecting payments, he says use PayPal or VeriSign. Most of the actual "system" is not automated at all. How is this news at all? What is new about this system?
Forget the whales - save the babies.
You keep using that word. I do not think it means what you think it means.
Lemme get this straight, you are basically charging all of your customers MANUALLY based on your apache log files, through a thrid party billing company not set up for this? Doable for a few dozen users, but I can't imagine manually creating 1,000s of bills for a few pennies each.
Call me back when your site integrates with a true automated micropayment system that gives users flexibility and the ability to decide to view pages in advance based on cost - not an after the fact credit card bill.
Think outside the... Hey, where'd the friggin' box go?
"Sites don't want to charge a reasonable fee and people think their ISP bill is an all access pass to the Internet. The idea of actually paying for products they use and paying more than the product was produced for is suddenly lost when they go online."
.AVI's for a reasonable price, they'd find themselves making quick/easy cash.
Um no, the problem is not that people don't want to pay for products. The problem is that there's little to no value in most content on the web to pay for. Let me put that in even simpler terms: The web has virtually no content that's worth paying for. It has nothing to do with the idea that everything on the net is free.
Don't believe me? Then explain to me how porn is able to thrive? Porn is delivered for free in generous servings, yet people still whip their credit cards out and buy stuff. Why? Because the net provides what they want. Imagery/Video + the privacy of their own home.
I'm shocked that the MPAA/Broadcast hasn't looked at how successful porn has been on the web and not realized the potential earnings they could make with their content. If they sold copies of TV shows using DivX
Anyway, my point is simply that the demand is there, it's the supply that's missing. It's not the other way around like the author is suggesting.
So that this actually works we need a new bank-like network of entities that will all be able to transfer money from the user to the website. The micropayment itself is just a small counter. Websites don't receive a payment for each webpage but instead receive an aggregate transfer every day (for example). This can't all be done by one entity (Paypal and Passport come to mind) because you don't want the mechanism to transfer money on the internet to be a monopoly. The ideal setup would probably be some major traditional banks stepping up and providind this service.
Pedro Côrte-Real.
No, and you can follow the tollbooth logic - the fact that I pay taxes which go to building highways doesn't save me from having to shell out some moolah at the tollbooth. But until you educate people otherwise, then yes, as far as they're concerned their ISP bill is enough. After all, everything used to be free on the Internet, eh? Why should I start paying now?
User (customer!) education is the key. But there needs to be some sort of paradigm Billy Bob Joe can relate to in order to shell out some of his hard-earned money.
What that is of course I have no idea.
The success of micropayments will also lead to another interesting scenario: consolidation. Instead of there being 7 free hardware review sites you'll have only two. Just like the real world, commercial pressures and competition will eventually do away with diversity. I'm not making any judgement on whether or not that would be good. That's fodder for another thread.
The flip side of course is bandwith becoming extremely cheap, which is also a possibility.
One thing I don't want is to pull out my credit for every site. I don't mind paying a few cents to view a web page, I just don't want the hassle of going through the payment steps. If someone had a system where I pay $10 to some micropayment corp, then I could view Salon, slashdot etc and they would just deduct the cost from my account. That would be great.
http://www.windmeadow.com/
I like your solution, but I think it would be more effective if you took a little bigger approach. Instead of using Verisign or Paypal for the actual transactions, do it yourself. This is of course impractical for small discrete payments, but if you implemented it as a certain number of page views for $10 (like Slashdot did) it might be feasible.
What I meant by thinking bigger is to record page views across several sites web users visit. That way I can pay $10 and get 1000 page views at DevZone, WDVL, 4GuysFromRolla, jguru, and other sites who chose to participate.
Well well well, it seems to me that the entire industry has gotten too caught up in the dollar amount. I mean does the internet really cost anything? The military developed the protocols and when they went public, they were enhnaced. Most of the ideas for improvement were developed by no name programmers who were too quick to publish it and it got stolen(sound familiar? Can we say Apple, M$ anyone?). I personally fell that if a site is charging just to use it, then that site should be shut down. The internet has gotten so large that there's no way that I'm willing to pay for a service that I can find just as easially free... better yet... a service that if I really wanted to use, I could develop myself or even steal.
That does sound interesting, but for larger scale check out Clickshare (http://www.clickshare.com). They have quite a robust system that allows payments as low as you want. The system is mostly being used as a way integrate subscription access control and billing without much change to your existing site, but it works fine for article sale and whatnot.
:)
:)
It isn't really a viable solution for places that wouldn't have a total charge to the user of over a few dollars. Basically no Credit Card system would be due to the charges involved from the cc companies. But clickshare can conglomerate a user's charges and only run them every couple of days or say, once a month.
It's quite ingenious, as it allows you to set up pricing tables and such for different pages or sets of pages. Best of all runs on linux or windows servers and requires no client side code or javascript (not sure about cookies).
There is a lot more to clickshare, like allowing sites to sell stuff without having to register users. Also sites that do register users can make money off of their users purchasing at other sites. Check out the website if you are interested. clickshare
Also, Paypal does have a subscription feature, many sites use this, for example, hotornot does, but I am not sure how they integrate their usernames w/ billing. You'd have to ask them
DISCLAIMER: I used to work for clickshare
http://monkeyserver.com --- weeeeee
www.warcry.com is basically the same unless you're a EQ player yet we try to beat out both sites and were free also.
The idea of actually paying for products they use and paying more than the product was produced for is suddenly lost when they go online.
The cost to produce a product should have no bearing on the selling price of the product. Neither for the buyer or the seller. The buyer should only decide what they are willing to pay for what they will receive in return. The seller should price the product so as to maximize revenue. If it turns out that this interaction results in a negative profit, then the product is not viable and the seller should find a new business. If the seller just calculates his cost and adds 50% to get a selling price he'll never know if he's leaving money on the table, or wasting time on a losing proposition.
Terry Layne
Portland, OR
From the article:
As you can see by the chart found on the main page IcarusIndie has been running at 60-80% capacity and growing. It became necessary to find a way to either cut bandwidth usage or make money to increase available bandwidth.
Suggested short-term solution: don't voluntarily post a link to your site on Slashdot.
Its hard to see how to do this with an open Internet. Perhaps if the ISP also hosted ecommerce sites, they could have an arrangement similar to this - where the ISP would perform billing and collections as part of the hosting arrangement.
Hate to say it, but sometimes these older closed online services could do things better than the Internet.
If your children ever found out how lame you are, they'd murder you in your sleep
The term micropayments has been around in theory for a while, although what I renember sounds rather different then what is being mentioned here. In my way of thinking micro is in the pennys realm. Want to read the next newyorktimes article from slashdot? After signing up it will cost you .5-10 cents (yes, 1/2 a cent) for you to read the article or perhaps all day pass to the site.
Consider it the replacement of banners only this time the webmasters actually get money.
Th reason we havn't seen this before is because CC transactions are way to expensive (and there is no reason for them to become any cheaper). What would need to happen is a paypal like system where they hold your money while you spend it on affiliated sites.
I bet this will start with porn sites first. Yes they have it already but I dont think its on a micro level yet. Imagine $.50 for 10 minutes (even though most people will only need 3 minutes...) or 1/2 cent for high res images. Anyway, porns been a great inspiration because they actually make money (so i'm told) it would be nice to see the industry start a commerce revolution.
Characteristics that cause micropayment methods to fail:
Business people are self-destructive. Every one seems to dream of making a billion dollars overnight.
Technical people aren't business people.
Why not charge people's credit cards a minimum fee like $10? Then you could refund the balance in case someone did not spend it all and wanted to close an account. The account could keep track of the amount and reason that micro-debits were made. This has the advantage that you hold the money while the purchases are being decided.
Meanwhile, little things keep eating at you. Once you get any size at all, figure it costs a good $US0.50-1.00 to deposit a check (some bounce, and then you have to pay some fees, plus you have to pay some loser $8/hr to actually go to the bank and stand there while they handle three thousand checks. Manually. Until you get big enough to contract out your check handling, and then they still take their toll). Writing a check is expensive. There's a reason small restaurants only take cash and even big ones won't take checks (and it's not just tax evasion (grin)). Meanwhile, credit cards are going to cost you about $US0.40 per transaction and around 6 percent on top of that, unless your fraud rate is unusually bad. You add up all the skimming and it's hard to make money.
I'll also suggest that if bandwidth is your biggest expense, you aren't offering content worth paying for. Not a flame at all, just a thought.
I run a couple of information sites. I found that selling a product releated to the information helps defray my costs. I haven't gotten where I can support my family and myself, but I do have a nice set of co-located servers and it helps pay for Christmas as well.
-- Many men would appreciate a woman's mind more if they could fondle it
If one micropayment per day as defined in the article adds up to US$10 per year, and if this yearly payment would prevent adds from being displayed by all the sites registering with the scheme (because they obtain an annual cut of all those $10 contributions), then this sounds like a very appealing package indeed! Roll on aggregated micropayments :-)
Notice that this doesn't prevent per-site micropayment schemes from coexisting alongside it, when there are special services or products also being offered at the sites.
"The question of whether machines can think is no more interesting than [] whether submarines can swim" - Dijkstra
Nielsen argues that there's a need for pricing between free and full subscription. He advocates micropayments _precisely_ to create that middle ground.
Then you step in and a) criticize Nielsen for not recognizing the possiblity of small payments , b) propose an alternative form of micropayment in which a significant fee is charged in return for year-long access and c) offer some sample code that AFAICT offers a primitive account tracking system.
Unless this is just a troll, in which case I applaud its subtlety and congrtaulate you on getting it to the front page, your idea is really unclear. It's flattering that you think you can show me some C code and Apache configurations and expect me to understand the point, but you need to make it clearer so I can tell which one of us is completely missing it.
What I'm listening to now on Pandora...
A question on that -- do the authors of old articles get any more compensation when their material is effectively "sold" a second time (which is certainly the case in JavaWorld). In England, Robert Fripp won a very significant lawsuit on the issue of artist compensation when the back catalog of EG was sold to Virgin and BMG without the bands getting a dime at first.
"But remember, most lynch mobs aren't this nice." (H.Simpson)
-- Joe
An all-or-nothing pay-scheme works, but it's called a bookstore. Secondly, I have a problem with pay-as-you-go pricing, because typically, on the internet, I'm never sure where I'm going.
To clarify, in my view, an ISP charges you for general access to hardware, i. e. the cost to view a web-site in say Australia is the same cost you would pay to see content at usatoday. The micro- or macro-pay schemes don't eleminiate a hardware charge, so I would essentially pay MORE for LESS. The real problem is the 'AOL Mindset', that once I pay this connect charge I have the internet to myself, unless a site requires a credit-card (ahem). Look at Salon.com, it's obvious that no one site has a lock on insight and editorial content (well, maybe slashdot), but with all the freely available content on the net, it's hard to put up a door charge.
"This isn't a study in computer science, its a study in human behavior"
The guy is proposing a subscription system, not a micropayments system. The only thing which can be remotely seen as novel is the idea of charging for the consumed bandwidth instead of the usual monthly or annual fee. This is not what I would call a micropayments system. You still pay in one lump sum to the site owner.
This is just subscriptions. But the author thinks people don't like paying subscriptions, so he decided to call his subscription a micropayment-equivalent.
From a large corporation, I'd call this scummy and dishonest. From a person, I'll simply call it dishonest.
The point with micropayments is that I can visit a pay site once in a year, and only pay 3cents for that individual visit. (With, of course, a transaciton cost of about $2 on that 3cent bill.)
KalvinB's system is good only for long-term site users. Which admittedly is what a site wants, but it would be nice if he were honest enough to say that's what he's doing.
I will admit, the idea of subscriptions that only pay bandwidth costs is a reasonable thing to do. But it isn't a replacement for advertisements. It is a companion to them, to make the advertiser willing to pay more. You have the same deal with a subscription to newspapers... Your cost for a subscription to the New York Times or Washington Post just about covers the raw costs for the paper - the processed wood pulp - only. All other costs of running the business - salaries, equipment, general overhead - are paid by advertising.
You are paying for the privelege of allowing the paper to sell access to "people that are willing to spend money" while yourself getting access to good quality news coverage.
If you get something that's worthwhile to you, that's fine. But don't think KalvinB's thing has anything to do with micropayments.
This is my sig. There are many like it but this one is... Oops. Frank, I've got your sig again! Where's mine?
I use GameSpot a lot and paid for a subscription to their "Complete" service. Another poster mentioned GameSpot, but didn't point out that IGN and GameSpot have a somewhat different model for subscriptions.
At IGN, you have to pay for the new stuff and eventually it ages into the free section. (Some stuff may always remain pay-only. I don't know.) At GameSpot, most everything is free for a limited time, but then ages into the pay-only archive.
Of the coverage I've read, I prefer GameSpot, and so chose to pay for that service.
Because I enjoy playing games on older systems and games that have been out for a while on newer systems (see my site), the pay-only archive at GameSpot is useful to me. They go back to the Saturn and PSX with their reviews, and these have made for some reasonably good reading and research of games to try out. Also, if I'm considering a game in Sony's cheapo Greatest Hits lineup, then the full review is probably in the pay-only archive.
The GameSpot model is friendly to the daily reader (free access, albeit with adverts) and the long-time reader (no adverts, old content) who doesn't mind paying. I'm not sure who likes IGN's model. It's worth noting that IGN's reviews are often posted to USENET by a subscriber when they're initially published online and only accessible to subscribers.
Anyway, that's all I wanted to say. Different models, and a distinction that I think is worth looking at, especially in the long term.
Curmudgeon Gamer: Not happy
If micropayments were feasible, they would have caught on already. The problem with micropayments is that as the amount of payments gets smaller, the number of transactions goes up. This brings with it a necessary increase in the cost of processing transactions due to staffing, processing, database storage, etc.
This is most obvious in services who use credit-card transactions. Many brick-and-mortar stores won't take credit card transactions less than $3 or $4 because they have to pay Visa (or whoever) so much per transaction. Thus, making Visa transactions for less than $.01 payments is ridiculous, unless you can find someone to keep track of all your transactions for essentially free.
If you can't, then you then either have to collect money ahead of time and keep track of usage yourself (subscription), or track the usage and charge at the end of a period of time (billing).
And then we're right back where we started...
Every once in awhile I will pay my phone bill for more than the amount due and wind up the next month with a bill for a couple of cents. They actually spend the 37 cents or whatever it is now to send me a bill for 2 cents. That's 35 cents that they are not getting back not to mention processing fees and whatnot. The overhead on something like that would kill you if you tried to send out a small bill to a lot of people (even if it is over the internet). I just can't see this system working right now unless the amount due is enough to cover the overhead and make a small profit.
--
"I've figured out what's wrong with life: It's other people." -Dilbert
It's greed, I think more than anything, that's limiting it's acceptance. Sites don't want to charge a reasonable fee and people think their ISP bill is an all access pass to the Internet. The idea of actually paying for products they use and paying more than the product was produced for is suddenly lost when they go online.
Like you wanting consulting on your idea from the slashdot comunity for free?
As x approaches total apathy I couldn't care less.
If I ever meet Scott McCloud, I WILL KICK HIS ASS!
So it's less than the cost of Z. So what? It's not Z, it's not even remotely like Z, so why do we care that it costs less than Z?
Buy this car! At only $25k, it's less than the cost of a super computer or three trips around the world!
When I pay $8 for a movie, I get to watch a movie. If I rent two games, well, I get to play two games for a few days. But when I subscribe to FilePlanet, they let me download files. Fast. Files that I can usually get somewhere else, or can even get from FilePlanet itself but slower.
Now, if these files were only available from FilePlanet, and if they let you play the newest game for a few days or watch a new feature film, the analogy would be good. But they don't. They're promotional trailers, or crippled demos. And I can get them elsewhere for free!
Micropayments would make a lot more sense here, I think. A few cents for the convenience of not having to look somewhere else. But don't insult my intelligence by suggesting that it's less than the cost of a movie.
is the 'payment' part - people just don't want to pay for intangibles on the Internet.
;>
I mean, hell, would -you- play for Slashdot?
"Sites don't want to charge a reasonable fee and people think their ISP bill is an all access pass to the Internet. The idea of actually paying for products they use and paying more than the product was produced for is suddenly lost when they go online."
You know, its thinking like this that have made the world full of greed and corporate robbery and gouging.
Yes, there is some content out there that should be charged for - and it already is charged for. Then there is content that should not be charged for - and its not.
"premium content" as some site like to call it (i.e. CNN) is just that. Content that is available upon subscription to that service.
When the article states "people think their ISP bill is an all access pass to the Internet" thats dangerously close to the MPAA and RIAA thinking that. The thing is that some people just need to get lost when they want to charge for every thing under the sun.
I am all for people and companies making money - but please, you dont need to charge for every god awful word you write or post on the net. Get over yourself. Your content probably isnt even worth 10 cents.
Value of content is something that seriously needs to be adressed here. The value of an item is based on its desirability to others - the more desirable the item the more its value.
Defining desirability is much more difficult. For example - I do read CNN.com, I rarely watch CNN on TV, and I never would consider paying for CNN's premium content. Whenever there is a story that is in the premium only section, I dont see it - and I have no problem with that. If CNN decides to charge for *all* content on cnn.com - I just simply wont read it. so I guess their content is as desirable as they may think.
now - back to the all access pass idea. OF COURSE I think that way. I pay more for internet access than I do cable TV. I have some hundred plus station on my att digital cable (hate at&t) and I pay a lump fee to see all of them. I dont pay for "Premium CNN" via cable. Why would I consider paying for it online?
anyway - all these fools that think they are going to somehow revolutionize (read enslave) the internet and make us pay for every click of the mouse should just take their greedy asses and screw off.
We certainly dont want the internet to become modeled after the cable tv media structure.
You've essentially laid out a plan where people pay to get access to the information on your web host. That's been done. It's called subscription. The only caveat you've added is that some subscribers are complaining that they are paying the full $6.95/month (as an example), but only feel like they are getting $4.95 out of it each month.
At least two viable solutions to this problem:
1. Do like the news servers do, and charge a per-month fee for a maximum band-width per day limit. For example, you'd charge $6.95/month for 50Meg per day, but $12.95/month for 500Meg/day.
2. Deliniate your content into two or more sections. For example, 1) FREE, 2) Standard subscription, 3) Premium subscription.
Bottom Line: People are willing to pay for what they think is valuable; charge them for the information, not the pipeline that feeds them the information. Remember, Inkjet printers are almost free, but the cartridges cost $35 a piece, FOREVER!
Error:
"It's greed, I think more than anything, that's limiting it's acceptance..."
Greed? Heaven forbid that content providers should expect people to pay for the content and not just the bandwidth!
Writers and artists like getting paid for their work, not to mention the costs of the computers, networking equipment, sysadmins, network engineers, security techies, and so on. None of those people work cheap, because even in a bear market, there is still a huge demand for people who can keep the computers running.
People think that the internet as a medium somehow cuts out the expensive middleman simply because there is not storefront; all the internet really does is switch to a different middleman, and that middleman is not necessarily cheaper or more efficient right now. Micropayments is a stupid system, because charging people in tiny amounts will never really generate the revenue needed to cover the incredible costs of online media.
Shhh...Dont tell anyone. We dont want the *bad* people to know that by controlling bandwith that they can control p2p, or at least slow it down. Cuz' when Johnnies dad in Butt Plug, Alabama gets a bill for $400, because Johnny left Kazaa running. I think that Johnny will be limited to what he can do on the computer, or not have Inet access any further.
Its stealing no matter which way you cut it. Just because you dont want something to be true doesn't mean that it is.
An overwhelming majority of the transactions online are credit card. If you open a merchant account and get setup for credit card authentication, you'll find out why micropayments on the web STILL don't work. First, if you're average transation is less than $20, they take more money. Instead of paying 2% of your income in CC fees, it will go up to 3%. Given that micropayments are usally targeted for markets with very small margins, this is not acceptable and the powers that be, don't care. But don't forget to add insult to injury. Telephone sales are charged more for CC authentication b/c there's more trouble with those transactions. But if there's trouble with telephone, the internet must be twice as troublesome, thus a yet higher charge. For micropayments, or just for keeping the average joe form doing business, the costs are to high for the CC companies to be bothered with the business of the serfs. If they were more cooperative and helpful for non-profits, I'd be more understanding.
None the less, work out all the other issues, and you'll still have this one to work through. The idea of a syndicate has been mentioned, and that's one great approach - one charge, many members. I just don't have hope that any of these ideas will gain critial mass.
Democrats and Republicans only disagree about how to enslave you
Was this article written by a thirteen year-old? All this does is show you how to configure apache to make people type in usernames to browse your site, and then suggest that you charge the people who are using it. Well, the porn industry (and everyone else) has been doing this for years! The difficulty in setting up a micropayment scheme is not in configuring apache and writing visual basic scripts, but in making the payment mechanism convenient and non-intrusive. Also, there is a difficult social problem in convincing people to pay for web content. None of that is covered here, and that's what's needed in order to have a viable micropayment system.
.htaccess. At least use those same controls to limit access to the crazily-named one.T F-8&q=apache+log+analyzer)
Anyway, here are some obvious problems with what is there, even:
- Why change the name of the htaccess file? Apache by default makes sure that nobody can download a file called
- It's a really bad idea to use Visual Basic's deterministic Rnd function to generate passwords. (!)
- It's easy to use xcmd or bash or perl to make htpasswd read from a file, just like his program does.
- No programs around that analyze apache logs?? Holy crap, are you serious?? (http://www.google.com/search?hl=en&ie=UTF-8&oe=U
I subscribe to a local paper, and have it delivered to my home daily . I pay a reasonable flat renewable fee. Additionally, I buy different newspapers on an as wanted/neeed basis. If there is a particular article or writer featured, I cough up my $.75 and buy the paper. I do not care to subcribe.
Many online ventures attempt to promote revenue generation through subscription or micropayments. I have seen many sites mismanage the process and alienate their potential clientele. The key to success is providing unique, original content...or porn. Additionally, many people believe that net content is less "valuable" than print media and are less likely to subscribe whilst screaming "FREE" internet.
I am me...I think
I like this system!!!
,I don't like the idea (personally) of having to pay to view web sites, but from a business point of view, this sounds good! The people that play my games do EVERYTHING they can to block the advertisements that we put on our site. We don't charge them to use the site, but viewing the banner ads is apparently too much to ask.
... although I think you'll see bandwidth prices bottom out since no one will be using the 'net then :)
I could actually make a few dollars from the games m friends and I developed at www.coldfirestudios.com.
This idea has serious potential!!
No
I don't like the idea of having to charge people to play my games, but if the "whole internet" moved in that direction, then it may not be a bad idea
HallmarkOrnaments.Com
Do I get to pay for those annoying popups also?
How many times have we heard: "If the content providers out there would put stuff up that is worth paying for, I'd pay."
Who has got sites out there worth paying $10 for anyway? And then how do you market it so the can kick the tires?
-- $G
The idea of actually paying for products they use and paying more than the product was produced for is suddenly lost when they go online.
I'm surprised that a sentence like that made it onto slashdot! This is, after all, the forum of "I want my mp3's for free but it's not piracy because 'information wants to be free' and I want my news for free to because, well, by golly, I've always gotten it for free!". This is not to say that I see anything wrong with being cheap (as long as the cheap action isn't piracy). I'm just surprised that based on the prevalent groupthink here (even among the editors, and deny it all you like, it's still a form of groupthink) that there would be any countenance given to a different opinion. In any case, when it comes to subscription services, I think the argument can be made either way. You can look at the newspaper and magazine model, where you pay a subscription for a particular content source, and they advertise to you. You can also look at the television model where you pay a subscription fee for multiple content sources and they all advertise to you, but outside the single fee, they can't charge you any more (unless you want PPV). I guess I don't see a problem with sites attempting to charge what they can for the services they offer, but those sites should keep in mind the concept of supply and demand...and with the multitude of 'free' sites out there, I suspect the 'pay' sites won't do quite as well.
What is your Slash Rating?
I appreciate that the author has taken the time to explain how apache can be configured to support restricting access to content , but the scheme he's proposed is a subscription model not a micropayment system - ..."I propose a simpler system; a small yearly fee (less than $10USD) which works out to a micropayment per day" . By this logic a magazine subscription is a micropayment system as well because your subscription fee is amortized over the term of the subscription agreement.
Also the authors conjecture that the real problem facing the acceptance of micropayments is the greed of site operators probably derives from his assumption that the sole cost of delivering content is bandwidth costs. This isn't correct for most sites that are providing content worth paying for. Salaries tend to be a much more prominent aspect of costs than bandwidth. Actually sites that offer truly high value content tend to have a relatively small audience and therefore minimal bandwidth costs.
The funny thing about this alleged Viable System for Micropayments is that it replaces the per-site micropayments by a single aggregated payment.
:-)
cough cough
Well, whatever works I guess!
"The question of whether machines can think is no more interesting than [] whether submarines can swim" - Dijkstra
Maintaining individual subscriptions to everything I like and want to pay for on the internet is unworkable. I specifically don't sign up for thing often not because of the price, but because of the aditional overhead of managing yet another subscription (which card did I use, when do they bill me, how much, is it auto-renewed, etc...)
The current situtation is something like being forced to subscribe to every cable channel you watch individually. It would not be workable, as each channel has a radically different value to each individual. It's the same way with web sites. For example, byte.com just went subscription. I read it only for Jerry Pournelle. Now Pournelle is an interesting guy, but paying $12/yr for his column alone just isn't worth it (I don't care about any of the other columnists). Similarly, Imagine if every cable channel cost $10/year, and you had to subscribe individually, and each station handled it's own billing seperately. Sure, I like the Food channel, and might occassionally watch it, but is it worth $10/year? (TNN might be, for the ST:TNG marathons alone).
This is why your cable provider serves as a content aggregater, mediating the different values each customer places each component of it's content. As long as costumers are satisfied with the whole package, for the price they are paying, it doesn't matter if one is an HBO freak or the other is a CNN freak. They balance each other out and both HBO and CNN can pay their bills.
This is why ISPs need to become more like cable companies. They should offer packages which provide pre-paid subscriptions to various high value, or value added content. I could sign up for the news-nut package and get WSJ online, CNN streaming coverage, etc... and it all just goes on my DSL bill. Add in high quality (and add free) internet radio and streaming video and I'd be a happy camper.
This model would work, and I predict it will be the way it works in the future.
-josh
This doesn't mean micropayments are necessarily a bad idea, since such a system is potentially cheaper, depending on the type of resource and who's using it. I believe there is actually some experimentation going on in the insurance industry with "pay as you go" auto insurance; i.e., you pay based on mileage, the time of day you are on the road, and where you happen to be driving. A GPS-enabled transponder reports this information back to your insurer.
Obvious privacy concerns aside, this idea DOES have the potential to save some folks a great deal of money on auto insurance; it also has the potential to bost rates through the roof for others.
Roving Web-Teleoperated Robot
Why was this modded offtopic? I thought it was kind of funny...
tick-tock, tick-tock, tick-tock, tick-tock....
Woman's voice: Thank you for using Microsoft DotNet. Please deposit 25 cents to continue....
tick-tock, tick-tock.... 60 seconds later:
Woman's voice: Thank you.... Please deposit 25 cents to continue....
dochood
Linux would be worth paying for. So would HOWTO documents. But the fact is, the majority of the content online that is worth paying for is free through the generosity and/or moral values of the creator. and the rest of it is only viewed/read/used because it is free, not because it's good. Internet porn survives because men are addicted to T&A. They can get by without digital music without suffering from an unrelieved libido or having to go into a porn shop, which embarrasses many people. I don't know anybody who's embarrassed by going into a record store.
In SOVIET RUSSIA... erm...NSA AMERICA, the Internet logs onto YOU!
The original poster should read an economics book before spouting off like that. Oh, wait, this is /. ... Never mind...
This guy is asking us to pay for content. That is ok if your surfing the net for entertainment or information. But what if I am shopping an e-store? That is like Walmart charging an entrance fee. If you sell a product then overhead is factored into the cost of it.
And what of search engines? It can be argued that Google is an online Yellow pages and if you want to be listed in the yellow pages you got to pay. But Google also lists sites that aren't paying either.
Yes you could make the internet pay per view but I don't see how it would work and it would ruin the usefullness of it for most folks.
Slashdot, home of supporters of free software, free music, and free speech.Except for Moderators that disagree with you.
We have seen oh so many Micropayment schemes. Millicent, Digicash, Cybercoin, etc. etc. ...
Before you think you can do it better, read this to not repeat mistakes from the past
I hate to flame, but there's nothing on this page worth reading. It's full of text on how to set up an Apache server, followed by:
Collecting Payments
This where you find yourself between a rock and a hard place.
If you're going to post an article about micropayments, you're going to have to make the micropayments and the associated economics the lead of the article, not the tail. Important questions unasked:
* A system for refunds
* A system for letting people reload pages
* A way to get people to trust your payment system (i.e. what if I pay my $10 and you go out of business)
* The cost of doing this business
* Dealing with forgeries
I've never before complained about an article on Slashdot, but this is truly a waste of time.
Clay Shirky has written this excellent article against micropayments. His case is that users prefer Aggregation, Subscription or Subsidy as alternatives to continuously making decisions about content.
Assuming that small sites will not have enough worthy content to go the subscription route and that subsidy (i.e. advertising) is increasingly running dry, the only realistic option is Aggregation. I think that non-exclusive, subscription-based networks of affiliated sites are a much more realistic answer. If, e.g. my OSDN subscription would get me access to premium /., Freshmeat, SF, etc. content I would be much more likely to buy it. What if though an indy site could buy itself (with a % of user usage) into the OSDN network? Presto! profit for OSDN, convenience for its subscribers and potential revenue for small-fry websites.
Please, steal this idea now.After reading his description, micropayment it ain't! It's just yet another subscription system - charging $10/yr.
I suppose you could write some code that deducts factional cents per page view from the users account, but the user would still have to put the money in up front - and that's not a micropayment system.
All you webmasters who want a micropayment system are just going to have to wait until credit card companies get their acts together and build the system. Of course, with inflation $5 might be considered a micropayment by the time that happens.
you then *own* the magazine. You can store it, read it years later, cut it up and decorate your room with it, burn it for heat, whatever. Hell, in many magzines the ads themselves are actually valuable "content" worth both reading and saving.
If you buy the right magazines you can even store them for a while and then resell them for a profit better than what you'll get by putting your money in CD's.
A magzine isn't just "content." It's a *thing.* And it's yours. And it may well even be an *investment.*
There are damned few web pages even worth the saving.
Now look at newspapers, and format perhaps more akin to web pages than a magazine. $0.50 will buy you almost more "content" than you can absorb on a daily basis.
Tell me, how muchs is each *story* worth in a newspaper? Rather less than a penny. And you can *still* roll the paper up and use it as an aritficial log afterwards, or mulch your garden with it.
If the web really wishes to compete with print on delivering "content" on a commercial basis than it has to do so by offering better value at a *lower* price.
Having a *thing* is part of the value of print. The "content" of a web page is nearly worthless, the cost of delivering it is irrellevant to that.
KFG
They are the wave of the future, and always will be.
sulli
RTFJ.
I doubt that google could afford subscriptions to every web site to spider their content ...
.... it MIGHT make spamming cost prohibitive!!!!
:)
But even better, this would DEFINATELY stop those annoying email bots from collecting email addresses from web pages!!!!
This may not be the best answer to making web sites profitable, but may have indirectly found a way to keep people like Ralsky (the famous email spammer)from refreshing his spam email lists!!!
This just might be a good idea
HURRAY FOR MICROPAYMENTS!!! - they saved my mailbox!
(but made it too expensive for me to read email too)
HallmarkOrnaments.Com
When using a micro-payment clearing house (that also has a customer base), such as PayPal, what is the minimum threshold, for the micro-debit, that will result in a net-positive transaction?
/kristofer
a. This must include incremental overhead costs of clearing a transaction on PayPal's systems; compute resources, Internet traffic costs for this encrypted transaction and e-mail notification, data warehousing costs, data center costs, etc.
b. This must include incremental overhead costs for the merchant, including compute resources, Internet traffic costs, etc.
If companies such as PayPal would publish their "sweet-spot" ranges, it might provide some concrete direction that is beneficial for all parties, instead of arbitrary small numbers.
This is going to sound crass, but the biggest single reason that I know micropayments aren't ready yet is that the porn people haven't figured them out yet.
When I think about content online that I'm willing to pay some amount of money to access, porn makes it onto the list. Some other no-doubt worthy sites don't.
I don't want to pay $10 a month to access exclusive adult content. I want to pay $1 (or maybe only $.25 - some sites have "try free for a day, just givde us your Visa number" but that's a well-known scam anyway) and just get to the handfull of images/movies/whatever I visited the site to get. Basic economics... and it could be applied anywhere.
But the porn people have the most desired content online. They know it. They could make it happen. Either they have chosen not to, or they haven't gotten it to work yet (and I'll admit that I've not found a site that's tried), which tells me that either the interest isn't there or it's just not workable.
So, all I can say to the people screaming about micropayments is, if the porno sites aren't doing it, the rest of the web won't either. When they get around to needing to grow their market again, they'll make it happen, and suddenly the idea will be more palatable to everyone.
Comments?
-- I wanna decide who lives and who dies - Crow T. Robot, MST3K
1) Write "Ask Slashdot" asking a question that references what you want to promote.
2) ?????
3) Profit!!
Democrats and Republicans only disagree about how to enslave you
"The idea of actually paying for products they use and paying more than the product was produced for is suddenly lost when they go online."
People are USED to the current system. I would be weary of any micropayemtn system, as well as any other individual with common sense, if it required me to pay MORE than I am now for the same content.
Likewise I WOULD be willing to use this system, if I could get the same or more for less. Simple huh.
I think it is difficult because in the digital age..i'll say it again:
"Information if to the computer what matter would be to a matter replication device"
There is a virtual utopia of IP simply due to the negligable cost associated with copying and distrobuting any idea.
The obstacle to micropayments' acceptance is not technical, it is phsycological.
Spending money requires involved mental cost/benefit balancing. Essentially, am I getting something for my money?
That a micropayment is micro does not mitigate that this mental balancing still needs to be done for each micropayment made - there is a definite fixed cost that is not dependent on the amount of money being spent.
As it turns out, it appears to be easier to pay one, bigger, lump sum ahead of time and then not need to think about it again.
Micropayments are doomed because they cause too much mental stress.
The only place that I might be enticed to micropay for anything is compelling content, especially knowing that money is going into the hand of the aritst/writer/creator that provides it, and the payment is reasobable.
But paying for the amount of bandwith I use? Perposterous! We already pay way to much for broadband access as it is, and most of us have had our bandwitdth seriously capped in the last year. And in large part this expensive capped service exists because we lacks serious competition in broadband.
Compare our prices to Asia and it will make you weep:
Japan: $11/month gets you 11 megabits/sec
Korea: $25/month gets you 100 megabits/sec!
And these are flat rates!
**The capacity and growth of actual bandwith has far exceeded the exponential of processor speed. The current pricing structure in the US is Greed, pure and simple from Dinosaurs trying to hold onto power by enforcing artificial scarcity.
I highly recomment everyone read Support Telcoms Fast Failure
Planet P Blog - Liberty with Technology.
www.enthea.org
But maybe the solution is an ISP-by-ISP access rights.
For example, Penny Arcade has members content. Maybe they partner with Speakeasy or another provider, and anyone tracing back to a Speakeasy ISP has instant members access. Speakeasy would then pay PA a fee for each of it's members. PA and Speakeasy can advertise it, Speakeasy will get a few more customers, and PA will get more money.
Basically, the ISP adds value to their service by including priveleged access.
Just a thought.
And another one:
Why not institute a program similar to Adult Check? People are always saying pr0n-purveyors are the pioneers of the net, this seems like another area where we could learn something from them.
I suppose the crucial point of both of these suggestions is offloading the payment handling to some greater entity (because getting 1000 0.001 charges on a credit card statement is a lot more convenient than signing up for 1000 sites).
It talks about more than just technical reasons why to (or not to) use micropayments...
As some other people have pointed out, a 'viable' micropayments solution would involve a lot more than traking user bandwidth and billing accordingly. Micropayments have been proposed for all kinds of digital content, the price being determined by quality, bandwidth and demand. There are a few reasons micropayments havent caught on, but it boils down to the fact that its not very simple. To offset the processing overhead on transactions of less than a dollar (even transactions of $1-$5) you need millions of them. Who handles millions of transactions? big complaies (AOL, AT&T, banks). An independant network (a la Pay Pal) would work too, but it would probably lose a lot of money before ever reaching profitable volumes. So why havent the big companies jumped all over this? Big companies havent taken this on cause they dont think consumers will buy it. Look at what the slashdot response has been: "i like flat fee better". In flat fee, the people who use the most get the best value. Flat fee encourages consumption. In pay-per-use models, everyone gets the same value; consumption is limited not encouraged. "Do i really want to pay $0.05 for that article? naw, i'll save up for a coke". There are creative solutions, such as identifying high-volume customers and giving them perks or discounts, but consumers dont like intricate pricing schemes (at least I dont). Its confusting and you never know how much the bill is going to be. I think if micropayments ever catch on, it wont be bandwidth-based and it wont be content-based.
microcredits (pennies) won't be charged for surfing, but will be used for downloads, software, serverside apps, cams, streaming and support, etc ... the isps will bill you and the sites will submit bills to the approriate isp ... the only thing that keeps this from developing faster this is that peeps are too stupid and greedy as usual
I failed sharing, so I don't have an upload bill you insensitive clod!
.... wow!!
But my download bill
j/k
HallmarkOrnaments.Com
... you can't make micropayments because you're unemployed and aren't buying anything.
The page linked to has very little to do with micropayments, or the philosophy of collecting money for access to web content. All it is is a HOWTO describing one method of setting up access restrictions using a semi-automatically generated whitelist.
It's a trivial solution that would only be useful for trivial sites. How much are YOU willing to pay per year for access to a trivial site?
While people do currently think that their ISP bill is an all-access pass to the internet, that certainly seems like it is changing.
.50, 1.00, and 1.50 atm charges that get thrown in every month and make it hard to read my bill. Maybe a prepaid paypal type account??
I would *not* pay $6 or $10 or however many dollars fileplanet charges for access to their speedy servers, but I certainly would pay them a bit more than it costs them in bandwidth costs to send me the file just once (what, like 10c? probably a whole lot less).
Once this becomes a real problem, I think we'll start to see ISP's picking up the slack. As Broadband moves along and becomes cheaper for the ISP, they'll have to find other ways to add value. They could keep their $60/mo plan at $60, if they partner with future pay sites.
To the cable companies, in particular, this is a familiar idea (think "basic cable" versus "silver" and "gold" packages wich give you 200 more channels and include x number of premium channels like HBO).
Another problem with micropayments is how it mucks up your credit card bill. I'm already peeved with all the
Something like flooz would work well in this sort of area, as opposed to the buying-merchandise-money-of-the-internet kind of area (what a bad idea).
I think micropayments are definitely the Right Idea for the web, but I don't see how they could be properly implemented using current payment systems. Off the top of my head, I think a payment system suitable for micropayments would need (at the minimum) the following properties:
- implicit (yet secure) payments. The user should be able to configure their
(trusted) web browser to automatically make requested per-page micropayments to
a server if those payments are below a threshold (e.g., $0.001). The browser
can prompt the user for permission to make larger micropayments. It's very
important that the user does not need to intervene in the micropayment process
every time they request a document. Since a user can not read through the whole
source of the browser and anything else that might need to make payments,
perhaps the browser and other programs should call an external program to make
the payments, the user's `payment agent'. This would be a small program that
makes payments while following the user's policies and restrictions.
- extremely low (or non-existent) per-transaction fees. If the provider(s) of
the payment system are charging $0.10 to the payment receiver for each
micropayment, it obviously won't work. This essentially implies the next
requirement.
- contact with payment system provider(s) not required for every transaction.
If the server collecting micropayments must contact the provider(s) every time
a payment is collected, the system will not be feasible. The server should be
able to store up many micropayments and redeem them with the provider all at
once every day/week/month.
The digital cash folks have had many interesting ideas for payment systems that may satisfy these properties. Here are some links to check out:- http://ntrg.cs.tcd.ie/mepeirce/Project/Mlists/min
i faq.html
- http://research.compaq.com/SRC/personal/steveg/mi
l licent/millicent.html
- http://www.ccs.neu.edu/home/yiannis/pubs.html
- http://www.aci.net/kalliste/cryptnum.htm
- http://www.chaum.com/articles/list_of_articles.ht
m
Creating a digital cash system that has all the properties we'd like is a damn hard problem that hasn't be solved yet. However, cryptographic tools such as one way functions and PKI are very powerful. I don't think we've fully exploited their possibilities yet, so I'm still hopeful that a true digital cash scheme will one day be created.Banks charge a fixed fee plus percentage for monetary transfers, whether they are $0.05 or $50... this is why many supermarkets are charging fees or disallowing debit card transactions less than about $10.
Since transaction costs for "micro-payments" are extremely high relative to the amount of money transferred, none of these schemes are likely to ever succeed.
If transactions costs did not present a barrier, public acceptance would. Users, particularly Americans, generally prefer subscription or bundled items to ala carte -- even if the bundle or package costs the same or more than the ala carte rate.
Webmasters need to pull their heads out of the clouds and give up on micropayments. Users use free search engines like google to find free information on web sites. Nobody wants to pay for web-quality content.
Conformity is the jailer of freedom and enemy of growth. -JFK
Let's return to the way the Internet used to be: a collection of peers. Let me post my site without having to piss off Comcast. Let Rob post Slashdot with impunity. If there is content on the web that is worth money, chances are it is because someone, somewhere cannot host it by hanging it off their cable modem.
Let everyone be a publisher. Clearly, TCP/IP is set up for it. The nebulous 'they' have brute forced a client-server mindset on what is the original peer-to-peer network mechanism. I'd pay an extra $10/month or whatever the costs are for my bandwidth to publish what I want, how I want, where I want.
Such heretical statements from a person with an MBA you may be wondering? Yup. But I'm the same guy with an MBA who wondered how all these Internet startups got so much VC funding for having business plans that made the Underpants Gnomes look like Warren Buffet.
There's not much money in selling services. Yes, the US economy is mostly a service based economy. But how long will that last when, for example, customer service is being outsourced to companies in India?
The term 'profit' to an economist means money over and above what a fair market would provide. That's not to say there is no financial profit. Financial profit lets the entrepreneur eat and have a house. Economic profit lets you hire Emeril LeGasse as your personal chef and live in a house built by Bob Vila. What prevents economic profit? Information about the buyer and seller. Low transaction costs. That's why small sites can get by. The owners can eat and provide bandwidth. But they aren't going to be Bill Gates. That's fine. They aren't supposed to be (neither is Bill Gates, but that's another story:)
But as others have pointed out in this thread, my fellow MBA's are looking to become overnight millionaires. Until they give up that tact, it won't happen.
I dare you to mod up this garbled mess.
Jesus was all right but his disciples were thick and ordinary. -John Lennon
Are you suggesting, on Slashdot no less, that a single company collect your financial information and handle your access to various sites throughout the web?
Where were you when this place was freaking out about the (now slumbering) Microsoft My Services?
damn right isp fees are a free ticket to the internet. if people want to make money on the internet they better damn well be selling a product. and I don't mean a webpage. charging a dollar per page or even 10 cents a page is absurd. the internet is going to shit and its this kind of bs that add more weight to its fall.
if people want to start charging for downloads thats fine, but the internet is partially about freedom of information (with in limits).
people are left with either cheap dial up or slightly more expensive high speed. if someone does think they should pay that much money for high speed because they don't use up lots of bandwith then they should bloody well be on dial up.
As Clay Shirky writes, users hate micropayments: The Case Against Micropayments. Think about how much work they are for readers, content owners, content creators, businesses, administrators, developers, and others. Micropayments suck because they are not usable for anyone and they don't offer much economic benefit unless you have truly high traffic. Of course, if you have high traffic, you probably aren't a small player.
In effect, you have a situation where small web sites and businesses can't charge (e.g., blogs), medium sized businesses can sometimes charge for unique content (e.g., Consumer Reports and Fark can charge for premium subscriptions), and large organizations can charge if they aggregate content or offer unique content (e.g., Wall Street Journal). In the end, the vast majority won't be able to charge (most content is crap and not unique) but a few large organizations will be able to charge. Those at the top of the heap will make money, the rest will run around like rats looking for sloppy droppings. End of story.
How to Download YouTube Videos
This take on Micropayments was fine and dandy, but the real problem can be summed up by the fact that only one paragraph is dedicated to the payment *method*.
The problem of micropayments isn't really a technical one at all... the technology is easy. It's the economics of it that suck. I take credit cards over the web (not for porn, for software) and I can tell you:
1. There are *many* more chargebacks than in traditional retail.
2. It's not free to get a merchant account.
3. The current percentages taken by any reputable credit card (and even some not so reputable!) would completely destroy any profit I might see from Micropayments for content.
Unless you force people into using PayPal, etc. for payments, Micropayments don't make sense to me *economically*. And not giving customers choices in ways to pay doesn't make sense either. Been there, done that. Give people more options, you increase your customer base.
Sorry, you want to make a convincing argument for Micropayments, don't work on the technical or even the content (there's _some_ content out there worth it...) work on the economy of scale and the payment methods. Anything else is wasted effort.
The world won't end in darkness, it'll end in family fun, with Coca-cola clouds behind a Big Mac sun.
$10/year which works out to a micropayment per day - sounds like a $10/year subscription that's refundable for the days not used. Why not just use that model? Refund the user's money when they unsubscribe for the unused days. They're a bit of an administrative nightmare but it might be easier to deal with that than it would be to deal with micropayments.
.
Similar to buying advance cellphone minutes, another simple model would be to sell the user a certain number of bytes transferrable from your site, then have a script check each day which cuts them off if they're over, and they have to buy more minutes...err, bytes. The hard part is finding the right value that doesn't prompt the user too much for payments, but doesn't cost too much. Let them type in the number of MB they want. They'll type a bigger number if they use it too fast and it bugs them too much to buy more. Offer to refund any unused bytes (rollover bytes!)
A micropayment subscription to view a website should keep a running counter in the corner to inform you of what your bill is as you click each link. With the system above, it would tell you how many bytes you have remaining.
This task could even be offloaded to a client application which tallies the bytes for a given site, therefore relieving the server of these duties.
OTOH...
I know unlimited bandwidth is a myth, but I have two servers on CIHost at less than $100/mo and they offer unlimited bandwidth. I have countless sites on them, and have never had a problem. Sure, it's unlimited with caveats (no warez/mp3s/massive binary downloads) but if you're just hosting a content site with a few downloads it should be fine.
# Erik
Paul
Free the web...free the internet...
I'm convinced that people like yourself really don't care at all about freedom, but rather preserving the Internet and your comfortable little cocoon. If you DID care about freedom, then you would respect one's freedom to run thier website they see fit.
It was easy to respect one's freedom, when thier only other option was subscription, because you know most people won't buy subscriptions, therefore most websites won't be subscription based.
Micropayments, on the other hand, really threaten you, because you know most people won't mind paying $.05 (or some other price) for a dirty cartoon, and that would require you to pay $.05 for the cartoon.
Admit it to yourself, you really don't care about people's freedom, you're just a cheapskate hanging on the coattails of this "Free the Internet" movement.
If you REALLY cared about people's freedom, you would respect people's freedom to ask (NOT DEMAND, NOT LEGISLATE, NOT MONOPOLIZE, NOT COMMUNIZE) for compensation.
It's only the cornerstone idea of the most successful economic system to have been implemented.
I don't know about you, but I can't think of many other ideas which has done as much to promote freedom and improve the quality of life, other than science (not technology, the dicipline).
"Communism is like having one [local] phone company " - Lenny Bruce
But, this article basically skips over the most fundamental point.
We've got to have the financial institutions, people's banks, in on this. And they have costs because of transactions too, so they need to cover those costs too. Right now, it seems that they have rather large costs for each transaction. One transaction costs about as much as an average micropayment, it really doesn't scale well, that's a problem that needs addressing.
A micropayment should be as cheap as a simple database transaction, that's what it is really. I don't know why it isn't that cheap, but you can't propose a viable system for micropayments without addressing this issue.
Another fundamental point is that we need good, open standards, and implementation of the standards natively in browsers.
Employee of Inrupt, Project Release Manager and Community Manager for Solid
I will try not to single out the person who wrote this article..
But it is interesting to witness the decline of the internet. Recall if you can, though we are probably all too young to have witnessed, that the advent of both television and radio where to revolutionize Society and Culture in the world bringing about a Renaissance the likes of which have never been witnessed.
The reality is we have way too many commercials on both Radio and Television (and the Internet?). Additionally, the only content you can find is that which is targeted to the highest spending demographical entitiy in the Society.
There is no cultural revolution. This is a continued example of how the internet will, like all it's predecessors, become nothing more than a petri dish of cultures that are dutifully harvested of whatever monies may come.
Examine carefully the history of Radio and Television before the FCC locked everything down and before the FM spectrum was owned by only a few companies.... This is a repeat of the same.
Technically it is feasable to create a system where a web site could publish a price for viewing each page. My ISP would keep track of what I view and include it in my bill.
The ISP would batch the payments from all its subscribers to the web site. If the payment to a web site is below some minimum, the ISP could delay payment to the next month. So there would be no micro-transactions involved.
The ISPs already tracks how long each user is online, bills them and collects the money. Assuming they would get some cut of the payments (say, 1%), the extra overhead would be more than worth it.
This model works perfectly for the phone company... my phone bill shows "opayments to other companies" - airtime to cellular phones, long distance, and so on. There's really no reason that it shouldn't work for the Internet.
Why hasn't something like that ever even been attempted?
fuck capitalism up the ass
We pay when we get flogged by pop-ups. I pay for my connection. It's the same gripe I have about going to a movie theatre, paying $8.50 for a ticket, then being plastered with Coke and Nokia and car ads before the previews. And yes, previews ARE ads, but at least they are something we WANT to see, since most of the time they are exclusive, pre-TV release ads. I would have no problem with those ads if they took several $$ off the price of my ticket.
If I have to pay to access sites that I am already paying to have the ability to connect to, that also is ridiculous.
However, this was supposed to be a discussion about micropayments, not a rant, so if micropayments are a must, the solution is easy. Do the same thing that EZPass (and other) tollbooths do. Have a $30 account credited. When you use that up, another $30 is automatically charged. EZPass would never work if each time you went through the tollbooth it charged your credit card $1.
done.
I don't know about you, but I can't think of many other ideas which has done as much to promote freedom and improve the quality of life, other than science (not technology, the dicipline).
I forgot justice. It is abosultely essential for a thriving society. A Free Market without justice is the equivilant of South America and South East Asia.
Can't speak much for South America, but South East Asia isn't pretty (except for Singapore, where they have justice).
"Communism is like having one [local] phone company " - Lenny Bruce
I still think a P2P dBarter system could take off like a rocket if someone with one of the P2P services would install it.
Seastead this.
I can barely verify that all the payments I currently make are valid and accurate. Having thousands of unverifiable micropaymetns would be just another nightmare. The problem is not one of implementation it is that people do not want it.
Pretty much any micropayment system you can think of can be implemented, fairly cheaply, today.
The problem is getting people to use them. It's a social problem, one that must be combatted with user-friendly engineering, a compelling design (not technical design of the servers and stuff which like I said is really easy, but a design for how to use it, both on the surfer and content provider side), and a large enough advertising budget to cause a massive shift in attitudes about online content.
The tech is effectively irrelevant until those hurdles can be jumped.
The page was always free. I tried to get advertising to reduce the burden on my pocketbook, but because my privacy policy said "I will never give out information about visitors" I couldn't get any. I asked for donations and I got some, but never more than $100.00 in any given month.
After a year of $400.00 a month bills I decided that I simply could not afford it and closed the site after turning all my work over to the Public Domain.
If bandwidth was free that site would still be there. But bandwidth isn't free. Nothing is ever free. Someone, somewhere, has paid for it.
Boobies never hurt anyone. - Sherry Glaser.
A friend of mine owned a store a while back, and I once asked him why he wouldn't accept credit cards for some purchases. Basically, it costs the vendor money to process a credit card. In his case, he wouldn't take a card for a purchase under $10 because the processing fee ate up too much of his already thin margin, nd it was still uncomfortable for him to do so for purchases under $20.
That right there is the barrier that is preventing micropayments from working. You aren't going to charge me $.03 to look at a page when it costs you $.50 to process the transaction, and I'm not going to pay $.53 just to view one stinking page.
The only way I see micropayments working is someone like Visa buys into it and restructures fees to make micropayments viable, and I don't see that happening any time soon.
Under capitalism man exploits man. Under communism it's the other way around.
...how in the hell did they piss away *80 million dollars* since starting up? Entire publishing empires have been founded, or bought and sold, for way less money. No realistic number of micropayments, or macropayments, will save sinking luxury liners like this one.
did I say anything even vaguely like, " Micropaymensts suck", or " I'll never pay for web content.
By the way, you're already sllowed to make print copies of web pages, just as you may type out the "content" of any book you've actually purchased or tape a TV show for "time shifting". You just can't *distribute* what you've printed.
On the other hand I can by a professionally printed and bound copy of Walden in a Dover Thrift edition for a buck. This is one of the reasons why making books available online will have only a marginal impact on sales, because it's cheaper the *buy* the book than download and print it.
I *said* a commercial web page has to compete on price and value. And it does.
KFG
And I 0wn the vast majority of the sites on the web I visit!
There is a certain attitude, as the original poster noted, that everything on the net should be free. But that's not the main problem.
The problem is that for the average person, the vast majority of what's on the web isn't worth paying for. It doesn't matter how easy it is to pay for, or how reasonable the cost is. There's just no demand for it.
Think of the web as the world's largest bookstore. I -- or anyone else -- might spend a couple of hours at the local Barnes and Noble browsing, but I don't buy everything I look at, and generally don't buy anything on the average visit. Now and then, I see something worth shelling out for, and I buy it. Brick and mortar retailers know this and understand that it's part of the game, and they don't sit around at night thinking up schemes for a per-book browsing fee. If they did, hardly anyone would ever come into the store, much less buy anything. For some reason -- perhaps the total lack of business knowledge that has afflicted online ventures from the beginning -- website producers just don't get this.
On the average day, I visit a couple dozen sites, including Slashdot, Freshmeat, CNN, Google, EurekAlert, various King Features and UFS comics, the New Online Books Page, a couple of hometown newspapers, etc. How many of these would I pay for if I had to? None of them. If I knew that the only way for them to stay online was for people like me to pay for them, I still wouldn't pay for them.
It's not that these aren't mostly fine sites, but the calculation being made here isn't their intrinsic value but rather the opportunity cost. If Site X was the only source of entertainment in my life, I'd surely pay a fair (maybe even unfair) price for it, but I have to ask myself -- would I rather get a book, a CD, rent a movie, spend a weekend at the beach, buy a camcorder, buy dinner, fix the car, etc., instead of subscribing to (or buying individual page views from) a website? In a word, no.
It's not just me, either, to judge from the state of the web content business. For the vast majority of people, the main value of the web lies in the fact that the content is free and convenient. Take that away, and very few people will be willing to pay for anything at all, and very few of them will do more than they do with the paper equivalent -- maybe subscribe to a newspaper, and maybe a couple of magazines. The sad and perhaps shocking truth is that the web just isn't very entertaining compared to traditional media.
Proud member of the Weirdo-American community.
This isn't a viable system for micropayments. At best, it's a way of password protecting your website.
It doesn't, in fact, tell you anything other than how to password protect your folders. At the end it mentions "Use Paypal or something similar to accept money", but that's not the solution to the problem of micropayments, because you can't use Paypal to pay people 10c, which is the highest that micropayments go.
Did the editors actually understand what they were posting when they posted it?
My Journal
To the business, $10 is too small a fee. A large percentage of this would be eaten up by the credit card processing costs, including dealing with reversals etc, especially if you're allowing refunds.
Because they are not a bank, I also would not trust PayPal with a lot of money.
However, for small payments (which I'll arbitrarily set at $100 or less) they are fantastic. You can put money in the account, and just drain it that way (which is exactly what another poster was asking for). Even better, tie it to a throwaway bank account that you just keep a few hundred in and then drain money out of that.
I still like PayPal, I used to do a lot of online used book sales and they were perfect for that. I think they could be a great player in the micropayment space if they play it right.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
People will pay for what they want if you make it feel Safe and Easy enough. (Pricing will take care of itself.)
EASY: 1-time signup for almost all web services.
SAFE: Purchase terms kept simple. E.g. "Buy this article - 10 cents. OK?"
EASY: To buy I just click "OK"
SAFE: Only my payment service gets my name, credit card number, etc.
SAFE: Unlikely I'll get cheated, insured against big losses.
Well - at $25 bux per month for ISP services AOL alone bills about 33 million people and that generates almost 10 billion per year in revenues. This for access to content that as you put it "isn't worth paying for". I'd suggest that if the content that you say "isn't worth paying for" were not present on the net then perhaps AOL would not even exist.
None of this revenue stream is shared with the people who create the content AOL distributes of course.
quottage "We certainly dont want the internet to become modeled after the cable tv media structure."
I think this is exactly what is going to happen to "the internet". It's going to follow both cable/satellite type services, and be combined with telco style charges. You'll be buying various "package deals" to content along with your net access. There will evolve several large internet providers. People say it'll never happen, but I predict it will because there's no practical way to get to the backbone without going through the isp. There's the chokepoint, and there's where the interface and payment plans will be collected. The trends in the industry now will be to watch bandwith, provide pay per view on demand, and that will require centralised services as having it for thousands of providers will become too cumbersome for the payments. The wild wild west days of the internet are soon to change dramatically. I don't want it to change, but the money is going to come from someplace because "the internet" is running at a loss if you deduct the guhzillions of venture capitalist input,which is drying up. Copyright issues, "security" and bandwith will lead the business model.
Most likely future micro-payments will take the pre-funded account approach. That is, people will pay $20 or something to an online escrow account, and then when they purchase content they will be charged unobtrusively until they have no more cash in the account.
You can see the beginnings of this at sites like Clitmap.com, a site that has a virtual economy and assigns you a certain number of free credits when you sign up. After you use up the credits by "buying" views of photos, you have to pay for a real account or post your own photos to earn more credits.
Nothing new here, it's exactly what Paypal was meant to be for. Unfortunately, Paypal does the job very badly and is very greedy (they take 10%). What we need is not yet another article about what a great idea micropayments are, but a competitor to Paypal that:
1. Doesn't keep screwing up
2. Charges 3% or less
Since the whole process of collecting the micropayments can be automated, a properly-run Paypal competitor should be able to charge just 1% over what the banks charge it, and still make money. Even when micropayments are measured in cents, not dollars. People, if we want a web not clogged by ads, we are going to have to pay for it. But, web-based businesses, your running costs per user are next to zero, so you're going to have to charge close to zero.
For all the bozos that think everything in life ought be free: Information wants to be free. As in speech. Not beer.
That some content costs money is a prerequisite for its creation.
Civilization is the process of setting man free from men.
The problem with most micropayment systems is the hassle : openning a paypal account is a drag, subscribing for a full year when all you want is a misc page, etc. It's discouraging. For most people, paying the ISP is allready 'paying for internet'.
Paypal should make deals with ISPs : you would get a paypal account bundled with your internet access.
just my 0.2 euros.
It would be more like paying for a vacation to new york, and getting charged to visit the public library, or to see the billboards along the way.
It costs libraries money for people to come in (wear and tear on the structure and the books) even if they don't check anything out. If triple the normal visitors started arriving every day, it would cost the library more than now, to pay for guards, librarians, maintenance, etc.
Billboards cost the advertisers money, just like company web sites promoting their products.
$10 is not too much if I am planning on downloading a variety of files, as in the case of a developer who needs development aids.
Credit card fees can be passed on to the customers.
Take a statement, add a question mark, and voila: A Viola? Or a man, a plan, a canal? Or simply a fish without a bicycle?
PS: The answer is 42.
Let people run a tab - either on your website, or on a payment service. Then after they've enjoyed the service for a while and run up a small tab, you pop up:
"You've read 25 daily issues and your running tab has hit $4. Before buying today's issue, would you like to pay your tab?"
and if they keep saying no, eventually...
"You've enjoyed 30 daily issues of our website. If you'd like to read today's issue for just 16 cents, please pay your tab of $5.80 now. Or you can subscribe for the next two months for just $10 and we'll clear your tab!"
This works better (i.e. people are more likely to pay up) if it's a payment service that is used across thousands of popular sites that runs the tab.
man i actually got kinda geeked when i saw the headline and thought someone actually had achieved a viable system for micropayments.
and then it turns out to be a HowTo: make an annual subscription fee site. yeah. talk about sidestepping the buzzword.
"Look! i've got cold fusion! well actually cold fusion is ridiculous; but here's how you can build a pretty good internal combustion engine..."
you see, the only viable 'micropayment' implimentation would be to take payments in larger chunks, say $5 - $10, and then save that in their 'account'. each time the user views a page, the micropayment is deducted from his/her/its account. eventually it hits 0 (decided entirely by use) and the user needs to pony up some more dough to keep going.
no fancy ecash systems, no ridiculously small credit card charges.
and i thought CNN posted the most horrendously fabricated headlines to get traffic...
// "Can't clowns and pirates just -try- to get along?"
Thee cents is missing the point of micro payments. Make them really micro. As in less than a cent. Then don't make the transaction happen every time. Sure if you charge less than a cent each time the transaction to process that is not worth it. But bundle things up. That doesn't allow for one time users you say? Well then lets say that there is a two dollar charge to process the transaction. Ok implement some form of tracking at the ISP level. The individual users fee gets tacked on to their ISP bill. The ISP then pays hosts for individual member accesses as a lump sums. The host then divides the spoils up as per the requests made for each page.
.4 cents per page. With amounts that small it really lets the end user not think about cost at all. We'll say half of that goes to the server because bandwidth isn't free.
.2 cents per page they make $36,500 a year minus processing fees. That's not bad. Sure people with only 3,000 viewers don't make a living off of that small a payment. But A) If only three thousand people are reading it do you really want to shift over to pay right now? B) few sites are just one page C) Nobody said that web content creator was an emerging job that everyone should be able to do.
Ideally the host has multiple pages that get a fair number of readers. The key is that at each point before the actual creator of the page there is a group. The page maker gets all the micro payments minus fees (lets say that's up to 4 dollars now). Hopefully they're making more than 4 dollars a week. If they are they turn a small profit. The host hopefully has several pages that it serves that are micro payment based. That way it isn't getting small sums from the ISPs. And the ISPs are accounting for all of the micro payment pages. If the sizes are still too small then the payments could be monthly.
With this in mind lets look at an example with
Lets say that a page gets 50,000 views a day and updates daily. At
The problem is that for the average person, the vast majority of what's on the web isn't worth paying for. It doesn't matter how easy it is to pay for, or how reasonable the cost is. There's just no demand for it.
I find that an illogical position. There is hardly anything that is "not worth paying for" in a pure sense. As Jacob Neilson points out, you "pay" for an article on CNN with your time. It is only "free" if you value your tie at $0.00. Most people do not. And then you are also paying with bandwidth. If it was truly the fact that Web content was valueless, nobody would use the Web. But they do. Therefore there is some financial price that is small enough to be lost in the noise of the other costs. e.g. Who would complain if after a month of normal surfing they had an extra $1.00 tacked on to their bill but had never seen a banner ad during that period? A buck for a month without banners and popups on all of my favorite sites? I'd probably opt-in for that!
But the problem has always been: "How do we exact that extremely low cost with an equally small hassle to the user and yet give the user the sense that they are in control?" And there is the associated problem that the Web is a massively decentralized system so there are huge technical deployment issues.
If Site X was the only source of entertainment in my life, I'd surely pay a fair (maybe even unfair) price for it, but I have to ask myself -- would I rather get a book, a CD, rent a movie, spend a weekend at the beach, buy a camcorder, buy dinner, fix the car, etc., instead of subscribing to (or buying individual page views from) a website? In a word, no.
It isn't a question of "website subscription" versus "buy a CD". That presumes that the prices are equal. The appropriate question is whether a hundred website pages are worth a print magazin. Or a thousand. Or ten thousand. Or a million. Or a billion. If the answer is really that a billion web page views are not worth the price of a print magazine to you then I don't know why you waste your time on the web at all.
It's not just me, either, to judge from the state of the web content business. For the vast majority of people, the main value of the web lies in the fact that the content is free and convenient. Take that away, and very few people will be willing to pay for anything at all, and very few of them will do more than they do with the paper equivalent -- maybe subscribe to a newspaper, and maybe a couple of magazines.
The whole point of micropayments is that you don't think of it as being like a subscription to a newspaper or a couple of magazines.
In summary, despite what you say, the question of pay-to-play content on the Web _does_ come back to "how cheap", "how easy" and "how much do I trust the process." If a micropayment scheme could answer those three questions right (a big _if_) then yes, it _would_ be viable in competition with other media. It's basic economics that even if the Web is not as entertaining as other media (another big "if"), it can win if it is sufficiently cheaper and easier. You haven't explained why you think the laws of economics do not apply in this case.
Naturally, pay-per-byte is fairly clumsy, and of course these sites use banner ads, subscriptions, etc to defray costs. But what people need to understand is this is a two-way street, and your AOL bill only pays for one end of it. In that sense, what you are reveiving now, most certainly, IS free. It's like you're saying that your car payment amounts to a toll - but it doesn't.
Yes, this is redundant, but people just aren't getting it...
-Looking for a job as a materials chemist or multivariat
After lurking around reading this thread, I need to throw in my $.02 (micropayment of an opinion).
Most analogies are that the micropayment or subscription is paying for access to the content itself. Its been well established that except for porn, there isn't much else on the internet that a large audience would pay for. Probably true. But, change the way you look at things... its not about the content... its about the delivery of content.
Much like a subscription to a magazine, are you paying for the content, or how the content is delivered? Think of it in terms of the delivery. The magazine is giving you the content for free, but you're paying for it to be delivered on pages bound together and distributed to your mailbox.
Like a magazine, I'm working on setting up a subscription based service for my growing website. I'm not charging for content... I'm charging for delivery. My idea is to provide free access to all of my content online, BUT... the value is in the delivery. I've discovered that people are willing to pay for custom content delivery via channels such as email, PDA, etc.
So, when I publish an article on my website, if you're a subscriber, the article will be dropped directly into your inbox. Bam... value via delivery, not content. Sometimes, the article will arrive to the subscriber's email prior to being published on the site.
Yes virginia, there is value in content delivery... people need to stay informed. Its easier to stay informed when the content is being delivered directly to the recipients, rather than the recipients having to go to the source.
Get it?
Skiers and Riders -- http://www.snowjournal.com
that I, in essence, disagree with, nor was there anything in my original post to suggest there was. About the only thing we might have to "argue" over is the precise fraction of a penny certain pages are worth.
Given some of your comments though, I would make this addendum. Have you ever wondered why soda machines don't have windows on them, but newspaper vending machines *do*?
I'll note that Salon observably knows the answer to this question and, ironically, I'm not sure the NYT does.
Nor is the answer entirely unique to the media industry.
KFG
This whole discussion was previously covered on Slashdot under http://slashdot.org/article.pl?sid=01/02/26/175620 7&mode=thread&tid=98. It linked to http://www.yafla.com/~dforbes/micropay/index.htm which was a somewhat interesting read.
In any case, the flip side of your "worry" about consumption is that the reduced demand on the infrastructure because you now worry. This of course segues into the whole discussion about whether bandwidth is priced artifically high, blah blah, however using the hydro or water comparison, whenever either of them are "all-inclusive" and unmetered people tend to horribly waste the resources, whereas they're pragmatic and efficient when the same is metered.
There's a show called "Connections" that used to be on TLC (produced by BBC I think) that I loved.
Yeah, that was one of my favorite shows. My personal favorite fact was learning about the volatility of early celluloid based plastics: that imitation ivory billiard balls sometimes exploded and how "widow's(?) silk" got its name.
It's no where to be found.
Not sure how you define "nowhere to be found" did you mean its not available for download?
That may be so but at least three seasons of it were commercially released on VHS. You can get two of them on Amazon Season 2, Season 3. You might also try your public library. If they have a decent video collection they usually have bought most of the BBC series that have run on PBS. They likely would have ordered it directly from the Producer Ambrose Video, which can be kind of pricy - but they have released 10 episodes (two seasons I think) on DVD - the five disc set of which can be had for a mere $395.
Work for Change & GET PAID!
Umm, who forgot to inform Ben, that .ht* by default in Apache is NOT accessible.
.htaccess is honored.
At lesat in all the default configuration files I've ever seen. No request to retrieve anything starting w/
So changing the name, you open yourself up to HAVING your file guessed and stolen. Ugh.
Amateurs.
Let the web content producer pay their customers' ISP's for the bandwidth used to access their site and buy their stuff, passing it on to their individual customers as part of the price of their products. If I don't want what they sell, I don't use or pay for the bandwidth.
Seems preferable to me paying increased ISP bills for bandwidth I may not actually use.
-- Slashdot: When Public Access TV Says "No"
Recently I had some serious dental work done. My dentist offers a discount if I pay a couple of days before the treatment. I show up to pay this with my Visa debit card. I was told that they can only give the discount if I pay early by check because they then avoid the card transaction fee. No big deal, I came back later with a check.
That got my thinking. Why in the world should an electronic transaction cost more than a check? A check needs to be physically transported, probably read by a human etc but the debit card gives instantly secured funds pretty much without moving parts.
Something is upside down here. This is in the USA.
Utopian micropayment predictions always seem to ignore the basic desire to maximize profits. They predict a utopia where vast amounts of content are available with automatic payments so tiny that nobody will be bothered. But why would any author/provider leave all that money on the table? Why would they not increase prices to what the market will bear?
Today there is a lot of "content" available for free, or for "free registration". That would change. Virtually anything worthwhile that exists today for free would almost certainly go to micropayments. Lots of worthless content would also go to micropayments, because even a small amount of money from occasional readers would be better than nothing. Shopping sites and some purely non-commercial sites would likely be the only places left that cared more about getting lots of viewer (paying nothing) than a smaller number of viewers (paying "micro" amounts).
But would also truely high quality content appear? Maybe, but micropayments would have to be a pretty successful business opportunity before substantial new investments get made (other than re-purposing content authored for other media). Even then, the drive to maximize profits would be the primary driver. One way to maximize profits might be to produce something truely great and hope that a lot of people find it. Another might be to produce LOTS of mediocre content (as cheaply as possible) and make small returns on each piece. Another might be to put a large portion of the resources into "marketing" the content (getting paid hits) as opposed to the development of the content itself.
Luckily, micropayments appear to be unworkable for the forseeable future (people love flat fees and hate metered services, financial transactions cost too much to process, and financial institutions are also driven to maximize profits and burden the transaction as much as the market will bear). If all these problems ever get worked out, I believe we'll all be looking back on the glory days of the World Wide Web, when one could easily surf around and find lots of info about almost anything.
PJRC: Electronic Projects, 8051 Microcontroller Tools
I'm not a tech guy, but doesn't it seem that micropayments (meaning $1 on down to fractions of a cent) should be feasible to implement?
The need for easy, painless micropayments (as opposed to free or subscription, with no middle ground) is pretty obvious. (Scott McLeod makes a great case for micropayments). Let the people vote with their pocketbooks--creators that the Net audience likes will make money and the rest won't. It all seems simple enough in principle. (Speaking as a writer, I'd much rather charge 50 cents for a book and reach an audience of millions, than charge $7-8 and only reach a few thousand...the Net seems ideally suited to such a system in principle.)
Now, isn't such a system technologically feasible?
Said system should be like PayPal, but structured for small charges based on a flat %, not a minimum charge of 30 cents...users would pre-pay into their account (not unlike phone calling cards) and then, if they are making money, they could cash out. The system has to be "universal" (one or two companies handling this), but the big advantage is that I don't have to pull out my credit card with every site I visit. (Couldn't there be some kind of tracking or account management system in place to secure this?)
When I visit a "charge" page, I see a click box such as "This page costs 2 cents," with Okay / No Thanks click boxes. Such a system has to absolutely be such that you can't be charged with explicitly clicking "okay."
By orchestrating through one or two key providers, they could establish concrete terms of services for pages accepting these payments so there is no unethical conduct (like the "pay spam" alluded to earlier). Of course, this company allows users to check balances at any time and review all charges.
Wait, this sound suspiciously like the pitch for MS Passport, doesn't it?
Dude...where were you when AOL started ? Three things ( and I know I'm repeating myself by posting it, but it bears repeating.. A) AOL was around when only others like compuserve, and Prodigy, yet had a VIABLE graphical interface to make it easier for non-technical people to access the "online experience" because back then it wasn't even "the internet" for over 99% of you ( unless you worked for DARPA ). B) Their price a month was a low-life $9.95/mo back then C) They were able to switch to allowing access to the internet, while keeping their own "content" alive ( content = we give a bunch of folks free access to aol if they "work the floor", and keep the people active in chat rooms, discussions ) To the best of my recollection, they were the first to get celebrities to go online for chats with fans.
Micropayments on a page-by-page basis probably won't work. It will put too much thought into the process of clicking on a link. That's not what the internet is about.
Subscriptions won't work either, because few people get enough value from a site to want to pay $10/month to access it. Plus, once your 20 favorite sites start to charge $10/month, how many sites will you subscribe to? Probably not more than one. Then you'll question why you're paying $50/month for broadband so that you can pay $10 to access content.
But I think there's another way.
I publish a website which gets about 10,000 unique visitors per day. It's considered a medium-size content site. Over the course of a month I get about 150,000 different unique visitors.
If I could get each visitor to pay $0.05-$0.10 per month I would be very, very happy as a publisher. I would then gross between $7,500-15,000 per month. That's plenty of money to keep me publishing, and I could then devote my resources 100% towards the site rather than to the job I hold to keep the site going.
Now look at this proposal from the consumer's point of view. How many sites do you regularly use in a typical month? 20? 50? Let's say you use 100 sites in a typical month, and that each one charged you $0.10 per month for unlimited access.
That's $10 more for internet per month.
In the grand scheme of things, $10 for 100 unique content sites isn't all that much. Plus, not all sites on the internet would charge for their content, perhaps some would try and entice visitors with "free" content sites, and then try and sell advertising or products to cover their costs, similar to how things work today.
With such a payment method, there would be tons of people clamoring to create original content. If that content is good, the creator would be rewarded with plenty of visitors willing to pay $0.05-0.10 for access to the content. If it's not that good, the creator will not be rewarded all that much.
Look at a site like Google, which gets tens of millions of unique visitors per month. Would you pay $0.05/month to use Google? Of course you would. If they get 10,000,000 uniques per month, don't you think they could use the extra $500,000 per month?
The problem with trying to make money from each visitor right now is that floor price for what a site can charge in a single payment is realistically about $5. Once you get under that, the fixed costs to process the payment are too high, especially when you figure in things like credit card chargebacks. $5 is more than most users would pay for content from a site, even if you say that the $5 is for an entire year.
I know that if I was not a publisher and there was an easy way for me to pay $0.10 for unlimited access to a site for a month, I'd pay this without even thinking about it.
That's what the goal of micropayments should be.
Ralph Slate
--I'd like that community wireless deal as well, but how do you connect to the backbone? At some point there is a hard wired connection in this picture that costs serious moolah and takes advanced expertise. How can joe average actually "get" a real internet access without going through an ISP? Even if someone else does it and you leech off their wireless, it is still costing that someone else a lot of money. there's no "individual" internet access that is commonly used or avaialable, it all has an immediate middleman involved, whether dial up or dsl or cable. I'd like to do that right now-connect to the net and bypass the ISP- but, no idea how to do it without becoming an ISP myself and purchasing some expensive pipe, and accumulating the "howto's".
I wonder what would happen if a new protocol was established for the web, alongside http and https -- say httpm (for money)? A protocol would accomplish several things:
1. It would let you know the free web from the pay web
2. It could encompass https and so allow for payment information to be encrypted and included in the requests. (I realize this might not be such a good idea for cracking reasons -- but then lots of other financial goods can be cracked.)
3. Free web pages could mirror non-free ones. If you weren't sure you wanted to pay for a page you were about to get, you could check the free version which might give you some sort of preview.
4. Access to pages could be kept track of so that you only have to pay once per page per computer.
Paypal already has a mechanism similar to this since they have the ability to create transfers of funds through email. Maybe that transfer mechanism could be adapted as the start of a standard. I don't know much about this, so go easy with the crits.
What am I missing? Why would a monetary web protocol not work for micropayments?
_________________________
Viable systems micropay YOU.
Why bother.
Is this a troll? Should Slashdot or, say, Penny Arcade pay the ISPs of all their visitors? Including operating costs in product prices is all well and good for e-commerce sites, but what about content publishers that aren't trying to sell anything?
You're quibbling over the definition of "micropayment". Parent defines as subscription to a website, you define it as pay per page apparently. Who's correct? Neither of you.
The problem with micropayments has nothing to do with the thing being payed for; micropayment refers to paying for a thing, whatever that thing may be. So, consider the problems: per-transaction costs are way too high, no confidence from buyers, little support from retailers and huge logistics problems, not to mention security!
Anything is possible given time and money.
Although if they raise the cost of stamps anymore, maintaining my own network of Pony Express riders (horses and all) would be cheaper.
--- Ban humanity.
And don't get me started on these people with bizarre traveller's check from Goddamned-Nowhere, Uganda with the Roswell alien lettering on it that needs to be verified by three managers, four computers and an Act of Congress before I can pay cash for my freaking bag of cheddar flavored Wavy Lays.
--- Ban humanity.
check out duocash.com. they are enabling prepaid phone cards that can be used at some sites for small one-time purchases. i suppose if duocash went out of business the value left on the card would still be good for making phone calls. they apparently dont have the transaction fee associated with credit cards, but i'm sure everyone is taking there cut along the line. i'm not sure how widespread duocash cards are supported yet.
The porn people have apparently discovered and implemented workable "one pass" systems, which is one solution to the problem the poster is attempting to address.
Another "ask slashdot" that we all could have done without.
Maybe we need a new category - or maybe we could have a poll every day, and only the winner gets to "ask slashdot".
The real problem with micropayments is supplier fraud: they use teasers (ie, google hits) to make you think they have what you want, you get it and it isn't what you want. Yet they collect the micropayment for the hit.
Then there is the problem of salami-slicing: micropayments encourage vendors to break up any actually useful info into as many little bits as they can possibly get away with. You hit the first bit, find it useful (make a micropayment), go fetch the next bit, make another micropayment, and so on. With micropayments, the incentive to create comprehensive web pages, pages that present the needed info succintly and showing the proper relationships amoung the elements of the data, would disappear.
Finally, we need the ability to browse around, looking for what it needed, before payments are made; paying only the hits that actually prove useful. Micropayments fail this test big-time.
I've been saying micropayments would be a great idea for a while (for things worth paying for obviously... it would have to be better content than most of what you see now and bandwidth is *not* a commodity). The only problem is that the system gets very complicated when you get into the details: how do you ensure that the system is accurate and not hackable? How do you keep costs down when there are millions or billions of small transactions per day? How you find retailers willing to sell things for a reasonable price when they're used to overinflating the price? How do you convince a public that if they'd stop being so damn cheap they could get something worthwhile?
Anyway, the reason I see this as being slow to start is that you need a bunch of sites that people want to use before any customer would put $5 on their visa for the services. If you only have one site, the whole $5 goes to that one site and it's not really a micropayment.
You're quibbling over the definition of "micropayment"
No I'm not. Did your read my post? I'm arguing that the statement: "Web content is not worth paying for" makes no economic sense. It makes sense to say that Web content is not worth paying for at some particular price point, or that it is too inconvenient to pay for, or that there are security, trust or logistics issues. But he didn't say that. He said "the content is not worth paying for" which is totally illogical. The print NYT is worth $1.00 but the online one is not worth even $0.000000001? That doesn't make any sense unless you view the NYT as being primarily about paper, not about content.
Why would we pay for the biggest cheap advertising windfall that these large corporations have ever had?
How much does it cost Nike to run a 30 second ad on TV to a few million people? And how much does it cost them to maintain a permanent website available to the wired public of the entire world?
How much more information can interested customers get from their exposure to the products on the Net than from a short flashy TV commercial?
How many more impulsive sales are generated by customers who can purchase the cool thing they just saw with a few mouse clicks instead of jumping off the couch in the middle of the Super Bowl to go purchase that pair of shoes they can't live without?
There is one solution for advertisers that think they are not making enough money on the net: Get Off! We did not start surfing the Net so we could purchase things.
We started because we could communicate. The convenience of the Net makes profits easier to come by, and still businesspeople whine.
The Net is an environment that businesses have to adapt to. If businesspeople want to make a profit, that is their problem. It is certainly not the users' (or they would say consumers') problem.
All data is speech. All speech is Free.
Unfortunately I don't think there is a viable system for micropayments and it's not because of a lack of a system to do it. Jakob Nielsen has been heralding the dawn of micropayments for a long time and so far they just haven't caught on. The problems as I see them are many:
I don't think micropayments can work for anyone other than for niche players offering a unique or highly desirable service.
L.On this subject, it's interesting to check out Xanadu , which is a system Ted Nelson proposed years ago (decades, really) that does hypertext and micropayments and all kinds of interesting things. Not that I think we should just ditch the web immediately and adopt Xanadu instead, but it's interesting anyway...
They seem to have a way to aggregate micropayments into manageable-sized transactions, and they don't charge a fee.
http://www.ginx.com/nx/
It isn't a question of "website subscription" versus "buy a CD". That presumes that the prices are equal. The appropriate question is whether a hundred website pages are worth a print magazin. Or a thousand.
This is what I responding to. Micropayments has nothing to do with relative worth, it's a means for paying that worth. The parent was talking about a website subscription (or any fee for content I suppose). Arguing about realitive values means nothing.
Now, your argument that valuing content differently based on its delivery mechanism (website vs newspaper) not making sense holds no water. Indeed, in your comparision, the content means nothing, the sole difference in worth to a person is the delivery mechanism. The parent basically said this: 'the content is worthless unless delivered in a format valuable to me'. I think that sums up the whole argument very well.
That doesn't make any sense unless you view the NYT as being primarily about paper, not about content
Evidently this is exactly how the parent values the NYT NEWSPAPER. I would have to agree, but then I don't read the NYT nor would I subscribe to it in any format, including free.
Anything is possible given time and money.
Forgive me, this may take a bit. And I do sincerely wish to commend you for thinking through your proposal. However, I wish to share some things from my experience that you may find helpful if you wish to pursue this idea.
I run the IT development wing of a medium size software and services company. I don't have a formal background in financial or managerial accounting, but I've acquired some knowledge in my years, and you would not believe how much I do while acting as the watchdog that ensures our systems (and processes) will not become potential sources of customer fraud. And that means that all our systems (and business models) are built with an eye towards passing a financial audit without raising concern.
Why am I saying this? Because as engineers we sometimes forget that the technical answer to a solution isn't enough; especially the moment you begin taking money from someone as quid pro quo for a service or product you are offering.
When you start accepting money from customers, you must think carefully about the fact that chances are very good that someone has handled a transaction like this before--and been hauled into court for it--or likely will handle a transaction like this in the future and later get hauled into court. Because of that, there are a great number of laws that exist governing how we do business, and there are the Generally Accepted Accounting Principles (GAAP) that provide guidance to businesses regarding the documentation and processes they should have in place to ensure they can properly state their business performance but also demonstrate that they are neither the victims nor perpetrators of fraud.
Almost there, bear with me. So, a micropayment system for bandwidth usage--because bandwidth is such a fungible resource--must have a mechanism that is precise and defensible in a court of law, and it must pass the muster of the CPAs who will eventually come check your books so that you can stay in business. That means:
1) You have to demonstrate you are charging exactly what you said you would charge, calculated the way you said you would. Are you ready to assert your mechanism will always give the right answer, when speaking to a customer (or accountant) who may understand what Apache is?
2) Unless you state clearly why you are not doing so (i.e., you have different services to offer), each customer must be charged the same price for the same thing. Are you sure your system won't accidentally overcharge one customer and undercharge another? What if you customer's compared notes?
3) What if a customer asks you to justify the bill? How would you do that? And if an accountant, 12 months later, asked you to justify the charge to a customer for a specific week of service, what documentation or digital trail would you provide that would precisely show why the charge was what it was?
I could probably go on, causing great boredom to most of Slashdot and you, I'm sure, but I just wish to point out that micropayments are fine, but the systems required to support them are very complex *because* of the requirements like the ones I've listed above. And thus very expensive, with more twists and turns than you've elucidated on a single page.
Again, my commendation to you for proposing an idea for Slashdot to, well, slash. But I couldn't let another post go up detailing a business or technical idea that is still too ungerminated too yet succeed. Best wishes!
No troll. If you're actually selling something, you can pass costs on to customers. If you're trying to make money by giving something away, you have another problem.
/., so they're, as well as others, are getting a free ride. I.e., their bits move via my ISP, but I'm the one billed.
Of course, more bandwidth is taken up by the downlink from
In point of fact, almost all of Slashdot's content is provided at no cost to OSDN.
-- Slashdot: When Public Access TV Says "No"
Currently, Web content providers and have no mojo to abuse in the first place, which is no better for us all in the long run than the appearance and domination of the next RIAA-like organization. Either way, we, the consumers of content, risk losing out on some good stuff.
I disagree. It is better without, because said "RIAA-like organization" can't lobby Congress to limit/remove our freedoms in order to fatten their bottom line. That is, the point of business, after all. And if you don't believe me, you can believe this.
Honestly, I don't think a micropayment solution will arise until the Government insitutes some sort of official e-cash solution. Given that the general public is a horde of moronic technophobes, and the country is currently being run by one, I seriously doubt such a solution being implemented in my lifetime.
So, until then, web publishers can run their sites as ad-supported (or referral supported), or find a line of work that will actually pay them actual money, and stop bitching. Nobody's forcing them to run a website.
The theory of relativity doesn't work right in Arkansas.
This article, no offense, really has nothing to do with micropayments at all. It's simply a half-assed configuration guide for Apache. So what?
... Microsoft Passport? Don't get me wrong - this could be a nightmare from nearly any perspective (privacy, security, vendor lock-in, monopoly gouging, lack of standards, etc.), but the idea itself is sound. Joe Webmaster, using an API provided by [Vendor X], sends them traffic information on a [daily|weekly|other] basis and gets a check back. The users are billed monthly.
You can't solve the micropayment problem technically. The solution involves technology, but is primarily social and business.
You need a robust system capable of tracking a user's activity and billing them at some sort of interval. The problem here is that all of the electronic payment apparatus in place in the world assumes that large amounts are being billed. How'd you like [CC Processor X] to charge you 3% (rounded up to $2 or so, as some do) for one user's $0.72 of activity?
No, we need something centralized. Dare I say it
Problematically, the only company with a real shot at implementing this in the short term is Microsoft, and as in all their products (not a flame, just an observation) the first 2 versions will suck, and once they have their monopoly it'll start to suck more.
Content on the Internet needs micropayments to survive in the long term, period. I see no other way, now that advertising has crashed so badly (and looks to stay crashed). This'll be the hardest thing on the 'net since building it.
And that's just the technology. Getting the average user to start paying for each page click will be a hard sell, to say the least.
This isn't as much "normalization" as it is "don't take so many drugs when you're designing tables."
I have a different take on micro-payments that I think will work better than prior attempts. Voluntary micro-payments, or donations.
I've set up a site called the Nickel Exchange to make this work. Our initial focus is on the donate-for-content model, but instead of having a large minimum donation, you can donate as little as a nickel. There is an API available so it is extensible.
I think we've got an innovative approach to clearing these donations, as well, which is explained in greater detail here.
There was also an article posted to kuro5hin with lots of comments/feedback.
The parent basically said this: 'the content is worthless unless delivered in a format valuable to me'. I think that sums up the whole argument very well.
If the content had _no value_ to the poster, then he wouldn't waste his time reading it. But it does. Therefore it has some value. There is currently no payment scheme that meets the various criteria that would allow him to pay at the appropriate value and perhaps there will never be one. But it doesn't make sense to say that there is "no value." Ignore the whole issue of micropayments. Imagine if he said: "I eat salad because I live with my parents, but it has no value to me so I wouldn't pay for it." That's fine if you presume a particular price for salad. But it makes no sense if someone offers him salad for $0.10 or $0.01 or all the salad you an eat for a lifetime for $0.50. If salad was THAT valueless to him, then he would not waste his time eating it today. Now he may never find a salad at the right price and with the appropriate convenience and with the appropriate confidence in its quality and safety. But it is illogical (from an economic point of view) to say that he would never pay for salad under any circumstance, no matter how cheap, easy and safe it was...and yet he eats it every day. Or to be concrete, if there were a way of paying a cent a week for Google, or going without Google, does it really make sense to you that most people who would choose to go without? That's exactly what the original poster said and it still doesn't make any sense to me.
I'm _not_ predicting that Google will ever go pay-to-play. I am saying that the reason the poster suggested ("Google has no monetary value") was bunk. Google has monetary value but there is no convenient way to charge for/pay for it and there may never be.
Most subscription systems are based on offering what seems to be a good deal, with the assumption that the buyer will most of the time not collect 100% of the goods.
Most people pay a fixed rate for bandwidth per month. And for many of these customers the cost per usage is pretty high, because they just don't use that much (mostly email, some IM, a couple of 30 minute surfing sessions daily, with the occasional mp3/avi/etc...). In order to present a true cost per usage package, a provider would first have to admit/reveal that the current pricing structure is a really bad deal.
It's like getting a fantastic deal on a gym membership, and then only going twice a month.
Now, which bandwidth providers do you suppose would volunteer to cut their margins even further?
The ISPs could set up a network of sites that they subscribe too. (Idealy, these would be hosted and mirrored localy on their network to further reduce costs.) For your ISP "fee" you would get 100 dolups. (roughly equivelent to $.01) The sites accepting the network would credit X dolups for viewing, downloading, video, email update, online games, etc... Only the sites and the ISPs would need to do accounting once a month. Your personal account is only debited once a month. This is pay up front, so you will not get into trouble, but you can always up your number of dolups next month if you need too.
Questions answer YOU!
Do you really want every ISP to be like AOL? In the beginning, that *was* the internet -- AOL, Compuserve, Netcom, Prodigy, etc. Consumers rejected that in favor of choosing their own content. ISPs make their money by providing connectivity. Let's keep it that way.
The point that seems to be being missed here is that paying anything for the web is a fundamental shift regarding what the web is about, and continuing with it could lead to disasterous results.
The most obvious result is that the ability to put information up on the web for others to access FOR FREE will go poof. Pick and choose your own reason:
- ISPs increasing their bandwidth or hosting charge, because their clients are now getting payments for their pages and thus have more money;
- ISP hosting agreements based on a share of the micropayments recieved;
- Copy protection becoming standard on web pages to prevent free reposting of charged-for material; protection including a measure that bars viewing of unprotected content to prevent cracking; tools for creating viewable content too expensive for free creators or not for sale to non-businesses because they "can't be trusted";
- Linking becoming a commercial deal, in which free users can't participate because sites will pay linkers to hide links to the free competition;
- Search engines likewise charging a fee for users AND making money for sending them preferentially to charged content.
And then, of course, the web dies very quickly. Because if you can't reasonably display stuff for free, nobody can read your stuff without paying. But they don't want to buy a cat in a bag (especially not after the inevitable initial race of $1-to-view lots-of-bogus-keywords pages)- so they go off to a site they already know. No new site can get started, because nobody wants to be the guy who takes the risk of the first hit, and that isn't going to change because it's just peachy as far as all those sites are concerned and the ISPs aren't bothered either. Search engines die because nobody searches anymore.
In other words, it's the PageRank Effect writ large and with money. Heck, next thing, those sites will start to offer to save the user the price of their internet connection by providing one themselves, for accessing their site only, that's bunded with their micropayments. Congratulations, we have just rolled back to BBSs.
mod parent up
Another big downside of micropayments is that the cost of accounting, billing, and collecting can easily exceed the cost of providing the service. That's been true of off-peak-hour telephony for years. Off-peak cellular rates reflect this.
Worse, once you put in a payment system, the amount of user attention required to use it is high. Users will fear (with reason, given the history of slamming, cramming, and 900 number overcharging) that they will be ripped off.
Only two non-porno web sites really succeed as pay sites - Consumers Union and the Wall Street Journal. Both are operated by organizations with very good reputations and long histories.
The Internet offers an interesting topic for economics individuals. On one side (surfers), you have people who want their quality content now and cheap (preferably free). On the other (corporations), you have those who want to provide content and want to make cash. Both are understandable, but I think it's the extremes where we get into trouble.
:)
The extremes:
With the surfers, they want it all free. How dare the company charge me for it. How dare they use pop-up ads. How dare they use banner ads. I want it free and without hassle. And I want it now.
With the companies, they want money, money, money. How dare the consumer get pissed at my pop-up ads. How dare they complain when I charge for something that once was free. Hah? They expect support for something that's free? Give me the money, then I'll give you what you want.
I think both extremes in ideology are flawed. Sure, free content is ideal, but unrealistic without some annoyance or support (financial) from the customers. It costs the companies money to run servers, research content, and all the other things that go with it. On the other hand, it's nice to turn a profit and not just break-even. So, what should be both do? Change our thought process.
Micropayment systems is a good concept, it just needs a good, efficient, and cheap way to be implemented.
Another approach is the subscription rate, less desirable for consumers.
I also suggest a "gift card" approach, where the consumer purchases a specific number of cash in an account with the company. Then they're free to spend it until it runs out. At any time they can add more. Of course, with this you need an extra level of security of protection for the consumer to make sure money doesn't mysteriously disappear or the company adds hidden fees.
Another I've come up with is a don't-pay-until model. This relies more on trust between the content provider and the customer. It works where the users credit card (or whatever) is not charged until they have reached a certain level. This assumes the user will use it more often. It could even be more like a "trial account."
Of course, the ideas above assume the content provider is willing to provide quality content and not crap.
Ah well. Now, where's my two cents?
Micropayment systems allready exist and are successful. The major issue is setting up the system for calculating payments. One of the reasions for the major success of NTT DoCoMo i-mode phones was there ability to handle billing of content through the normal phone bill (i.e. micropayments). This freed content providers from worrying about billing. The most successful micropayment services involve information that is time critical e.g. when is the next train from A to B, or business information.
My idea is to use the infamous 'web bug' but for good, not evil, for tracking use and accounting for charges.
If you see a problem with it, have a suggestion, or if I'm just not being clear about something, please reply to this comment.
If it has no obviously fatal flaw, I'll publish it shortly.
Disclaimer: I have no intention of trying to set something like this up myself *shudder* although I might consider using it or any other viable micropayment system for a tip jar on my game server.
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There is only one thing that I pay for now and only two things that I have EVER paid for on the Internet in terms of content.
They are:
1. Chess. I pay a yearly fee for a chess server. The two best chess servers online are the ICC(www.chessclub.com) and the WCN (www.worldchessnetwork.com). The ICC has more members, but the WCN has more titled players giving events, like banter games, master challenges and lectures, so I pay for both of them.
2. Consumer Reports. I paid for a year of access at www.consumerreports.org. Unfortunately, it's over now, but I will subscribe again at some point. For $24.95, you get one year of access for all the consumer reports published for that year and access to the last four years on consumer reports ratings online.
That is all I have ever paid for on the Internet and quite frankly that is all I ever see myself paying for content. I spend a lot of money buying products over the Net, but not for content.
Fuck micropayments. The day any company tries to charge me a micropayment for viewing anything on their site is the last day that I will ever visit that site.
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Scottus - there are several other key concepts that I think could help make the idea fly better. Some of these are clever features and bits of technology that might add value to the offering, and some are obvious concepts. Clearly, you need to ink two or three substantive content deals before you have a significant value proposition to the consumer. BTW - I see that you and your partner are MIT alums. You should definitely drop me an email, I would love to chat more about the business opportunity here, and would like to hear about the problems and issues you guys have encountered in your pitch.
Besonic will let you pay per file or ...... or yearly if you want
thank God the internet isn't a human right.
I can't believe this has more than one reply. The initial posting tells me the poster hasn't a clue about the economics of the internet and business practices in gerneral. You charge what the market will bear. As long as people will pay it, or have no other choice but pay it, they will charge it. Unless the internet is taken away from big business it will never change. That's why WiFi scares the crap out of them. Hell, they're even raising prices now that most mom-n-pop ISP's are out of their hair. Later
I don't know what it is, but it sure as hell doesn't include the word "docuverse"
*Splort*
I think I have a better solution for this.
How about I create a little "bank" in which you can deposit, say $5; then I would publish an API to a site that would allow a merchant site to say, User X is asking to access page Y, which costs 1 cent (page id XYZ). I then tell the site, sure the user has enough funds, 1 cent deducted for product XYZ. The site then knows that I owe them 1 cent, and at the end of every month, I send them their 1 cent. They can also ask in the future if user X has already paid for XYZ in the past.
If course, minimum accumulated sums would be required before actually transferring funds, but as long as you trust me to do so, you have no problem with this, not to mention if you have a lot of traffic to your site, then you would pass the threshold quickly.
I can create such a system within days, question is, who will work with me? who will trust me enough to hold his pennies until he sells enough?
And maybe it isn't a big deal, if the threshold is $10 per transfer (for example), cuz if his service was not sold for more than that, he shouldn't bother anyway, right?
If you want a system like this, I really can have it running in a few days on my billing system. The more sites, the better, because when a customer deposits into the 'bank', it becomes much like a credit card company, with merchants who 'accept visa'...
I'm sure this could be extended to P2P clients, with the same API applying!
Let me know if this interests any of you
For anyone mentioning slashdot, I will only take 5%, not 10%!
Skaag @ fraudless.com
All those moments will be lost in time, like tears in rain... time... to... die...
With the exception of those websites that sell to the masses not many people will be able to make money using this.
If I pay 50 cents for downloading a manual, and I charge 50 cents for my BBQ recipes we both end up receiving 45 cents and have 10 cents going to the MicroPaymentSystem. Not to mention that sooner or later the transactions will probably be taxed.
Also, depending on the content, I might go back to using some free 'old-fashioned' resources like the public library.
The real reason we're not seeing a working micropayment system is because the big suppliers don't want it.
Their business is based on the subscription model. The heart of the subscription model is that you pay for the whole deal even if you use a little bit of it. This is how subscriptions cost less per item compared to buying items singly.
To allow people to buy subscription items singly at subscription per item prices would simply destroy their business model. You need to drive to unit price up -- but then it ain't micro anymore!
Assume you run a web site with a $5/month subscription fee. You have 1000 subscribers and you publish 100 articles per month. Assume each subsriber, on average, reads half the articles.
Assume you are breaking even as it is.
How much should an article cost if you went micro-payment? If you take articles per year (1200) and subscription fee per year ($60), you'd get 5 cents per article. Reasonable, no?
Maybe, but not viable. Your old subscribers would move to this model and on average only pay you $30 a year. Now you're $30 000 in the red, per year.
Assume a casual reader might read 5 articles per month. At 5 cents a pop, they generate you a whopping $3 a year per head. You need 10 000 new casual readers just to get where you were.
And this is without figuring in what it costs to develop and maintain the new micropayment system.
So, you jack up the unit price and people go "f%k, I ain't paying $1 for a lousy web page!"
If your unit price is low, you lose subscribers to pay-per-view and have a huge job filling that hole with new casual readers.
If your unit price is high, the threshold for going with a subscription is lower and the benefit of the microsystem becomes marginal as most people just either subscribe or decide it ain't worth it.
There is something of a micropayment market in the mobile world. There, the unit price for logos, ringing tones etc. is in the $1 range -- and even there the drive is to find items with higher unit prices.
Local music industry tried to implement a pay-per-song service. Each song cost about 1/10 of a full CD price to download -- it was NOT a raving success, and business-wise the unit price should probably have been even higher...
Also, subscription revenues are much, much more predictable, which is something bean counters and execs love.
Finally: To REALLY work, it would have to be a universal system, or at the very least, nationwide (or a large ISP). To make something like that work, you need financial muscle. Without the large publishers, the bit players who'd most like the system just don't have the muscle.
PayPal (or equivalent) might, but as the middleman, they need transaction fees to make it viable for them. And transaction fees tend to kill the micro in micropayments...
Well, I think a sub cent fee per page viewed would be a good idea, so long as it was quick and easy.
.5c each. .5c for each page. .5c per page
I'd like to suggest a method whereby your ISP pays your surfing bill and then bills you back. It could work something like this.
1) Browse to foo.com
2) Site "foo.com" sends back a warning that pages are priced at
3) You agree by digitally signing
4) Your signing tells your ISP to record pages you visit at foo.com and pay foo.com
5) your ISP tells foo.com that it will pay
6) foo.com trusts your ISP and serves web pages to you.
7) you receive a bill from your ISP.
This method has the advantage of allowing anonymous access to pay sites as the ISP is acting as your agent, OK your ISP knows what sites you've visited, but they know that anyway.
You can't win Darth. If you mod me down, I shall become more powerful than you could possibly imagine
Sometimes 1kByte of data will save your life (e.g. weather forecast before going to sea)
The author seems to miss this point. Data value has nothing to do with data size.
Another example: A measurement of some sort may cost plenty of $$$'s to take and still be very useful (=valueable).
-- From Denmark
I say that micropayments are a horrible idea and have no chance of working, and there are significant problems that are only cursorily addressed. Clay Shirky said in the case against micropayments that "Why does it matter that users hate micropayments? Because users are the ones with the money, and micropayments do not take user preferences into account. In particular, users want predictable and simple pricing. Micropayments, meanwhile, waste the users' mental effort in order to conserve cheap resources, by creating many tiny, unpredictable transactions. Micropayments thus create in the mind of the user both anxiety and confusion, characteristics that users have not heretofore been known to actively seek out." I find this to be a distant 4th or 5th place reason. I came up with a good list of problems with micropayments that I wrote to the good people that wrote the original article. ... This type of model is FAR more economically, socially, politically, ethically, and technologically complicated. (than the article led the reader to believe)
1) PRIVACY issues. Paying means tracking, tracking will NEVER be acceptable. (this is the thermal exhaust port on this Death Star of a model)
2) Resonance to free sites on PRINCIPLE, causing large sites to drive off loyal users.
3) The subsidization of web properties by brick-and-mortar or other media outlets (CNN.com, Bank of America, Music Concerts, etc)
4) Ther lack of QUALITY content, and paying for information that you dont want, or was not worth your paying.
5) Technological security and fraud. Find me an encryption scheme that is flawless and that the industry and government can agree on.
6) International nature of Internet. Would be illegal in some countries under uniform transaction laws, (content disclosure, per-transaction approval, and privacy) currency exchange, and cultural roadblocks (VERY SIGNIFICANT)
7) Third world inequality. A penny may not be much when you make 50k per year, but what about a Hatian making 600 USD that has access to a computer? This could promote SEVERE social inequity across impoverished nations.
8) User shift back to free/no media. This type of model could very easily drive users off the internet. ISP fees are exorbitant as they are, ($20/month is a lot of money to the poor, to many minority groups, and to students. These are the groups that stand to benefit the most from the Internet.) computers are overpriced (compared to what they COULD cost i.e. MS Xbox is a fully functional high end Pentium 3 computer that can be sold under 300 USD with a minimal loss that will be recouped in licenesing fees)
9) Would destroy existing advertising base on web (more successful than you let on)
10) Would require massive upgrades to existing server and client software, and render all previous packages obsolete. Server software upgrade costs alone would be MASSIVE.
I think the following quote from another user summarized it best
"Incredibly dumb article. Not worth the 5 cents it would have cost me to read it. Casual browsing would plummet. Maybe the phone number and map providers would do well, but I think [small website] might not. I figure it's casual readers who come here to read about [specialized information] not people who are going to pay. I also question the logic that we need penny-per-page to keep the phone number and map providers afloat... they seem to be doing fine."
thats it
People who think they know everything really piss off those of us that actually do.
You're mixing the what you're calling "value" compared to the poster. Value can be money, time or another unit. It boils down to this: Yes, it's worth the time to read; however it's not worth any money, from the poster's viewpoint.
Nothing is without value on some basis (time,money, whatever), but that does not mean everything has a monetary value. Google has NO monetary value UNTIL someone actually pays for it. I could put a million dollar price tag on a bag of garbage, but until someone actually buys it from me, it isn't worth a million dollars.
Anything is possible given time and money.
I think donations are a good idea. Sites could offer
premium access to donators.
Another reason that micropayments have failed so abysmally is that low-priced information quickly becomes a "free hook" for someone offering an adjacent service.
Remember when we were going to pay for stock quotes? Then Schwab and the other discount brokers had to give away quotes in order to keep their trading revenue.
Wire service stories are given away by online newspapers to sell ads (so wire service subscriptions are devalued); movie showtimes and reviews support ticket sales; location-based services generate store coupons. ISP dial-up roaming agreements have been absorbed by iPass (http://www.ipass.com).
In general, there are no valuable services worth buying in micropayments that are not easily bundled into adjacent subscription services. One exception is PayPal-style auction purchases, since they involve two unrelated individuals.
Content providers face a more predictable demand curve when they aggregate content that appeals in an unpredictable way to different customers.
This is the second reason highlighted in the excerpt below; the first reason is convenience in distribution (which does not apply on the Internet) and in consumption (which applies: do you want to make a purchase decision for each article you read or image you download?).
SOURCE: http://www.gsm.uci.edu/~bakos/aig/aig.html
"Most goods can be thought of as bundles of smaller goods (Lancaster, 1966). [...]
Why Aggregate?
There are two main reasons that sellers may wish to aggregate information goods. First, aggregation can directly increase the value available from a set of goods, because of technological complementarities in production, distribution, or consumption. For instance, it is more cost-effective to deliver a few hundred pages of news articles in the form of a Sunday newspaper than to separately deliver each of the individual components only to the people who read them, even if most of the Sunday bundle ends up in the recycle bin without ever being read. Likewise, purchasing a movie on videocassette may be cheaper than repeatedly renting it or attempting to separately charge members of the household for viewing it. These cost savings increase the surplus available to be divided between the buyer and seller, although they may also affect how the surplus is divided. Similarly, including certain types of functionality together in a software application can create value greater than the sum of its parts.
Second, aggregation can make it easier for the seller to extract value from a given set of goods by enabling a form of price discrimination. This effect of aggregation is subtler and, in the case of bundling, has been studied in a number of articles in the economics literature (e.g., Adams and Yellen, 1976; McAfee, McMillan and Whinston, 1989; Schmalensee, 1984). While the benefits of aggregation due to technological complementarities are relatively easy to see, the price discrimination effect does not seem to be as widely recognized outside the economics literature, although it can dramatically affect both efficiency and profits (Bakos and Brynjolfsson, 1996)."