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."

Comments

Pay Sites

[LordYUK]

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 isn't micropayments

[TFloore]

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.

Why Micropayments suck.

[cosmosis]

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.

Re:Why Micropayments suck.

[Mantrid]

Part of the cost difference is due to infrastructure and population densities. You can, in general find decent access options in Canada and the US, however both countries are so spread out that connecting everyone does cost more money...the whole "last mile" problem.

Then there's the problem of upstream service providers - some places things are layered up too much with everyone taking their own slice. Not sure how much of a problem this is in Japan or Korea. It's not as bad in Canada as in the US - although the options are more limited in Canada.