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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."
P2P would come to a shuddering and screeching halt if people had to pay for what they uploaded to others.
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.
... 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.
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.
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...
Whatever happened to people putting up web pages for fun? Is the net to become one big corporate controlled money making machine?
"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.
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/
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 enough that just doing a search these days turns up more sites that want to sell you a book or something with the information your looking for...than sites that actually dispense the information.
That's a joke right?
As far as I can tell your argument is:
Problem: There is no good information on the web. People only want to sell it to you.
Solution: Information should be free.
Information takes time, effort and money to create, interpret and distribute. For **quantity** (let alone **quality** one needs a viable system to move money (how society transfers work/effort) from the reader etc. to the creator.
Advertising is one--but has proven only minimally successful at best. Micropayments would reward directly reward what people want and would make it much easier to say... not have slashdot lose money.
So close and yet so far from the world's perfect ID number
"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."
First of all, for many websites, their content is the service they provide. You don't pay to browse in a shop or peruse a sales catalog, but you are charged for a newpaper subscription, not because they deliver you a part of a dead tree, but because of the content.
Second of all, micropayments enable something far more important than subscriptions: one-off payments. Very often I just want something once from a website. I do not want to subscribe to Gamespot for $5 a month so I can access their premium content, but I would pay $0.50 to download that promo clip for a game I happen to be interested in. If I happen to be searching for a bit of Greek mythology, I won't subscribe at $5 a month to a site that offers this, since I don't need Greek mythology on a regular basis. However for that one time I'd pay $0.50 to get what I need.
That is the power of Micropayments: the ability to charge very small amounts for a one-time service. Credit cards or bank transfers do not offer this; the transaction costs would be prohibitive.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
No? Thought so.
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"
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.
"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.
"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.
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.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
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
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
So basically it's alot like taxes, the idea being to extort an extremely large sum of money a little bit at a time so people won't notice as much?
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 $0.05 for that article? naw, i'll save up for a coke". There are creative solutions, such as identifying high-volume customers and giving them perks or discounts, but consumers dont like intricate pricing schemes (at least I dont). Its confusting and you never know how much the bill is going to be. I think if micropayments ever catch on, it wont be bandwidth-based and it wont be content-based.
The problem with all these site is they want you to *subscribe*. Fileplanet is kind of cool, and when you want a file from them, it might be worth a buck or two to get it from them. BUT, they want you to pay 7$ a month, thats 82$ a year to download files... Why cant I just give them 2$ when I want a file NOW?
And thats the problem with all these subsciption sites. I subscribe to emusic.com, for *15* a month. If I download 0 albums, or 100, they still get their 15$ a month, so what is their incentive to be actively pursuing new and intersting artists? Their incentive is to *not do anything* and save bandwith and personel costs and still collect my 15$ -- Thats why their downloader software fails all the time, and forgets albums you have qued.
Subscriptions reward companies for any quality of crap they put out, whereas a micropayment -- they only get money for *good* material.
Religion is a gateway psychosis. -- Dave Foley
That's not really an accurate analogy, it's more like being charged a toll to park your car, then being charged another to enter your home.
You own (or rent, etc.) your home. You don't own the vast majority of the sites on the web you visit.
"...always new atoms but always doing the same dance, remembering what the dance was yesterday." -Richard Feynman
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
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
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.
"First of all, for many websites, their content is the service they provide. You don't pay to browse in a shop or peruse a sales catalog, but you are charged for a newpaper subscription, not because they deliver you a part of a dead tree, but because of the content".
.sig ? Foolish otaku --
Are you kidding me ? With the pervasiveness of some of the "content-based" site mongering out there, you'd think that they were offering "How to do Neuro-surgery in your bathroom" as their content.
When you've got a site that's listing codes for a video game, you've got to be kidding me, if I'm going to pay for the review ( that I have to sit through a rolling or popup ad for...over, next-to, or before, I can see ), why would you pay for a video clip of a game ( it IS an AD after all, call it what it is, for crimoney's sake ).
Look, it's very simple, what you're talking about is applying "intrinsic value" to "something". And frankly ( and I'm not the only one saying this ), most "content-based" sites are very much "trivial use". Notice I didn't say "ALL", I said most. Some, like a site that offers you "Dreamweaver templates" ( and frankly, for me to pay for a template, it better be ONE HELLUVA template ), I could see paying a one-time charge for downloading the code for that template ; if in fact it was going to save you HOURS and HOURS of coding. But sites such as those, and the WSJ ( Wall Street Journal, I know, I know, I said a bad word around here ), may offer REAL convinience ( i.e. alternative to having to pick up the soggy paper because the paperboy ditched it into you pond of POI because you didn't give him a xmas bonus ).
And for your "We pay too much broadband" weinies", what do you think it cost our folks and grandparents in today's dollars to pay for those highways and turnpikes ( as bad as they might be in some places ) we criss-cross the country on ? Peanuts ? Broccoli ? I don't know what the figure would be in today's dollars, but I remember my Dad telling me it was amazing to think of "All that money" going into the national highway system. That's for your cheeser cheesers in the valley and north east who don't think that any of their dollars should go to helping someone in the mississippi delta get broadband ( think about that the next time you want to order freshly caught shrimp from Bubba Gump).
Then again, $49.95 for ~1.5Mb DSL is a JOKE ! *are you listening Bellsouth *
Listen carefully, and repeat after me, "I will play on the next easiest level. I will not pay for cheat codes. I will not pay for preview clips of a game that's going to cost me $54.99 at EB, and will be 9 months late the day I buy it(but don't get me started on that)".
-- What ? You thought I'd have a
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.
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
but if your goal is for information to be free for everyone, I don't think micropayments are going to work either.
ummm. The point of micropayments is to have information not free information. THEY are mutually exclusive.
I was critiquing the free information idea.
The most obvious solution to this problem is to charge different amounts depending on the economy of the viewer. (regarding poor people in India)
No, no no. You charge so as to have profitability (or perhaps maintainability). The person in India CAN'T AFFORD the information. It can be "given" (read exchanged for something of lesser value), but that's it. This is sad, but there are many things Indians cannot afford. One of them may be sophisticated U.S./EU internet delivered information.
Information may want to be free. But, in fact, it's really the only thing that has value.
So close and yet so far from the world's perfect ID number
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.
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
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.
Subcriptions to web-sites generally cost 10's of dollars per month.
I still consider it a micropayment system since it's a lump sum (and a small one at that) of micropayments over a large period of time of no less than a year to make the transaction worthwile.
It's not dishonest. It's a recognition of the fact that the structure isn't in place to do tiny transactions. The viable system at this point I think is lump sum. Yes you pay more upfront, but over time it works out to very little. 1.4 cents a day.
That's why I consider it a micropayment type system. You're paying very very little.
Ben
Work Safe Porn
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!
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.