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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.
"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.
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.
"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.
Why must everybody make this sort of silly comparison?
Okay, I'll field this. People make these sort of silly comparisons because in their own minds they are equivelant. Obviously to you they aren't but for many people such a comparison as the one above is completely valid.
--- I do not moderate.
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.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 $.25 - some sites have "try free for a day, just givde us your Visa number" but that's a well-known scam anyway) and just get to the handfull of images/movies/whatever I visited the site to get. Basic economics... and it could be applied anywhere.
But the porn people have the most desired content online. They know it. They could make it happen. Either they have chosen not to, or they haven't gotten it to work yet (and I'll admit that I've not found a site that's tried), which tells me that either the interest isn't there or it's just not workable.
So, all I can say to the people screaming about micropayments is, if the porno sites aren't doing it, the rest of the web won't either. When they get around to needing to grow their market again, they'll make it happen, and suddenly the idea will be more palatable to everyone.
Comments?
-- I wanna decide who lives and who dies - Crow T. Robot, MST3K
The problem with all these site is they want you to *subscribe*. Fileplanet is kind of cool, and when you want a file from them, it might be worth a buck or two to get it from them. BUT, they want you to pay 7$ 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
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
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.
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