Slashdot Mirror
Responses to Clay Shirky on Micropayments
FrnkMit writes "Others besides Slashdotters have responded to Clay Shirky's latest article on Micropayments, including long-time micropayment booster Scott McCloud and the MIT Technology Review."
← Back to Stories (view on slashdot.org)
Registration, however trivial, is ultimately inconvenient to the casual browser. These individuals are likely dedicating a minimal amount of effort to your website.
Do you like German cars?
Any article mentioning Scott McCloud must of course include the views of two of my favourite philosophers.
(P.S. If you read the news article that goes with it, you'll see that the comic is actually about micropayments.)
I moderate "-1, Fool"
Nanoprofit!
... is that there's so many to choose from. The problem is all these micropayment systems don't interconnect with eachother. If I were to sign up with BitPass, I would have to pay $3 even though I need it only for a purchase of $0.25 The same goes for any other micropayment system. I think micropayments should be handled in a decentralized way, all the way from your ISP bill to the target vendor, using so-called "micropayment banks" in the process.
Make even shorter URLs - 8LN.org
If micropayments ever become ubiquitous, I think we'll start seeing the old "salami slicing" hack again. When a lot of stuff you do online costs a nickel here, a penny there, a dime elsewhere... you can rack of some pretty serious numbers of transactions just browsing around. After all, if loading that New York Times article linked to from Slashdot is only 2 cents, who cares, right?
But perhaps some clever fraudster will see an opportunity here. Wouldn't it be easy to steal 1 cent a month from 1,000,000 people who use micropayments? After all, who's going to notice a line item titled "News article ----- $0.01"? So there's $10,000/month that nobody's really going to miss.
And for a single penny, would most people take the time to make a phone call or write an email to request clarification on where that charge originated? Even if all you make is a pitiful $3.60/hour, that one penny takes a mere 6 seconds to earn, far shorter than the time it would take to investigate. And is the micropayment company going to investigate your 1 cent dispute? Likely they would ignore you or even just automatically refund your penny without much thought.
Want to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
The article is spot-on, for specific kinds of content, but I think its conclusions are wrong.
Clearly no-one will pay even a dime for content that they can get elsewhere for free. It's true that the size of the payment is less important than its simple presence.
But there are other things we happily pay for, and micropayments are a basic necessity if we want to get those things digitised and available on-line.
In Belgium, where I am, people are using premium SMS messages for micropayments. It's incredibly inefficient: a Euro1.00 message returns at most 60% to the website owner. Yet this is becoming a more and more popular way of charging for access to dating sites and other web sites people are happy, eager even, to pay for.
Micropayments to reserve parking spaces, to place small ads, to search for appartments, to post a CV to a job site, to chat with remote friends, to get news on what's happening downtown, to vote for pop starts, to play games, to access porn,... the horizons are vast and limited today only by the complexity of linking the consumer's wallet and the vendor's account.
What's missing in the micropayment world are two things, AFAICS. One is government support to mandate norms and standards backed up with legislation and consumer/supplier protection. Two is support from the banking industry in the form of accessible implementations available to small vendors.
Ceci n'est pas une signature
I don't think I have ever subscribed to online content where I had to pay money. Another thing I don't do, which Clay mentioned in his article, is sign up to the people who force you to fill out their questioneers to read their content. I have definitely found that I can find the information through Google via Usenet which, despite people claiming is dead or whatever, is a very good resource for many types of info, including world events in which the posters themselves might be taking part in. So being an average consumer myself, his words ring very true to me.
Zen
Insolvency! :-)
Do you like German cars?
A point in the MIT piece shows that they do not really understand what they are talking about. They say:
"A micropayment system like BitPass would allow consumers to experiment with new content but also to place their support behind specific artists whose work they find consistently rewarding and interesting. Ultimately, they are paying for only the content they consume--and not shelling out a fixed sum every month."
In other words, they see pay-as-you-go as a benefit to the consumer. Problem is, the consumer does not view it as a benefit; rather the opposite.
A number of studies have shown that people greatly prefer a fixed-cost structure over use-based payment - even when they demonstrably would save significant amounts of money by switching over. People find the need to constantly decide whether a given use is worth the money; and to feel they constantly have to monitor and aveluate their usage spending to be a burden that is disproportionate to the amount of money they would save, even when the amount is quite significant.
I know that the most liberating aspect for me of going for a fixed line, rather than using a modem, was not the speed, but rather the liberation of being online at all times, using it whenever I wanted without worrying about telephone charges (local calls are metered in most of Europe).
So, no, I do not really believe in "micropayments" in the sense they are talking about it here.
Trust the Computer. The Computer is your friend.
Metafilter
Les Jones
Bruce Landon - landonline
City Comforts Blog
Marginal Revolution
Long story; short pier
Tom Maszerowski on Livejournal
bbCity.co.uk
But cutting to the chase, if a good micropayment system does get invented, then it will seriously lower the bar on the "tip jar" concept. The overhead of deciding whether you want to spend a cent here and a cent there (especially on a site that you can't sample for free) is enough of a headache (even at low risk levels) to drive people away, but if your favourite webcomic has a tip jar, you might throw in a dime a day, or even a penny a day (he said, shamelessly resorting to Americanisms). Those things can add up if you have a big readership, and can overcome the expenses that Mr McCloud points out with regards to bandwidth and success being its own worst enemy.
As for the sites that want to try the "you must pay me 25 cents in order to see this page" approach -- feh -- let them take their chances with the free market; I won't resent them in the unlikely case that it works. But in my not-particularly-humble opinion, voluntary payments will be the way to go (see second and second-last paragraph of linked Cringely article).
proof, n. A demonstration that a conclusion is implied by certain premises and axioms.
McCloud makes the point that no-one is going to pay for Joe Random Blogger's thoughts, But they will pay 25c to an artist who they know will give good value. 10 million iTune users can't be wrong.
Personally I'd rather pay 25c to give a site a try than give away my credit card details and subscribe for a year to a site I might never read.
And you can join BitPass using PayPal - so its hardly difficult. And yes I have. And yes it is worth 25c.
From the article: [I]Analog publishing generates per-unit costs -- each book or magazine requires a certain amount of paper and ink, and creates storage and transportation costs. Digital publishing doesn't. Once you have a computer and internet access, you can post one weblog entry or one hundred, for ten readers or ten thousand, without paying anything per post or per reader. In fact, dividing up front costs by the number of readers means that content gets cheaper as it gets more popular, the opposite of analog regimes. [/I] Does this person think that web hosting and bandwidth are free? The reality is completely the opposite if you look at things like webcomics, where popularity will literally bankrupt the artist, as they gain too much traffic to live in free webspace.
Auto-reply to ACs: "Truly, you have a dizzying intellect."
Hey why don't we tie these micropayments into the web surfing license and your bank acount and a new and revamped new total information awareness system..... that way both industry and government will be able to track my spending and reading habits - it's certain to catch a few terrorists and pedophiles well worth the risk hey!
I mean, I trust people like Ashcroft with this, after all he even let me see his staffers "anti-terrorism" certified university degree (no real unis would recognise his "life experience" but they certified her).
</sarcasm>
You know, the thing that scares me the most isn't all the potential of that technology..... it's that I felt I had to include a sarcasm tag because people wouldn't get it. That says alot about current political climates, that's what f*cking scares me.
Being an "artist" myself, and even having vague plans at earning my money with this after my (unrelated) study, I'm afraid I must disagree with McCloud saying that art isn't a commodity.
;-)
Funny though that Dictionary.com has a rather interesting definition of the word "commodity" with relation to McCloud's comments, but I'm sure that McCloud tries to say that a commodity is "something that you can just take for granted".
We may not realize this, but our "modern" culture, like any other culture before it, relies on the availability of the art that underwrites it. Belonging to a culture is still something that is expressed through music, art, fashion and religion. People don't like restricted access to culture. Music, cartoons, whatever art it is that you like, it becomes part of your life, and part of your culture. (Striking example: how many `80's songs do you like to hear, while you agree at the same time that they suck -- just because you grew up in the `80's and you can share something with your friends through this music?)
Life, even in our Western world, would not be so nice if we all threw out our stereos, radios, comic strips, TV's, bioscopes, monuments and ALL other ways in which we access art, and thus culture.
Art is a gift to culture, and should thus be a gift to the people. Like anyone else, artists should make a living. They should definately find some way to calculate their hours of work into their products. But the art should be free for all of us willing to enjoy and extend it (bar stuff like trademarks that put some structure in the "development process" of our art).
Now get out there and start making business models again!
"We can confirm that Debian does *not* ship the version with the trojan horse. Our version predates it." [CA-2002-28]
I am curious, does anyone know how much some of these programs that solicit donations make a year? I have seen a few fail, who had this system in place. I know DeadAIM went to a forced donation system, because they weren't getting enough. They seemed very open about this fact. I know probably close to 50 people who have spybot, and would never think to donate. I think the tech people who are aware of the things these people go through to make these programs do donate. The general public though doesn't, and they are the one's who use the majority of these resources. It would suprise me if many of these projects made enough to cover their hosting costs, let alone enough to quit their job, and make some good money.
One only has to look at the Internet adult entertainment industry to see that micropayments are already a working solution.
People will pay for content if it's something they actually want. Micropayments using a prepaid scheme are much more attractive than conventional credit-card systems because they are (a) anonymous, (b) transferrable, and (c) cheap.
I think the discussion in the article is entirely skewed because the author looks only at conventional content, and even a cursory look at the Internet demonstrates that supply far outweighs demand: there is an almost inexhaustible supply of prose, music, humour, and news. Why would you register for such content, let alone pay for it?
Basic economics: make something people want, and can't get elsewhere, and they will come and pay for it.
Blaming the payments scheme for weak products that no-one wants is surely a mistake.
Ceci n'est pas une signature
Micropayments might be more appealing if managed by 'public trust' rather than 'dot-com.'
I haven't entirely thought it through, but is that better? Worse?
Here's what I do: Bitty Browser & Andromeda
pay for a link? never!
if they sucside, i'll trash my computer and apply for a library card, thank you very much.
Whether micropayments can work, or even defining what a micropayment is, seems a bit besides the point when we don't have e-currency.
When I use the term "currency" I don't mean some private company's wishful thinking about taking over the job of the federal government. Anybody who thinks that the establishment of the currency is not the job of the federal government and can be left to Citibank or Banc America has a very limited grasp of the Constitution. And as for some Johnny-come-lately start up issuing the new coin of the realm. Well, it's an ambitious goal, but there are some major obstacles in reality. You might not notice them till you get big enough to attract attention, but they're out there.
So all this speculation about how e-currency will be spent and what will constitute a micrompayment and how the technical details of how the exchange will be handled is jumping the gun. And it's the same thing with any kind of e-commerce. The arguments are all hypothetical until there is a genuine currency.
Traditional retailers depend on compulsive buys in a big way. The very archictecture of retail businesses is organized in a fashion that will promote compusive shopping to the greatest extent possible. In this sense, micropayments already exist, work and can even be considered essential to business. What does not exist is e-currency issued and backed by a government.
Virtually every major consumer service provider is moving towards flat rate pricing. It is far simpler for the service provider and far simpler for the consumer. Not only is it simpler, it is also cheaper. The service provider saves a lot of money on billing which is priced as a function of complexity. Flat rate packages provide a great value for the consumer and also simplify the consumer's finances. There is good reason that millions of consumers are moving to flat rate service providers.
As a micropayment system is complex and costs a tremendous amount of money to implement, staff, and maintain, the consumer can expect costs to be higher when using this sort of system. I might add for emphasis that only a fool would think the higher costs are not going to be passed on to the consumer. Not to mention that the consumer now has to track their own actions on a minute scale that will take lots of time. Imagine instead of having one "pay per view" system to keep track of, you now have 17 "click per view" systems to worry about. It is like every channel on your satellite TV having its own pay-per-view system and account. It's not something many people would willingly sign up for, that's for sure.
So why do some companies want to buck the big flat rate trend in consumer pricing and create high complexity micropayment systems?
The answer is simple -- they want your money. With micropayments, a service provider gets your money up front, gets to keep your money in an account which generates float revenue, and is in the superb position of forcing the consumer to spend the money on potentially uninteresting things in order for the consumer to feel the money is not being wasted. Many micropayment systems have no way of getting your money out.
However, the biggest reason companies are pushing micropayments is that if they can shift the consumer's expectations to think "every time I do any little thing, I am going to pay", it will be a giant door opening to much higher prices for everything you do in life.
Check your ATM balance? Costs money. Press play three times on that song vs. once, costs extra money. The list will be endless. Micropayments are also a way to do an end run around "try before you buy". Instead of free song samples or free content samples, you'll be told "don't worry, it's micropayments."
The major banks have done large computer simulations and they have found they can make far more money using hard to understand variable cost transaction fees than they can using any sort of flat rate fee model. Now the banks are even more clever in that they combine the best of both worlds -- they package up seldom used services and charge a flat fee and then take more commonly used services and charge the variable rate transaction fee. Of course merchants will copy the banking system models and implement fee-based pricing that also allows you to go into negative dollars, so you will owe money. And don't forget the "micropayment account overdraft fee". Which will not be a micropayment, I guarantee you.
The heart of the matter is that micropayment systems are driven by greed. They are not driven by any desire to deliver value to the consumer. They are created to force a complex intermediary between the consumer and the service provider. The costs of this intermediary are significant and they are passed on to the consumer. The economic models that drive micropayments favor maximizing profits for the service provider.
All in all, micropayments are abuse waiting to happen. Consumers have avoided them like the plague for good reason. Though it's hard to believe, consumers want to hold on to their money. Pricing model studies have shown that they are tired of getting nickel and dimed to death. Consumers want clear value and the peace of mind that they can use a resource without the worry of variable fees sneaking up and biting them. No one has the discretionary money or discretionary time anymore to worry about the complexity of adding many new payment systems -- neither consumers nor service providers. Maybe one day in the future, micropayments will make sense. But I don't think that day is today.
Micropayments, small digital payments of between a quarter and a fraction of a penny, made (yet another) appearance this summer with Scott McCloud's online comic, The Right Number, accompanied by predictions of a rosy future for micropayments.
To read The Right Number, you have to sign up for the BitPass micropayment system; once you have an account, the comic itself costs 25 cents.
Right there. Did you see that? That's the problem with micropayments.
I don't know this guy and I don't know his comics. Why am I going to hand him a quarter to read his stuff?
Sure, if he is already established in his niche on the 'net, he can make a good living. But, if you are just starting our, micropayments will guarantee the death of your site. No one will pay for a site, um, sight unseen.
I'd love for people to pay a penny to read my weekly London Journal, but I know if I asked for it first, I would never get any new visitors.
The total invasion of privacy inherent in the micro payment model is beyond belief. A micro payment record of each and every place you go or document you read etc. The ability to profile people to this degree is the dreams and aspirations of those who would have a totalitarian state.
Unless they can figure out how to deduct micropayments from a phone card or some other device that can be bought locally for cash over the counter, they better nix that idea but quick. Come to think of it, there's no good reason to give out a persons whole credit card information or even their name for that matter for anything viewed or downloaded directy from the internet. Identity theft or credit card fraud can't happen to you if you never give out that information. No computer system administrator in their right mind would surf the internet with their "ROOT" account so why do we all make purchases on the internet with our "ROOT" credit card accounts. We need cash user account cards for our credit cards or prepaid Visa or Master card debit cards. Then figure out how to use micro payments with them. First things first.
On the face of it, government involvement seems like a good idea. However, what about all we non-US citizens? Could we all count on our respective governments to cooperate and allow micropayments to really flourish? Or will 'international' users find themselves unable to access bits of the web?
I'd much rather see the internet community develop a useful standard that can be easily adopted by vendors...perhaps such a thing already exists? A technological solution is always better than a government mandate.
I have micro-interest in micro-payments. This is an idea that belongs on the ash-heap of computerdom along with Flooz.
There is no Constitutional right to privacy, in reality. Maybe that is why this "right" gets endangered so much: it doesn't exist.
I think it should exist, and we should get a Constitutional amendment (as long as it does not include violence against other human beings as a "private" act.). Until then, this right does not exist.
"I just heard some sad news on talk radio - the voice of Captain Murphy, Harry Goz, (link - link) was found dead last week"
What is even sadder is that this "Goz" guy's career was such a failure that no-one ever heard of him until he died.
If you are walking down the stret and someone asks you for a penny, would you always give it to them? Every time? It's just a penny - if you saw a penny lying in the street odds are you wouldn't even bother to pick it up, unless perhaps to feed your superstitious side. Maybe we ordinarily would but have already given out all the pennies we had in our pocket. Maybe we have an ethical objection to handing out pennies to whomever asks for one. Or maybe we're just having a bad day and don't want to be bothered. Still, one can reasonable argue the simple act of giving someone a penny should be well within the capabilities of even the poorest of us.
But once you move online that penny represents an entirely new barrier. It represents the wall between those who play the system (however badly) and those played by the system. Not everyone has a credit card. Not everyone has a debit card. Furthermore, many people, despite the fact they could have one of these wallet size icons of mass consumerism, don't want one. And it's not because they don't like buying stuff, or because they're too cheap to give you a penny if you were to ask them face to face.
Charging for content online places a barrier between the creator and the audience that goes much deeper than the same model in meatspace. And it's not necessarily an economic one, although it very much can be. Mostly, tho, it's a barrier of philosophy, and it sets the wrong tone for the future so many of us allege to believe in.
The entire promise of this new distribution mechanism is it puts creators more directly in touch with consumers. That some creators are going to work within existing economic structures is to be expected and, frankly, I say more power to'em. But this is a choice for the creator that does not directly involve me: if someone puts banner ads on their site to help them pay the bills, that involves me only passively. Moving to an escrow agent, however, forces the consumer (me) to play an active role in that exchange - even when "it's just a penny" and even when the mechanism is "transparent" at the point of sale.
If this succeeded for the Internet, where would it end?
Just consider the idea of surfing applied to the physical world.
Imagine some sort of transceiver device in your automobile which automatically charges micropayment tolls just for going down certain roads.
On the face of it, government involvement seems like a good idea. However, what about all we non-US citizens? Could we all count on our respective governments to cooperate and allow micropayments to really flourish? Or will 'international' users find themselves unable to access bits of the web?
I'd much rather see the internet community develop a useful standard that can be easily adopted by vendors...perhaps such a thing already exists? A technological solution is always better than a government mandate.
Lets face it; over the last few centuries, who is it that has managed to develop several convinient systems for transfering money internationaly - often embracing the latest technology to do so? It's not the various goverments... it's the banks. The banks needed a way to transfer money from one place to another without physicaly moving it, so various system was developed. They even manage to make a profit out of it.
Now, if the banks got their act together and launced a simple to implement system for micropayments - possible just nationwide as a start - I believe that it might take off. As more and more people saw that the system worked, more and more would pick it up; allowing, for instance, slashdot-readers to pay 0.01 cent to the owner of the website we're pounding into rubble, allowing him to pay his ISP for more bandwidth for a limited time. Off course, this could work for pr0n as well, letting you pay for just the pictures / movies you download rather than to pay for all the crap you'll never bother seeing once you realise that all the stuff you just handed over ten bucks for sucks chunks.
Everything in the world is controlled by a small, evil group to which, unfortunately, no one you know belongs.
In fact, the good stuff is becoming easier to find as the size of the system grows, not harder, because collaborative filters like Google and Technorati rely on rich link structure to sort through links.
I disagree. If I type in 'good weblogs' to google, I still get a bunch of crap I'm not interested in. Why? Because my idea of a good weblog doesn't necessarily match up with everyone else's.
Especially for a comic artist, where the content is inherently visual, it would NOT be hard to adopt a distribution mechanism that was, essentially, free. Put a panel on every comic linking to the author's site: those who like the content will visit, those who don't, won't. Put up a tipjar, or even offer an "early bird" subscription service (ie get the next edition a week before the "free" channels, etc.). Because casual fans can get the comic completely free of charge to the author, the website traffic will be comprised of people who are predisposed to contribute. Ergo, those "hits" are actually worth more to the author than would be otherwise.
devise. it would reek of corepirate nazi censorship to US, if it worked at all.
.compliant. if you think that you are already compliant, & it's somebody else, consider this a chance to rat them out, to gain re-admission to the onLIEn wwwhirled again, (c SourceForgerIE(tm) all rights reserved, you have none).
/.puppets.
.asp on that. when the lights come up, there'll be no going back, & no where to hide.
coming soon to/already on, yOUR desktop/network?:
Due to excessive bad posting from this IP or Subnet, comment posting has temporarily (permanently, if we could figure out how to do it) been disabled. If it's you, consider this a chance to sit in the timeout corner. If it's someone else, this is a chance to hunt them down. If you think this is unfair, we don't care.
alert: you've been lax in yOUR payper liesense 'upgrades', you're out.
alert: there's a rumour that you've been badmouthing/lowrating the corepirate nazis, & the naykid furor of the felonious kingdumb, you're out.
alert: looks like yOUR kids have been listening to music again, you're out.
alert: although you appear to be browsing regularly, you've failed to make a purchase recently, you're out.
consider this a chance to stare at your monitor screen, & plan how you can become
etc... lookout bullow. these foulcurrs haven't a clue yet, as to what J. Public can do, once he's peaced off. they live in a tiny wwworld, consisting of only their owned greed/fear based goals. they should get ready to see the light.
we're building a vessel that floats on almost any suBStance.
as to the newclear power/planet/population rescue initiative:
it's all free (as in survival), & available immediately to you/all of US.
as you can maybe already see, yOUR survival/success is not the least bit dependent on the gadgets/combinations of the greed/fear based corepirate nazis, & their phonIE ?pr? ?firm? buyassed
consult with/trust in yOUR creator. more breathing. vote with yOUR wallet (somtimes that means not buying anything, a notion previously unmentioned buy the greed/fear/war mongers). seek others of non-aggressive/positive behaviours/intentions. stop wasting anything/being frivolous. that's the spirit.
investigate the newclear power plan. J. Public et AL has yet to become involved in open/honest 'net communications/commerce in a meaningful way. that's mostly due to the MiSinformation suppLIEd buy phonIE ?pr? ?firm?/stock markup FraUD execrable, etc...
truth is, there's no better/more affordable/effective way that we know of, for J. to reach other J.'s &/or their respective markets.
the overbullowned greed/fear based phonIE marketeers are self eliminating by their owned greed/fear/ego based evile MiSintentions. they must deny the existence of the power that is dissolving their ability to continue their self-centered evile behaviours.
as the lights continue to come up, you'll see what we mean. meanwhile, there are plenty of challenges, not the least of which is the planet/population rescue (from the corepirate nazi/walking dead contingent) initiative.
EVERYTHING is going to change, despite the lameNT of the evile wons. you can bet your
we weren't planted here to facilitate/perpetuate the excesses of a handful of Godless felons. you already know that? yOUR ONLY purpose here is to help one another. any other pretense is totally false.
pay attention (to yOUR environment, for example). that's quite affordable, & leads to insights on preserving life as it should/could/will be again. everything's ALL about yOUR motives.
that old tune title (hope we don't get 'busted' for using it) "make the world go away", takes on new/varied meaning in these times.
the prevalent notion that 'everything will be taken care of' without yOUR knowledge/participation is insidiously misleading.
in our estimation, the biggest 'threat' against US (asid
The key to micropayments is to use existing customer relationships. Mobile phones are a good example - you can buy access to information or services by sending an SMS to a specific phone number. The payment comes onto your phone bill and everybody is happy.
I am currently involves in implementing micropayments for gaming services, and it works great.
These systems are absolutely not anonymous. Most payment systems require affiliation with either a bank or a credit agency, which means every single purchase can be tracked.
I think the discussion in the article is entirely skewed because the author looks only at conventional content, and even a cursory look at the Internet demonstrates that supply far outweighs demand: there is an almost inexhaustible supply of prose, music, humour, and news. Why would you register for such content, let alone pay for it?
And you hold up porn as an example to counter this? The level posted to usenet seems to be down the last month or two, but there still has to be at least as much "free" porn out there as "free" music.
Let's talk Suze: there are two newsgroups dedicated to posting her work. If you're a patient sort you could accumulate every photo she's ever taken and it won't cost a dime. But now, years after the first works went online, Suze still manages to sell memberships to her site. You think the only ones who are buying memberships are those wanting to rip the entire site and are too impatient to wait for everything to be posted to the "free" channels?
Your post didn't make sense. Even if it did it wouldn't have been funny. Flamebait was absolutely the correct moderation in this instance.
You be sure to let us know when an anonymous micropayment system arises from the froth, won't you?
Well, just like (most) other countries don't use the dollar, it seems like each could have it's own micropayment.
Perahps the micropayment value could be hitched to the national currency value, and so the exchange rates would follow between countries, just like regular money does.
Here's what I do: Bitty Browser & Andromeda
It isn't free to produce good content. No, most weblogs don't count as good content. A journalist might charge (say) $500+ for a decent size article. You have to add hosting and bandwidth costs to that - obviously, whatever Shirky says, it's not just as cheap to serve 200,000 pages as it is 1.
Good free content on the internet at the moment is supported basically by advertising. Either directly through banners or google ads, or indirectly, through advertising some offline publication or organisation. Newspapers reprint stuff online as they have already paid the cost to have it written, so they might as well get some advertising online.
At present CPM rates, without some other (offline) form of support, you need a lot of page impressions to break even. $8/CPM/page? Thats 70,000 page impressions or so to start making money, and you're squeezing the article in around 4 banners.
So, in order to make money the sites need alternatives. Split the article over five pages instead of one - sure, it annoys the reader, but we get more page impressions per reader. Add more intrusive advertising - pop-ups, salon.com style ads? Again, annoys the reader, but more money.
Annoying readers isn't a good long-term business plan.
So, charge subscriptions? This puts a huge mental barrier in the way of your customers- what if newspapers were only available in 6 month subscription editions? I'd be interested to know how much money Slashdot makes of its 'premium service' subscription system - I hope it works.
So that leaves micropayments as an alternative. I really think there is a chance that they could work, if properly implemented.
Nothing personal against Scott McCloud, I wish him the best, but he and other micropayment proponents think micropayments are a good idea for 2 reasons:
1. It's good for them (i.e., they get money)
2. They desperately WANT micropayments to work because it would be good for them
(aka "Wishful Thinking")
A year from now, when BitPass has joined a dozen other companies on the micropayment scrapheap, Scott's wishful thinking will continue to prevent him from recognizing the fundamental flaws that doom micropayments to failure.
Clay Shirkey's pieces on micropayments have their share of flaws, but overall he's done a good job of describing why micropayments don't work.
What is needed is a way to keep the micro-decisions away from the consumer. You should be able to pay one macro fee, say $10/year, which gives you access to a network of participating web sites. Then you visit those web sites as much as you want without worrying about per-article costs, and behind the scenes they work out how they share the revenue. I figure that's how those Adult verification services work.
There would also have to be the option of anonymous transactions, which could be accomplished by purchasing a prepaid card similar to what is done with phone cards.
Of course, there would have to be a small number of such networks otherwise you'll end up paying for dozens of $10/year subscriptions.
---------
There is inferior bacteria on the interior of your posterior.
The question isn't whether we will pay for content: We already are.
By and large most of us do not pay for content. How many of us buy magazines that are supported primarily by subscribers? They do exist, and their sales are marginal.
We tend to pay for the physical item or the name or other costs. Why else would we have no problem paying a dollar for a newspaper, but nothing to get it online.
In others, we may prefer to pay only for the content we want to access. This is not a novel situation; after all, many of us subscribe to some publications and purchase others off the newsstand when a particular issue has content that seems interesting, or when we feel we have time to read them.
True, we will buy a single issue of the magazine, but we do buy the entire issue. We do cut out the six pages of the article, put the magazine back on the shelf, and then ask the store to charge us only for those six pages. A single issue is not micropayments. A single issue is most often way of delivering a demographics to an advertiser If customers started cutting magazines up in stores and took only the ad free pages, I suspect the publishers would be quite unhappy
Similarly, most of us will subscribe to a finite range of Web content--just as most of us subscribe to only a few (if any) premium cable channels. /. service is not really micropayment either.
This is true. The WSJ and NYT presumable has customers for their online subscription services. However, these are not micropay. The
For cable you pay the same for the service no matter how much you use. The exception is pay per view, which is not micropayment. PPV is an additional service in addition for your subscription.
I believe that micropayments are not viable and is a response to a screwed up advertising model created when this web thing got going with ad supported pages. Instead of pushing internet ads as the traditional branding strategy with the added benefit of direct customer connections, the ads were promoted as a way to immediately sell product. The ads were also grossly overpriced and this lead to waste in infrastructure and management(/. pt cruiser? Thousand dollar chairs?). I believe that the web can provide a good value to advertisers, if we would just stop pretending it was a TV or magazine.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
So, I read the Technology Review article which said that "The Right Number" was really good... and I navigated to The Right Number to check it out.
Frankly, $0.25 per comic seems a little high to me. After all, the dead-tree Boston Globe costs $0.50 and contains more than 25 comic strips (only $0.02 each), at least five of which I really like and read every day.
And I found out that I can't just buy $0.25 worth of BitPass, I need to commit to $3.00 worth. And I thought about it a little, and tried to decide what were the chances that I'd really use the full $3.00 worth, or whether it would end up being wasted. It's not that $3.00 isn't such a big deal, but it does exceed my personal threshold for buying without even thinking.
(And this is consistent with my behavior in other real-world activities. It's only when long-distance calls dropped to $0.05 per minute or less that I stopped thinking about whether or not I needed to make the call.)
It's not just the $3.00, it's also the business of yet another account to keep track of... and if it's a real-money-related account I try to keep track of these things fairly closely. I can't possibly use a unique password for everything, so I sort of categorize them.
There's a "practically-no-security" category that I use for things like New York Times article registration: the "I couldn't care less if someone else reads 'my' New York Times article" level. I don't quite want to publish that password on Slashdot, but as far as I know I could with no ill effects (other than helping identity thieves improve their social engineering).
There's another category for information that I don't really want people to know, but for which can't see any obvious possibility of financial damage if they did. I don't want strangers to view my membership in a certain fraternal organization and find out how many years I've been a member, but, hey. Maybe Ashcroft cares, maybe a con artist could use it... sure it's paranoia but I'm a little careful with these accounts.
There's another category for sites where stuff can be ordered but only sent to me, or where money can be transferred, but only between my own accounts.
Then there's the highest level of security, for what I call "real money" accounts. These are sites where an intruder with access could actually take money out of my account and end up with cash in their account. Or get high-value easily-resaleable goods shipped to them. These accounts get their own password, a written entry in a three-ring notebook, I give a copy to my wife, and check the accounts regularly to spot abuse.
Well, there's no getting around it--BitPass goes in that category. Even though it looks as if I could limit my exposure (e.g. to $3), and even though I don't think you can buy any high-value easily-resaleable goods with it yet, I'm still leery. I feel that I have to treat BitPass as a "real money, high risk, be careful" account.
So, before opening a BitPass account I thought I'd better check out "The Right Number" to see whether it's anything I really want to read.
What I saw was a free preview that used the most annoying Flash interface I've ever seen, and didn't show me enough to decide if I want to read even one of them.
The bottom line is that, for me this particular transaction did involve a significant "mental transaction cost," because of my concerns about opening another "it's-money-take-care-of-it" online account, and, even though I was willing to pay that cost, the final analysis was that the "micropayments" for this particular item were nowhere near micro enough to suit me.
"How to Do Nothing," kids activities, back in print!
The more I think about it, the less I understand why I am expected to use PayPal to buy a BitPass, then use BitPass to buy "The Right Number?"
Why can't I just use PayPal to purchase an individual copy of "The Right Number?"
If the payment involved fractional cents, I could understand it, but as far as I know it is perfectly practical to use PayPal for payments of $0.25.
Indeed, when I originally signed up for PayPal they specifically said this was one of the ways it was intended to be used and explained how it worked. If you had $0.00 in your PayPal account and paid someone $0.25, your credit card would be charged $5.00, the payee would receive $0.25, and $4.75 would remain in your PayPal account. Subsequent small payments would be made out of the account rather than the credit card.
The more I look at it, the more it appears to me that his refusal to accept PayPal except as a way to buy BitPass is just an artificial marketing restriction, intended to promote BitPass, and not a true business requirement for the comic-strip business.
"How to Do Nothing," kids activities, back in print!
For example consider the following question about minimum credit card charges. The retailer says that she pays Visa 3 percent of charges PLUS A FLAT 30 CENT FEE PER TRANSACTION. That's why Visa can get away with allowing one cent charges, because in fact the merchant still pays them the 30 cents (and loses 29 cents of course).
And it's not like 30 cents is what it costs Visa. It probably costs them much more than that per transaction. But they make enough money on the percentage of $1000 transactions that they can charge only 30 cents for a very small one. With micropayment systems, however, they have no big transactions to help cover the cost of the small ones.
So my argument is that micropayments can't work because of the fixed overhead. BUT, one thing is that when some people talk about micropayments they can mean some pretty big amounts. I saw one article that defined a "micropayment" as anything under $2.50. Come on, you can buy lots of actual real useful goods for $2.50 today. If you go to a store and buy a magazine for $2.50 is that a "micropayment"? I think not.
So I think there should be some discussion over the boundary line for micropayments.
To me micropayments are so small that you don't even think about them individually, and they are therefore charged a lot -- for example paying something each time you view a page on a site. The per-second charges on cell phones are like that (per-SECOND I said, that is, just pennies at a time) -- nobody really worries about talking for an extra second or not. Personally I would say the micropayment cutoff should be around one cent, certainly under five cents, but that's just me.
- adam
If I'd known responses to Clay Shirky's article would get their own thread, I would've waited. Here's a crosspost of my original response.
By way of setting up a straw man, Shirky asks: "Would you pay 25 cents to view a VR panorama of the Matterhorn?" As if one's personal preference for Matterhorn photography had anything to do with the success or failure of micropayments.
Make no mistake; like ALL business ventures, some people will fail with micropayments. Some will fail because they didn't know how to market their product, or because they set their prices too high or too low. But so what? That's endemic to capitalism, not just micropayments. Just because Crystal Pepsi failed doesn't mean capitalism itself is a failure. Engaging in these kind of arguments is a beginner's mistake, and most of Shirky's thoughts on micropayments surprisingly and unfortunately exhibit this same kind of sloppy thinking.
His "mental transaction costs" argument, for example, is predicated on users being forced to engage in one or two cent transactions every time they want to view a page. But most micro advocates have abandoned this line of thought. The idea of charging a penny-per-page is history. What they want in the 21st century is the ability to sell their products -- songs and webcomics, mostly -- at a fair price. And micropayments enable them to do that. Shirky endlessly flogs the dead horse penny-a-page model, but conveniently ignores the 99-cents-a-song model that's made iTunes Music Store such a success.
Scott McCloud himself writes that 1,354 readers bought Part One of "The Right Number" at 25 cents a pop. Considering that he was the very first BitPass seller ever, and that everyone who wanted to see his comic had to go through the effort of signing up for BitPass, that's remarkable, and worth talking about. It certainly flies in the face of Shirky's assertion that consumers on the internet are so lazy and indiscriminate in their tastes that they'll bolt to free content at the first opportunity. Scott's readers had to not only pay, but go through the effort of risking $3 signing up for a new, untested service. Scott's experience demonstrates that failure to get people to pay for your product has everything to do with your relationship to your audience and nothing to do with micropayments. But Shirky ignores it all the same.
Finally, Shirky's views on micropayments completely fail to address the idea that micropayments can work with other forms of payment, such as subscriptions or bundling, instead of replacing them. Buying content ala carte may be the step that convinces you to subscribe to a site, for example. Micropayments aren't an either/or, they're an and. One more choice, not one less. And of course, micropayments can work exceptionally well alongside free content. Any public television pledge drive shows this principle in action; even small tchotchkes can induce many people to donate. Any thoughtful analysis of the future of micropayments ought to examine this phenomenon, but Shirky doesn't.
In some ways, it's nice to see that Shirky hasn't changed his tune. At least he's willing to go down with the ship. But his analysis is -- by any standard -- unbelievably shallow. As the market for micropayment content increases, it will be interesting to see how he tries to spin reality.
He who refuses to do arithmetic is doomed to talk nonsense.
Even though a BitPass keeps you from having to give your credit card information, you still have to pay with a credit card OR with PayPal, and you still have to give information you may not want to give to PayPal. Bottom line - at some point you have to give someone information you don't want to give them.
I think the only way this will ever work is if you can actually BUY a BitPass at (insert omnipresent retail outlet here). If a BitPass were like a disposable calling card, I would think it would actually bring the mental cost down, the registration wouldn't be a hassle, and there would be no sneaking suspicion that this was all being tracked by some marketing company.
So I want to read the comic, but how long will I have this 2.75$ sitting around? Google searches bring up lots of blog entries but no one else seems to have bit (pun?) yet.
when Push Comes to Shove
Dang, I must recheck my systems. No wonder I've been starved of Suzeware recently.
But seriously, your point is well taken. However, newsnet only serves porn to a select market, namely geeks, while there is a huge population of one-handed surfers out there who would not know a uuencoded jpeg if it hit them on the ass.
Also, I have seen several adult pass systems that sell in nightshops, and this is entirely, totally anonymous. Buy a token in a shop, use it to micropurchase. And AFAICS it's only for porn.
As usual, if you want a good preview of technological directions, the adult entertainment market is a great place to start.
Just wish it was tax deductable...
Ceci n'est pas une signature
"The fact that a right is not enumerated in the Constitution does not mean that it doesn't exist."
It certainly does mean that there is no Constitutional right to privacy. The 9th Amendment is so vague: what of a "right to security"? It is just as much there as a "right to privacy".
No, it is not there. The only way to get it there is by amendment.
I'm 32 years old and don't have a credit card!
Yes, it's taken effort, but I have
achieved 32 years of existence without
the NEED for a credit card.
I DO have a paypal account.
- 1 hour = 60 minutes = 3600 seconds
- $3.60 = 360 cents
- 3600 seconds / 360 cents = 10 seconds / cent
Therefore, the one penny takes 10 seconds.So neither of you were right, but the OP was closer.
Those who sacrifice security to condemn liberty deserve to repeat history or something. - Benjamin Santayana
I read the counterpoint, in which Scott McCloud dismisses the economic problem of transactional cost, and demonstrates his misunderstanding of the economic concept of substitutable good, in both cases because he misses the fundamental economic concept of marginal cost.
This is most obvious when Mr. McCloud argues that art is not a commodity. Yes, but that doesn't change the fact that it's a substitutable good subject to the laws of marginal cost. This is one of the proven, observable facts of economics consistently misunderstood by those in the arts, usually using examples like his Hail to the Thief/Hootie and the Blowfish example.
There are, economically speaking, vast numbers of people out there where the marginal value to them of "Product A" is greater than that of "Product B". However, they'll still go with "B" over "A" if the costs of A exceed the marginal value A has over B. It doesn't matter whether the question is Coke vs. Pepsi, NYT vs. Wall Street Journal, Linux vs. Windows, or Monet vs. Michaelangelo, people will pick their ideal world second choice over their ideal world preference if the marginal costs exceed their marginal value.
Furthermore, this cost is not just in price. The decision whether to spend money or not always imposes a "cost", described as a "transactional cost", which Shirky pointed out. This cost in terms of micropayments may not be any higher than in supermarkets, as McCloud claims. It's still a marginal cost over the no-transaction-needed cost of free, and will convince people to leave for free content on its own, in addition to the marginal penalty of the actual charged price.
The only question is if the quality of your work -- your "brand name" -- is consistently high enough that the sub-group willing to pay for it is big enough that the free competition doesn't stop you from having a successful buisness model. In this case micropayments could work. But there are payment alternatives. There's the subscription model, where you have only one transaction a time period, and unlimited access to the valued content during that time. And there's the bulk purchase model, where a single large payment allows you access to much of the valued content.
Since the "transaction cost" is so large compared to the payment in each purchase under any micropayment scheme, the result is that a micropayment scheme will have a user-percieved cost much higher than a reasonably priced subscription or bulk purchase. So if your stuff is of such consistent quality that people will regularly pay for it, you will probably have both fewer customers and make less money with micropayments rather than a single bulk payment/subscription program.
That leaves micropayments in a very small, perhaps nonexistent market segment, between "not worth the extra cost of paying for" and "worth buying lots of it at a time". Can a viable micropayment exist in that space? Maybe. I'm not sure Shirky's right. But McCloud didn't respond to Shirky's economics except to say "Transaction costs don't matter and art isn't substitutable", both of which are clearly fallacious to anybody who's studied what happens in real-world economic situations.
The problem with micropayments is twofold.
The primary problem is that it is very difficult to create a financially profitable micropayment system for the operator. If you look at banks (in Finland we have a very efficient direct bank transfer system, top of the world, not cheques) and credit unions, they can not really handle anything less than several euros. Telcos are actually the most skilled profit makers on small transactions, but even their limit is around 10 - 30 cents.
It is possible to push the cost of profitable transaction lower, but it is not trivial. The proposed micropayment systems have usually focused more on technology than finance or customer acceptance.
The second issue is are people willing to accept the system. That is market psychology. Personally, I think that people are willing to pay even small amounts, but it has to be transparent and consumers must be protected from unforeseen charges. Most people pay for electricity and telephone per usage without thinking about it every time they use the service, because they know what kind of bill they can expect at the end of the month.
If you can design a system that protects the consumer from unforeseen expences and also protects the consumer from the fear of unforeseen expences (get it?), I believe that a micropayment system could be possible.
Disclaimer: My company is involved in this business and I have been working on a product that enables micropayments.
kiravuo
Therefore, the one penny takes 10 seconds.
So neither of you were right, but the OP was closer.
See how easy it is? I defrauded hundreds of intelligent slashdotters out of 4 seconds and only one person realized it.
Want to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
The real issue for Scott seems to be:
"Until then, we're left with a patchwork of hobbyists, bloggers, corporate promo, online mail-order and desperate screaming pop-up ads. The artists among us are relegated to noble failures and lovable martyrs--giving away their art for nothing 'til the rent is due and they have to go back to flipping burgers. I know far too many of these people to accept Shirky's placid scenario. They're tired, they're frustrated, and they're quitting in droves."
Well... yeah, that's the point, the "artists" among you are tired, frustrated, quitting in droves, giving away your 'art' for free because you =ARE= just a patchwork of Amateur Doodlers and Scribblers, hobbyists, bloggers, and burger-flippers who Aren't Good Enough to actually get PAID for that 'art' in the real commercial world!
"The artists among us" - Jeez get over yourself.
If you were R. Crumb people with serious MONEY would be knocking down your door to publish it.
What you and BitPass are trying to do is invent a new "Economy in the Margins" that lives in the cracks of the existing market system. And hey who knows, maybe with mass broadband and a way to meter teeny-weeny payments there might be enough customers to sustain a new micro-market economy.
Although, that very same scheme has failed in various forms over the years for game programmer wanna-be's who write their first Doom mod and figure someone somewhere must be willing to pay a couple bucks to play it. Bzzzt sorry, the free stuff is just as good, and as soon as it becomes Real Good (ie Commercial Quality), surprise surprise, along comes a commercial publisher willing to publish it in the existing commercial market.
Don't quit your McJob just yet.
--FourPak
One only has to look at the Internet adult entertainment industry to see that micropayments are already a working solution
Really? Which sites offer micropayments? I see lots that have subscription services, but none that use micropayments.
Perhaps you should read his article?
People will pay for content if it's something they actually want.
Again, read the article - he's not saying that "nobody will pay" - he's talking about how they'll pay.
I think the discussion in the article is entirely skewed because the author looks only at conventional content
I think your comment is entirely skewed, because you haven't read (or if you have, you haven't understood) Clay's article.
Adult websites typically charge a flat fee for access - as in you pay $X, and get to see everything the site has.
Clay isn't talking about that - he's talking about paying $X, and getting to see 100 or 1000 articles.
Really. Read his article (especially the part about mental transaction costs), and try to understand what he's saying.
Easynews has become the god of usenet. They're huge. And they're not the only one. There are several newsgroup services offering a user friendly web interface these days, and it's attracting a LOT of people. Hell, I don't even use news reader software for most groups these days - it's far easier to fire up reget and shop via the web.
So far as the user is concerned usenet is now the web. If you want to talk you can use google and you have access to the entire archive of discussion groups going back at least a decade. And if you want binaries you can do the same thing - for a very modest fee one can have access to everything posted in the last month. tens of thousands of songs, hundreds of movies and music videos, just a click away.
What "adult pass" systems have you seen in "nightshops?" Are these like the "paid value" cards that allegedly sell in pawn shops? (I've never seen one.) Or are they limited to certain sites? I once got a subscriber pass to "Barely Legal" when I bought a buncha stuff at the Hustler Hollywood on Sunset. It sat on my desk for a week before I decided to try it out. Given what I saw when I logged in, I can see why LFP is on the downhill slide. Now, if ccbill would setup a cash based payment system then we might have something to talk about...
Also... dude... uuencoded? Please. That is so.... nineties. yEnc is where it's at.
1Your basic rights of privacy from government are spelled out in article four of the constitution.
2By not making purchases that are not private, you effectively demand the right of privacy.
3If consumers were adammant about privacy, specific trade laws would surely follow making your somewhat off point comment moot.
I've not really tried hard enough yet but thinking of BitPass, Google Adds (finally an add system which meets my required level of intrusivness), donations (some hope!) and some higher price downloadable content (a very small income stream).
I must agree with Scott BitPass does seem to have a good system.
Final point to ponder. Would I have bought Scott's comic if I wasn't actually interested in how BitPass could work for me? In a world of info overload would I pay some something which was not vital for me?
There are four sorts of people in the world: fools, lunatics, idiots and morons. - Umberto Eco, Foucaut's pendulum.
There is a big difference between micro value payments, and micro cost payments.
.sig
The inefficiency of all electronic payment system is huge.
Bitpass charges between 5 - 15%, and it's one of the best in terms of money taken out of the system.
-- this is not a
McCloud is right, and Shirky is right.
McCloud is right, people will pay the kind of sums he's talking about for the kind of content he's talking about. It's already happening. The caveat is that McCloud's talking about a certain type of content, that satisfies one of two conditions:
Shirky's right, because the majority of the Web doesn't satisfy either of those two conditions. If I'm looking for information on a particular aspect of HTML, or information on how to tie a particular necktie knot, then I'm unlikely to want any one particular source of that information enough to pay for it when it's available from another source without paying. The kind of stuff McCloud's pointing to as examples of why micropayments will work may be large in absolute numbers, but it's a small fraction of the entire Web and the vast majority of the Web is the kind of stuff Shirky's talking about.
There's also a third hurdle: whether or not I can pay. McCloud's site is a good example: I can't pay no matter how much I might like to, because I don't have an account with the only system he accepts. So I do have a big hurdle: I have to like his comic in particular enough to justify going and getting a BitPass account. Before micropayments become common one of two things will have to happen: either it'll have to reduce to only one or two systems so I don't have to keep opening new accounts all the time, or the sellers will have to accept enough systems that most of the time I'll already have an account with one they take. I'd note that this is a situation that came up with credit cards as well, and got solved by the world reducing to 2 big ones (Visa and MC) and 2 smaller ones (Amex and Discover) so that most people who have a card at all have one of them (even ATM cards now are either Visa or MC).
I was just trying to pretent I had not kept up with the times... ROTFL
Ceci n'est pas une signature
There is tons of semi-micropayment stuff going on in Japan. Mostly centered around amatuer manga, anime, games and pr0n.
d l_top.html
Warning: Japanese required
Warning: Adult content
http://www.dlsite.com
Click any of the images in the center. The number of paid copies sold is listed in the top right corner. About 5 to 10 new creations get added per day.
Here's some more sites doing the same thing
http://www.dejipare.com/
http://www.dlfun.net/
http://www.sofpla.co.jp/cs/
I've seen things like poems being sold for $3 up to 120meg video games for $20. Some things sell, some don't. There's at least one guy who sells large Flash sexually oriented flash based animations. He charges $20 per creation (about 12 scenes) and he's managed to sell 1500 to 2000 copies each. That's $30k to $40k per title. Not bad.
Of course I don't know if anyone would consider $20 a micropayment but I think the point is is that people are selling IP online and making it easy to put up for sale and easy to buy. http://www.dlsite.com even has a link to the creators webpage so you can go to his site and see his other works or samples and get an idea of you think his stuff might be worth your money. They also give the option to the creators to offer a sample/trial version for free. (free to the potential buyer. I don't know if it's free to the creator)
You may be interested in this audio (MP3 download or stream) interview with Russ Jones of Glenbrook Partners on the subject of Micropayments. http://www.itconversations.com/detail.php?id=33
FWIW,I bought and read Scott's .25 online comic. It was better than a lot of comics I've paid $3 for.
Yeah :'( i have a journal entry about it:
http://slashdot.org/~diesel_jackass/journal/45956
THERE IS NO DATA. THERE IS O
It's the same thing but YOU don't get it.