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BitPass: Micropayment That Seems To Work
Omega1045 writes "I have been following the story of BitPass for some time now. The micropayment solution provider has been featured on Slashdot before. That article focused on Scott McCloud, and his comic The Right Number. Since that story, BitPass has added a number of sites using their service. From this netizen, it looks like the idea is really taking off. Some news sources (NJ.com, SiliconValley.com) have noticed how this micropayment trend has progressed to include well known services like iTunes. I really like the idea of the artist getting a fair cut of the profits at BitPass."
If there is chasm of quality between paid content and free content (like national subventioned tv and cable tv where I live) then people will go for the highiest quality because they have the feeling they get something for their money (I take the tv example as it is what comes as near in mater of content as of web). But if somebody is Offering the same or equivalent conent at same or acceptably same quality then people will not go to pay for service. This is especially true if the free content is in a greater mass than paid content.
The tendence might invert itself. But it will take a lot of time. And I even think maybe never because they will always be a drove of talended people making something for free.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
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Since the moderators, instead of simply leaving some happy comments alone are nailing me, I will add something very much on-topic.
I think "home grown" service like BitPass are just the key for up and coming artists. Offering a service at such a small amount of money is very marketable. This is possible for the artist because the they gets such a large portion of that take. On an average CD, the artist makes much less than a dollar. That is a very small percentage @ $12 to $15 for a new cd!
Imagine a YOUNG Metallica level artist on their way up. Instead of using traditional means, they offer their LP at $2, on BitPass via MP3. They make much more per album than they would through traditional means. They don't have to sell near as many albums to be a huge financial success, and continue to make their music or whatever.
Sounds like success to me! I can think of a few local bands that I wish were still around, but simply could not afford it. A succesful BitPass style service could have really helped them!
Great ideas often receive violent opposition from mediocre minds. - Albert Einstein
Uh... no. 15% is very fair, as compared to $500/mo. account fees, $0.07/transaction, and 3.5% fees. Really, when you look at it, for a one-cent fee, paying $0.07 per transaction is f***ing insane, so I appriciate the reduced fees.
#define DRM chmod 000
Even if it doesn't succeed, it lays the ground work for ideas to spawn off that might lead to something better later on. On the net there is a culture of take what you want. Open source works well with this, but economics based on scarcity does not. Thus leading to piracy. If piracy is reduced it's still a step forward.
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I can't believe micro-payments will ever catch on. Will we all be teased with only first 2 sentences of an article, and then have to cough up $0.02 for the rest? $0.01 for the first 10 search results, and $0.01 for every 100 results after that? $0.01 to view the FAQ section of technicial support, $0.02 to search the FAQ for a keyword. Hell I could rack up a $50 tab in an hour of surfing.
The problem with comparing this to iTunes is that you're getting music out of it...not internet content, they are 2 very different things. The other problem is if we move to a "cable" way of paying things we get "content networks" like...say...IGN
For items priced $0.01-$5.00, the transaction fee is 15%.
For items priced $5.00 and higher, the transaction fee is 5% + $0.50.
15% is one helluva chunk to take for being the clearinghouse for micropayments, and the over $5 fee is roughly twice what you'd pay through a US commercial gateway.
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I don't think it's that people don't want to pay, they just don't want to pay for content they don't use. It's *subscriptions* that don't work, not payment in gereal. I'm happy to pay for an article I want to read, but that doesn't mean I want to have a permanent subscription of $x/month. Those can really add up.
Personally, I don't mind at all paying for stuff on an "a la carte" basis. But, just like regular shopping, I want to walk into the store, pick out the thing I want, and buy just that.
I'm betting that, as usual, the first industry to take advantage of a working, widespread micropayment system will be the porn industry.
Funny, I didn't seem to notice being able to pay with Bitpass on iTunes.
I'm seventeen. I wouldn't mind paying for stuff if its good, but there's always one thing I run into that I can't do anything about. I'm underaged, so I can't get a credit card. Internet payments would be its only use, so getting one to the family wouldn't be meaningful either. And when I become a poor student, no bank in their right mind will want to give me one either. Nor am I sure I want to even get one, with the trail it leaves behind.
Add to that that I'm not from the United States, and it all amounts to just too much trouble to go through for the possible benefits and warm-and-fuzzy-feeling. What I'd like to see are some sort of bitpass cards that anyone can buy from a store. Before that happens, micropayments won't work on that meaningfully. Internet users under eighteen aren't that far and inbetween, although I admit that most just play CS and no little else. :)
I recall when eSheep posted the new installment of Apocamon there was some small fee to access it tied to BitPass. The problem was that the cost to access the material was rather small, about $0.25 (a bit large for something I'll only have limited, temporary access to, but that's not the point here) however the user was required to make a minimum purchase of a $3 "virtual cash-card" from BitPass just to be able to spend that $0.25. Rather than functioning like PayPal where any amount can be sent and pulled back to your bank account BitPass requires you to toss in a set amount. Can't find someplace else to spend you $2.75? Well, looks like you just paid $3.00 (The current going rate for a comic book with 22 pages of story) for an online comic you have no physical access to and will lose the ability to read after 666 times or 30 days, whichever comes first.
The way that BitPass operates is thus the biggest problem here. As much as I chafe at having to purchase the latest installment (great, get me hooked on something free then wait forever to continue it and start charging) and the micropayments idea in general having my money locked up by one company is a problem. Even if there were multiple places accepting BitPass it would still be a bad idea unless they had a clear monopoly. Regardless of whether micropayments are good or bad, BitPass is a terrible implementation.
It doesn't fix the fact that most people don't want to pay for internet content in any way, shape or form.
People are totally willing to pay for internet content. See all these consumers who put down $40, $50, even $70 monthly for high-speed connections?
They wouldn't spend like that unless they desired internet content enough to give money for it. They only problem is that today they give this money to ISPs, not content-creators. Viewers are willing to pay for content; they're just not willing to buy content. If the cumbersome, distracting, and insecure process of paying for a website were removed, readers would have no problem forking over some cash. Removing those procedural obstacles is the quest of every micropayment project.
I'd be happy to give slashdot $0.02 per page I read, which would cover their bandwidth and then some. (Typical rate for one banner impression is much, much less than a penny. But few readers would hestitate to give $0.01 to read a good page. The time it'd take to transfer that money traditionally is more valuable than the cash itself)
PS. Part of the reason so many people feel guiltless about collecting MP3s off P2P is that they are paying for them already. File-sharing is an expensive hobby. They just pay Comcast and Dell instead of the RIAA.
you may have heard about the minitel, some sort of videotext terminal that iss distributed for free.. its nominal speed is 1200/75 bits/s, but you now have faster ways to access it. anyway it was sufficient for its semi-graphic interface.
the main use of the minitel was to connect to some "kiosk" and then type the name of the service you want to access. you don't have to subscribe, eventually you do not pay the services directly. you are billed by the operator (france telecom) according to the time you spent on the different service, and their respective rates (from free to something like 1.5 dollars per minute). the billing is made in the same invoice as the usual voice calls. the operator charges, collects the money, keeps some for himself, and give the remaining to the providers of the different services.
a lot of companies made a lot of money with this, with different kind of services: chats (some very sex-oriented), games, value-added professionnal databases..
minitel was launched in 1984, and it was very popular, years before most of us ever heard about internet:
http://www.ust.hk/~webiway/content/France/history. html
more than 6 million terminals were distributed as of 1994. more than a billion connections in 2002, not too bad for a 60 million ppl country and for a medium that is slowly fading away.
if you are curious you can even try it using your internet connection:
http://www.minitelfr.com/home/index.html
That was a funny PA -- quite clever, if you've read Reinventing Comics. However, I think Gabe & Tycho made real asses out of themselves in the accompanying commentary. They responded to McCloud's optimistic (if starry-eyed) willingness to imagine a bright future for cartooning and put out creative new ideas by basically, as he put it, kicking him in the teeth.
... Your responses were deft and had the weight of punishment, and I feel as though I have been taught a valuable lesson by a bloom of aluminum baseball bats. At the root of it, I misjudged the man. For his part, he says that he has not made himself as aware as he should of the way online comics are progressing - and the ways they are endeavoring to support themselves. ... My conversation with Scott was fascinating, and clarified many, many issues."
G&T are hilarious, but heavens, they do shoot their arrogant little mouths off sometimes. Micropayments may not work, and Scott McCloud may not be right about everything (or even anything), but (1) as a hard-working veteran artist who was drawing comics when the PA crew was in diapers, he deserved more respect than they gave him, (2) as a veteran embracing change, a creative mind trying to test out new, risky ideas, he deserved more respect than they gave him, and (3) as somebody who is -- hello! -- trying to figure how they can make a living from their craft, he deserved one heck of a lot more respect than they gave him.
They ended up eating a bit of crow over that comic -- mostly because McCloud himself responded by being persistently civil to them until they realized what a couple of assholes they were. But they did realize, and came back with the kind of civility their satire ought to have carrier from the beginning. Tycho: "Reader response to Friday's thingy was profoundly, powerfully negative (Which Scott even apologized for - can you believe that?)
They're not mutually exclusive, though. Any content seller can offer their content both via subscription and micropayments. Buying ala carte may be the step that eventually convinces a user to subscribe.
He who refuses to do arithmetic is doomed to talk nonsense.
yup I saw this on diesel sweeties. couldn't get it to work because of some browser/javascript issue. what crap.
.. an indicator on the browser needs to light up and say "this site accepts BrowserPay" (or whatever) and when the site says "please make a donation, pretty please" you think "yeah, I like this stuff" and you click the button, blam, it makes a (refundable) debit from your account and you're *done*. No need to authenticate in all the different sites and go through the hoops.
it would be so much easier just to use paypal. in fact when this takes off, paypal will eat them alive.
but the real problem is it takes too long to make a payment. it needs to be *part of the browser*
of course, the only way this will happen is if somebody has the balls and the marketshare to do it. I guess microsoft has to do it, and we know how much fun it is when microsoft does this stuff (privacy issues anyone?).
but basically stuff like bitpass is just for a small group of people who really want micropayments to work. outside of that group, good luck.
I believe the "public radio" model will work wonderfully for a lot of web sites...... but I'm not going to spend 5 minutes trying to get the site to load just to spend $0.10, and then do it all over again because the other sites use different systems.
It will certainly take time for the "internet = free" mentality to pass
Uh.. it's more of a "sunday comics aren't $.25" problem. When $1 buys you the entire paper, the comics on the back page are a bonus that you read after skimming the rest of the paper. The mindset is that you buy the paper, the comics come free. And paper comics are much better value - you get several strips. Nobody ever paid money for a single issue of a serial comic strip.
If you start charging - you need a lot of content. It almost makes me think that a colaborative pool would be the only way some of these sites (that don't have a *lot* of content) would work.
I've been using BitPass to sell a number of things:
1. My feature film, "Nothing So Strange."
2. Open-source clips from that film.
3. Songs from "Bat Boy: The Musical."
4. My play, "Fair & Balanced."
With regard to some questions and comments here about BitPass:
--Ease of use. I didn't install the gateway, but I do most of the listing and configuring the pages to work with BitPass myself. I'm not much of a techie at all (which is why my hands are trembling slightly as I post on Slashdot) and I found the process easy from the start. The previous poster is right that the gateway installation complexity puts BitPass selling out of the hands of those who can't control what their host does, but I know that BitPass has specific plans to make becoming a BitPass seller much easier.
--Refunds. Getting a refund is actually quite easy. In the first days, some people had trouble downloading "Nothing So Strange." All they had to do was register a complaint at BitPass.com, then we read their note and either solved the problem or issued a refund. Often, this whole process was completed within minutes. (And we've fixed the majority of downloading problems now.)
--Are people willing to pay? God, yes. We've been dying to make "Nothing So Strange" (a faux documentary about the assassination of Bill Gates) available to all of the people who write in and ask how they can see it. So far, it has only been at festivals, so if you didn't live where it played a festival it was impossible to see. The demand we knew was there did translate into sales. Now, with any luck, we can use the proceeds from the online venture to finance a DVD run and make it available that way, too. Additionally, the most popular "Bat Boy" song download is the one recording that is available nowhere else--an early version of a song that is currently on the album in stores. To "Bat Boy" fanatics, an exclusive like this is pretty special. I agree with the poster who said that people won't pay for stuff they can get for free elsewhere on the Web. The trick is to have stuff that isn't anywhere else. Nothing I've put up on the Web with BitPass is something I would have put up for free--the bandwidth costs alone would have made that impossible.
--PayPal competition. As far as I know, PayPal doesn't offer secure access to online content. That's the key advantage of BitPass.
--High buy-in. It's true that to buy something for 25 cents you need to spend at least $3 if you are not currently holding a BitPass card, and that is a disadvantage. But as more and more content gets up on the Web using BitPass, I think this will be less of an issue. And the items that are already priced at $3 or $5 (like, oh, say, my play or "Nothing So Strange") will help put a BitPass card in people's hands without their risking anything.
--BitPass fees. To paraphrase another poster, you can see it as a 15% fee or an 85% royalty. I have no problems with their terms. For what they do, it's worth it.