People will pick their ideal world second choice over their ideal world preference if the marginal costs exceed their marginal value.
While this is true as far as it goes, it's essentially a tautology, and it isn't an argument against micropayments.
I'm sure you realize the problem you describe isn't unique to micropayments. You can get generic macaroni & cheese for a few cents less than Kraft. And while some do, most feel that spending that extra few cents for a brand they have a relationship with is worth it. In other words, the brand adds value. It's not just macaroni & cheese, either; the phenomenon works all the way up to thousand dollar Gucci purses and beyond. Branding is arguably the most powerful economic force in the world, but in Shirky's analysis, it doesn't even exist.
Whether it's selling pasta, purses, or online content, the key to success is differentiating your product enough to make it a nonsubstitable good. Scott McCloud seems to have done that. Nearly 1400 people felt that he offered value they couldn't find at free sites, in direct contradiction of Shirky's theories. There's no reason to think that differentiation is any less possible on the Web than it is in the real world.
As for subscriptions: The model that makes sense for you will depend on what your goals are, what you're selling, and your ability to market your product. Free makes sense for some; micropayments/advertising/subscriptions makes sense for others. Micropayments are just another tool, and they can be used in concert with both free content and subscriptions. Micropayments add possibilities, they don't subtract them.
At any rate, I suspect micropayments are here to stay. They're neither panacea nor poison; just another tool that we'll see being used more and more often.
BitPass, the micropayment system Scott McCloud is using, works like a prepaid phone card. You buy a BitPass for as little as $3, and spend it on content you like until its gone. There's only one charge on your bank statement.
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.
The campaign manager, Joe Trippi, has the Slashdot ID #689074. Is it the the real Joe Trippi? Who knows, but he's posted before on Dean campaign issues, and I'm waiting to see if he posts again on this subject.
It helps terrorists by giving them information they may not already know. It also shows them where they've been successful in keeping their intentions hidden. In other words, it enables terrorists to improve their techniques of secrecy.
I haven't mentioned how it enables them to game the system by investing money in false leads or any of the other obvious flaws in this scheme. In other words, it undermines confidence in our intelligence.
You must be using some definition of "parity" that I am unaware of.
When the futures fluctuate dramatically due to the new 'interest,' the Pentagon won't be the only one who knows. This system essentially lets terrorists know the probability of success of a given terrorist action before they launch it. They can see which of their plans have leaks and which do not, and use that data to organize more effectively.
Exactly. Which is why this is such an idiotic idea. Markets are based on incentives. When you provide incentives (such as lower prices or higher wages), you get more of what you incentivize.
It's an interesting idea, and I imagine it might work well for translating between very similar languages, such as PHP to ASP. Broadly speaking, though, I can't see it translating efficiently between one arbitrary language and another. Coding techniques for individual languages are often so different that you may not be able to construct corresponding statements between them. Or rather, the statements you could construct might be so complex, nonintuitive and inefficient that the code wouldn't be worth using.
I think it's smarter to get any disputed IP out in the open so Linux and open source projects can implement new solutions, rather than waiting until one day when Microsoft, at its pleasure, attempts to drop a bomb that cripples the open source world.
And just because Microsoft has a patent on a particular process or idea doesn't mean that patent will stand when subjected to a rigorous public examination for prior art.
Again, if Microsoft has specific accusations to make, let them make them. Linux and open source projects will emerge stronger for it.
If there's "no question" that your IP is being used in open source software, tell us where. If you're not willing to put your money where your mouth is, the world should rightfully assume that your attacks are baseless and without merit.
I hope you continue on with this approach and name a specific distro or Open Source project so they can sue you for defamation.
If your CD is not in CD Baby already, our original $35 CD Baby set up still applies. That $35 is for the warehousing and work to have it on cdbaby.com. This $40 is for the additional work for years of digital distribution.
So if you're not already listed with CDBaby, it'll cost you $75 to get listed, not including the investment you had to make in printing your CD in the first place. And if Apple or the other services reject you, you're out $75.
Not that I'm trashing CDBaby or iTunes. It looks like they provide a fair service. But I wonder how necessary they are to successfully selling your music online.
This seems like great news, but artists won't get 91% of the 99 cents each track. They'll get 91% of whatever iTunes agrees to pay them per track, and we don't know what that is yet.
If Apple decides to give artists a quarter for every song sold (which is more than the 7 cents per track RIAA artists are currently receiving), you'll get 22 cents a track. Many artists might be better off selling their music for 50 cents a song using micropayments and encouraging fans to buy directly from them. More music gets sold to fans, and the artists receive more profit.
But there's definitely an advantage to being listed in iTunes or other major music services, and there's nothing that says you can't do both. It'll be interesting to see how this shakes out.
Nielsen's "Case For Micropayments" and Shirky's "Case Against Micropayments" both suffer, in my opinion, from a lack of perspective. They were so focused on the tiniest end of the micropayment phenomenon, they forgot that the majority of the value is found in the larger end -- in transactions between a dime and a dollar.
The line Nielsen is most famous for, "If a page is not worth a cent, then you should not download it in the first place," is, frankly, nuts. There's been a lot of good criticism leveled against this view, and rightly so. But this isn't my view of the micropayment future, and I don't think it's a view most micropayment advocates share anymore. Perhaps it's time for "The New Case For Micropayments"?
Payments of over a dollar have worked quite well on the web for a while, and payments of about $3 on up were working fine in several ways even before paypal.
But it's the payments under a dollar that I'm concerned about, because that's the range of value where most items of web content worth paying for are.
In talking about micropayments in this range, there are two issues involved -- one is implementation, and the other is profitability.
Let's take profitability first. Paypal charges a 30 cent fee + 2.2% of the transaction for every business transaction they make. Selling an online comic for 50 cents will net you only 19 cents profit. Selling an online comic for a quarter will cost you 31 cents. The gap between what it costs your users and what you make in profit has been large enough in the past to disincentivize micropayment content, and drive people to other business models. I think BitPass tightens that gap enough to make micropayment content finally make sense.
Second, I think BitPass has a nice implementation that is much more conducive to *using* micropayments than PayPal is. For instance, if you purchase Bitpass content, you can come back and view or download that content without being forced to repurchase it. Paypal doesn't offer this kind of service. There are other aspects of the BitPass implementation that I think are superior, too, but rather than commenting on all of them, I'll just say that implementation makes a difference, and sometimes it makes *all* the difference.
online payments for less than $.25 will never become wildly popular, or even marginally accepted.
Here's where we do disagree. I'd set the bar of unpopularity considerably lower than 25 cents. I think there's a vast amount of digital content out there that could be fairly valued at a quarter. Scott McCloud's online comic was a quarter, for instance, and I felt it was the right price.
And there may be special cases where even a cent is appropriate. Take McCloud's voting experiment, for example. He lets people vote for the title of the next cartoon he draws in his "Morning Improv" series by spending as little as a penny. One penny = one vote. By my rough count, he's made over 33 dollars so far on this little experiment, a small but not insubstantial amount.
Like I said, though, this is a special case. Scott can charge a penny per vote because of the relationship he's built with his readership. Corporations that try to charge a penny per page will find their users "breaking up" with them unceremoniously.
So yes, there are some successes, but I don't think anyone should say micropayments work everywhere just because the iTunes Music Store is making it work at $.99 a throw.
Nobody's saying micropayments work *everywhere*. They're just another payment option, one that can work with and even enhance previous payment options like subscriptions or advertising. Not sure if you want to subscribe to a given site? Paying for content ala carte might be the step that convinces you.
I think the momentum is becoming increasingly obvious -- micropayments are here to stay. I really do expect Shirky to back
Speculation, and I assert otherwise. Find a counter example.
Yup, it's speculation. It's too early to know yet how well some of the micropayment content sellers have done yet. We'll find out in a few weeks.
Sure, that $109.30 for U2 will really persuade them to go indie, and the $10 for Linkin Park shows just how much you wacky kids will pay for your college boy rawk.
Well, first, you're confusing donation systems with micropayment systems. Micropayments aren't about charity; they're about making a transaction.
Second, we do know that as of a couple weeks ago, at least one previously unknown musician has made over $100 selling his music online. Not bad, considering the small number of Bitpass users at this point. Feel free to disparage away, but it's proof that people will pay 50 cents for a song, even from an artist they don't know very well. And of course, iTunes Music Store has been successful doing the same thing, but with less of the money (about 7 cents a track) going to the artist.
Heh, how much have you paid?
I've paid a few bucks to BitPass, and bought a little music from Joshua Ellis, Scott McCloud's comic, and Jim Zubkavich's "Makeshift Miracle" comic, and I still have a buck and a quarter left. I've enjoyed my purchases, and I've enjoyed the feeling of supporting independent artists. I'm looking forward to more artists, bands, and writers coming on board.
Obviously, if the seller doesn't give you enough information to determine if something is valuable to you, or if that determination takes too much effort, you won't buy it. But that's true of everything, not just micropayments.
And transparency isn't the problem you think it is. Let's take online music, for example.
At Joshua Ellis' Love Songs for Bastards site, you can download a lo-fi preview of each song. If you like it, you can pay 50 cents for the hi-fidelity version. The FAQ tells you that that the tracks are 192 Kbps MP3s, which is about as transparent as you get. More transparent than many real world transactions.
On eBay, you don't always know what you're going to get either, but no one would argue that there's no demand for online auctions. Reputation capital systems have helped manage fraud, and that's one reason eBay works. Similar systems will come into place for micropayment content -- I'm working on one.
There's no problem inherent in selling with micropayments that isn't inherent in selling anything. The people who do it right will flourish; the people who do it wrong will perish. At any rate, it oughtta be interesting to watch.
Here's one of them: "Some instances define the term micropayment as low-value electronic financial transactions [23]. What the word 'low-value' actually means, usually depends rather heavily on the micropayment system in question. Generally, the value of an individual micropayment range as much as from a fraction of a cent to a few dollars."
Shirky's argument holds for transactions in the fraction of a cent range, but even for $0.25 transactions, it falls apart.
It is just not possible to get the associated per-transaction costs down low enough to make true micropayments work.
The BitPass model is essentially the prepaid phonecard model applied to online content. It's not rocket science. If you doubt that it works, go give it a try.
The big problem with Shirky's analysis is that he makes no distinction between payments of, say, half a cent, and payments of a dollar or more. And that's a major flaw in his argument.
In the real world, Shirky's argument translates to: "No one will buy a candy bar for 50 cents because they will be paralyzed by the user overhead." And, of course, we know this wrong. The candy industry (just to give an example) makes millions of dollars of profit a year selling 50 cent candy bars.
Likewise, there is a legitimate zone of value for digital content that falls between a dime and a couple bucks. 50 cents for an online comic you like, or for a song from a band you want to support, isn't any different than 50 cents for a candy bar.
Micropayments are just payments. And I think it'll be funny if, in a couple years, the artists and writers and bands who are making money off of micropayments can read Clay's article and have a good laugh.
I remember this same sort of thinking when HotWired introduced the first banner ad. And yet, without banner ads, Slashdot probably wouldn't even exist. The question in my mind is: What great sites don't exist now, that could exist by using micropayments?
The net as a culture dealt with advertising, and we'll deal with micropayments, too. The sites that try to nickel-and-dime you to death will die the same death as the sites that spam you with endless pop-up windows, blinking banner ads, or shoshkeles. The equation is simple -- moneygrub your users too often and they'll flee in droves. Micropayment sellers will learn the lessons of the market, the same as anyone else.
Most micropayment companies have failed in the past for two reasons:
1) They debuted at the height of the dotcom craze, when advertising money, venture capital, and ludicrous business plans were everywhere. Back then, users were getting so much of their online experience subsidized by these factors that micropayments weren't attractive to them. Now, in the depressed post-boom environment, micropayments are becoming attractive to consumers again.
2) Most micropayment companies focused on the wrong markets. Micropayment companies have traditionally focused on large content providers, trying to get already successful businesses to change their business model to something their consumers were skeptical or even resentful of. BitPass, however, has instead focused on a bottom-up approach, marketing to individual content producers like webcomics creators, artists, and musicians, who haven't been able to charge what their work was worth until now. I think this is going to be the deciding factor in their success.
I'm working on a BitPass user group site to help the BitPass community grow. If you're curious, I'll post to my journal when the site is up.
In the year 2000, we hooked our 150 watt transmitter up to the Internet and hung a banner over a Mpls/St. Paul I-94 overpass with our website spray painted on it.
Visitors to the website could upload any MP3 off their hard drive to the station and it would be automatically queued up for broadcast. We also set up a voicemail line for those who didn't have computers -- any voicemail left there would be automaticaly queued up for broadcast as well.
It was great radio for the 2 weeks straight that it lasted. The best I've ever heard. We got several hundred uploads and voicemails on the air. When we ran the same station promos too much people began making their own and uploading them. It was wild.
When the FCC agents found our transmitter, we had to go on hiatus. We've worked on improving the software we use, and we may do it again someday. I think a model like this -- with some substantial tweaking -- could make microradio stations the most fascinating audio in town.
Check out Paypal's Fees for Recieving Payments for Businesses. You pay 2.9% plus a 30 cent transaction fee. Meaning that selling a 25 cent webcomic will cost you about 31 cents. Paypal is good for a lot of things, but it's not a micropayment service.
(As a side note, if you need another reason to support BitPass, they're powered entirely by open source software. I like that.)
PayPal has 10 Million members that you can send your money too, while BitPass currently only has three.
Well, Paypal once had only 3 members, too.
But you've got a point. It doesn't matter how sweet the implementation of a micropayment service is if there aren't many people using it. So I'm building a BitPass User Group website to facilitate adoption of it. Interested parties can check out my journal for details.
Some people treat the subject of micropayments like they're telling ghost stories around a campfire:
"I heard the Micropayment Monster's gonna start charging us for ev'ry page we look at on th' web!"
"Well, I heard that this one guy surfed the web one night, an' the Monster sent him a credit card bill for a million dollars!"
"Oh yeah, well, this kid's mom that I know, she totally freaked out cuz of micropayments everywhere, and threw her computer out the window and committed suicide!"
Settle down, kids. There's no monster. Micropayments are good, and the BitPass model really seems poised for success. It took me only a few seconds to sign up for it last night, and a couple clicks later I was reading Scott's comic -- the most enjoyable 25 cents I've spent in a long time.
First, the idea that every website is going to start charging people per page is asinine. The sites that try to nickel and dime you to death will end up in the same graveyard as the sites that try to advertise you to death. Don't you already mentally blacklist websites doused in crazy blinking Flash ads or shoshkeles? Most of us will just add the nickel-and-diming sites to the same pile. And advertising will always make more sense than micropayments for large, brand-oriented sites like CNN.com.
Second, the BitPass model isn't going to spring any sudden credit card surprises on anyone. It's essentially the prepaid phonecard model applied to online content. You buy a BitPass card for as little as $3, spend it in nickels, dimes and quarters on your favorite webcomic, band or online beggar, and you're done. Buy another card if you want, or don't. It's pretty simple.
Third, I've often heard people saying things like "I think an entire cent is too much" for online content and "it better be DAMN well WORTH it!"
Let's get some perspective. Name anything that provides more than 15 seconds worth of enjoyment for a dime. Give it a shot. Even a quarter. What can you buy for a quarter? Anything? You probably couldn't get a hobo to kick you in the nuts for a quarter. Whining about the epic, tragic loss of a dime? That's comical. Griping that even an entire cent is too much to support the artists you like? That's insulting.
Scott's comic is a good example of the value of micropayments. It's worth a quarter; it's not worth $7. There are all kinds of creators out there who are excited about micropayments because they know subscription or donation-based models don't work for them. There are worthwhile websites that aren't ad friendly that are creaking under the strain of overwhelming bandwidth bills. Micropayments enable them to survive and flourish.
Tycho's quote that "if you have enough readers who care about your work to go through all that rigamaroll, you could succeed with any business model" just isn't true. If you have 10,000 readers who are willing to spend 25 cents a month on you, then the only way you're going to get that money is through micropayments. Period. With micropayments, you're a creative indie superstar making a living; without them, you're just another schlub barely keeping his website afloat.
If BitPass succeeds -- and with the engine of webcomics behind them, I think they actually might -- it will change the web. Not in the drastic, market-mad campfire story ways, but in the amount of enjoyment and information we'll be able to squeeze out of the web. There will be more websites worth going to, more musicians being rewarded, more webcomics worth reading, more webloggers not just blogging but reporting.
For that kind of money, why isn't the Army creating their OWN Linux distro? They could've started with the NSA's security-enhanced Linux and customized it from there. A half-billion dollars ought to be enough to build an operating system that would make OS X look like DOS. (Actually, I imagine it would cost much less to create their own distro -- perhaps only 10% of the Microsoft deal.)
What's more, the Army would have total access to the code, they could make changes as needed, and they'd never have to spend another dime on OS licenses.
I can't see any way that this deal makes sense. What a waste. Until I hear better, I'm considering this theft by cronyism.
It's obvious that Linux is going to surpass OS X in the long term. But this isn't going to hurt Apple a bit.
Apple is a luxury computing brand. They're not competing for marketshare. Their goal is to ensure that a Mac is the computer you choose once you've got enough money to abandon your cheap Windows/Linux box and are ready to move to a more integrated, customized user experience.
Unless Palladium catches on with consumers, Windows' days as a dominant OS are numbered. Soon Linux will approach Windows for ease-of-use, and then it will pass OS X in terms of raw marketshare. But both Unices will exist comfortably together, Linux in the cheap $238 Wal-Mart computer market, Apple in the high end.
In the years afterward, Linux will continue eating away at Microsoft's marketshare. And what will Microsoft do about it? They won't be able to compete on price, so they'll have to compete on features. Palladium and DRM seems to be the major ways Microsoft has chosen to develop their OS, but I think this will prove to be a dead end. I believe consumers will ultimately reject computers that don't do what they want them to do. Microsoft will see its marketshare dwindle until Linux becomes the dominant OS and Microsoft just another player in the industry.
And when Linux becomes the dominant OS? It will still never have the hardware integration to be able to offer the rich user experience that Apple does. Apple will continue developing new products, new software, and new ideas, secure in its niche as a luxury computing brand for the forseeable future.
Slashdot Mirror
People will pick their ideal world second choice over their ideal world preference if the marginal costs exceed their marginal value.
While this is true as far as it goes, it's essentially a tautology, and it isn't an argument against micropayments.
I'm sure you realize the problem you describe isn't unique to micropayments. You can get generic macaroni & cheese for a few cents less than Kraft. And while some do, most feel that spending that extra few cents for a brand they have a relationship with is worth it. In other words, the brand adds value. It's not just macaroni & cheese, either; the phenomenon works all the way up to thousand dollar Gucci purses and beyond. Branding is arguably the most powerful economic force in the world, but in Shirky's analysis, it doesn't even exist.
Whether it's selling pasta, purses, or online content, the key to success is differentiating your product enough to make it a nonsubstitable good. Scott McCloud seems to have done that. Nearly 1400 people felt that he offered value they couldn't find at free sites, in direct contradiction of Shirky's theories. There's no reason to think that differentiation is any less possible on the Web than it is in the real world.
As for subscriptions: The model that makes sense for you will depend on what your goals are, what you're selling, and your ability to market your product. Free makes sense for some; micropayments/advertising/subscriptions makes sense for others. Micropayments are just another tool, and they can be used in concert with both free content and subscriptions. Micropayments add possibilities, they don't subtract them.
At any rate, I suspect micropayments are here to stay. They're neither panacea nor poison; just another tool that we'll see being used more and more often.
Mod this Funny if you want, but not Insightful.
BitPass, the micropayment system Scott McCloud is using, works like a prepaid phone card. You buy a BitPass for as little as $3, and spend it on content you like until its gone. There's only one charge on your bank statement.
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.
The campaign manager, Joe Trippi, has the Slashdot ID #689074. Is it the the real Joe Trippi? Who knows, but he's posted before on Dean campaign issues, and I'm waiting to see if he posts again on this subject.
How does this bring us to parity?
It helps terrorists by giving them information they may not already know. It also shows them where they've been successful in keeping their intentions hidden. In other words, it enables terrorists to improve their techniques of secrecy.
I haven't mentioned how it enables them to game the system by investing money in false leads or any of the other obvious flaws in this scheme. In other words, it undermines confidence in our intelligence.
You must be using some definition of "parity" that I am unaware of.
When the futures fluctuate dramatically due to the new 'interest,' the Pentagon won't be the only one who knows. This system essentially lets terrorists know the probability of success of a given terrorist action before they launch it. They can see which of their plans have leaks and which do not, and use that data to organize more effectively.
This is an idea which Has Not Been Thought Out.
Remember, greed makes people do stupid things.
Exactly. Which is why this is such an idiotic idea. Markets are based on incentives. When you provide incentives (such as lower prices or higher wages), you get more of what you incentivize.
What does THIS market incentivize?
Think about it.
It's an interesting idea, and I imagine it might work well for translating between very similar languages, such as PHP to ASP. Broadly speaking, though, I can't see it translating efficiently between one arbitrary language and another. Coding techniques for individual languages are often so different that you may not be able to construct corresponding statements between them. Or rather, the statements you could construct might be so complex, nonintuitive and inefficient that the code wouldn't be worth using.
It would be an interesting challenge, though.
I think it's smarter to get any disputed IP out in the open so Linux and open source projects can implement new solutions, rather than waiting until one day when Microsoft, at its pleasure, attempts to drop a bomb that cripples the open source world.
And just because Microsoft has a patent on a particular process or idea doesn't mean that patent will stand when subjected to a rigorous public examination for prior art.
Again, if Microsoft has specific accusations to make, let them make them. Linux and open source projects will emerge stronger for it.
If there's "no question" that your IP is being used in open source software, tell us where. If you're not willing to put your money where your mouth is, the world should rightfully assume that your attacks are baseless and without merit.
I hope you continue on with this approach and name a specific distro or Open Source project so they can sue you for defamation.
Plus there's this, from the CDBaby Digital Distribution "How The Money Works" page: So if you're not already listed with CDBaby, it'll cost you $75 to get listed, not including the investment you had to make in printing your CD in the first place. And if Apple or the other services reject you, you're out $75.
Not that I'm trashing CDBaby or iTunes. It looks like they provide a fair service. But I wonder how necessary they are to successfully selling your music online.
This seems like great news, but artists won't get 91% of the 99 cents each track. They'll get 91% of whatever iTunes agrees to pay them per track, and we don't know what that is yet.
If Apple decides to give artists a quarter for every song sold (which is more than the 7 cents per track RIAA artists are currently receiving), you'll get 22 cents a track. Many artists might be better off selling their music for 50 cents a song using micropayments and encouraging fans to buy directly from them. More music gets sold to fans, and the artists receive more profit.
But there's definitely an advantage to being listed in iTunes or other major music services, and there's nothing that says you can't do both. It'll be interesting to see how this shakes out.
I don't think we disagree all that much.
Nielsen's "Case For Micropayments" and Shirky's "Case Against Micropayments" both suffer, in my opinion, from a lack of perspective. They were so focused on the tiniest end of the micropayment phenomenon, they forgot that the majority of the value is found in the larger end -- in transactions between a dime and a dollar.
The line Nielsen is most famous for, "If a page is not worth a cent, then you should not download it in the first place," is, frankly, nuts. There's been a lot of good criticism leveled against this view, and rightly so. But this isn't my view of the micropayment future, and I don't think it's a view most micropayment advocates share anymore. Perhaps it's time for "The New Case For Micropayments"?
Payments of over a dollar have worked quite well on the web for a while, and payments of about $3 on up were working fine in several ways even before paypal.
But it's the payments under a dollar that I'm concerned about, because that's the range of value where most items of web content worth paying for are.
In talking about micropayments in this range, there are two issues involved -- one is implementation, and the other is profitability.
Let's take profitability first. Paypal charges a 30 cent fee + 2.2% of the transaction for every business transaction they make. Selling an online comic for 50 cents will net you only 19 cents profit. Selling an online comic for a quarter will cost you 31 cents. The gap between what it costs your users and what you make in profit has been large enough in the past to disincentivize micropayment content, and drive people to other business models. I think BitPass tightens that gap enough to make micropayment content finally make sense.
Second, I think BitPass has a nice implementation that is much more conducive to *using* micropayments than PayPal is. For instance, if you purchase Bitpass content, you can come back and view or download that content without being forced to repurchase it. Paypal doesn't offer this kind of service. There are other aspects of the BitPass implementation that I think are superior, too, but rather than commenting on all of them, I'll just say that implementation makes a difference, and sometimes it makes *all* the difference.
online payments for less than $.25 will never become wildly popular, or even marginally accepted.
Here's where we do disagree. I'd set the bar of unpopularity considerably lower than 25 cents. I think there's a vast amount of digital content out there that could be fairly valued at a quarter. Scott McCloud's online comic was a quarter, for instance, and I felt it was the right price.
And there may be special cases where even a cent is appropriate. Take McCloud's voting experiment, for example. He lets people vote for the title of the next cartoon he draws in his "Morning Improv" series by spending as little as a penny. One penny = one vote. By my rough count, he's made over 33 dollars so far on this little experiment, a small but not insubstantial amount.
Like I said, though, this is a special case. Scott can charge a penny per vote because of the relationship he's built with his readership. Corporations that try to charge a penny per page will find their users "breaking up" with them unceremoniously.
So yes, there are some successes, but I don't think anyone should say micropayments work everywhere just because the iTunes Music Store is making it work at $.99 a throw.
Nobody's saying micropayments work *everywhere*. They're just another payment option, one that can work with and even enhance previous payment options like subscriptions or advertising. Not sure if you want to subscribe to a given site? Paying for content ala carte might be the step that convinces you.
I think the momentum is becoming increasingly obvious -- micropayments are here to stay. I really do expect Shirky to back
Speculation, and I assert otherwise. Find a counter example.
Yup, it's speculation. It's too early to know yet how well some of the micropayment content sellers have done yet. We'll find out in a few weeks.
Sure, that $109.30 for U2 will really persuade them to go indie, and the $10 for Linkin Park shows just how much you wacky kids will pay for your college boy rawk.
Well, first, you're confusing donation systems with micropayment systems. Micropayments aren't about charity; they're about making a transaction.
Second, we do know that as of a couple weeks ago, at least one previously unknown musician has made over $100 selling his music online. Not bad, considering the small number of Bitpass users at this point. Feel free to disparage away, but it's proof that people will pay 50 cents for a song, even from an artist they don't know very well. And of course, iTunes Music Store has been successful doing the same thing, but with less of the money (about 7 cents a track) going to the artist.
Heh, how much have you paid?
I've paid a few bucks to BitPass, and bought a little music from Joshua Ellis, Scott McCloud's comic, and Jim Zubkavich's "Makeshift Miracle" comic, and I still have a buck and a quarter left. I've enjoyed my purchases, and I've enjoyed the feeling of supporting independent artists. I'm looking forward to more artists, bands, and writers coming on board.
Obviously, if the seller doesn't give you enough information to determine if something is valuable to you, or if that determination takes too much effort, you won't buy it. But that's true of everything, not just micropayments.
And transparency isn't the problem you think it is. Let's take online music, for example.
At Joshua Ellis' Love Songs for Bastards site, you can download a lo-fi preview of each song. If you like it, you can pay 50 cents for the hi-fidelity version. The FAQ tells you that that the tracks are 192 Kbps MP3s, which is about as transparent as you get. More transparent than many real world transactions.
On eBay, you don't always know what you're going to get either, but no one would argue that there's no demand for online auctions. Reputation capital systems have helped manage fraud, and that's one reason eBay works. Similar systems will come into place for micropayment content -- I'm working on one.
There's no problem inherent in selling with micropayments that isn't inherent in selling anything. The people who do it right will flourish; the people who do it wrong will perish. At any rate, it oughtta be interesting to watch.
The people that want a specific candy bar will pay for it if it means they can't get that candy bar otherwise.
Just because something's free doesn't mean you want it, as plenty of ugly couches left on the curbside with "FREE!" signs on them can attest.
Obviously, some people won't pay for anything. But many will, especially to support the artists they like.
Did you follow the links in Shirky's essay?
Here's one of them: "Some instances define the term micropayment as low-value electronic financial transactions [23]. What the word 'low-value' actually means, usually depends rather heavily on the micropayment system in question. Generally, the value of an individual micropayment range as much as from a fraction of a cent to a few dollars."
Shirky's argument holds for transactions in the fraction of a cent range, but even for $0.25 transactions, it falls apart.
It is just not possible to get the associated per-transaction costs down low enough to make true micropayments work.
The BitPass model is essentially the prepaid phonecard model applied to online content. It's not rocket science. If you doubt that it works, go give it a try.
The big problem with Shirky's analysis is that he makes no distinction between payments of, say, half a cent, and payments of a dollar or more. And that's a major flaw in his argument.
In the real world, Shirky's argument translates to: "No one will buy a candy bar for 50 cents because they will be paralyzed by the user overhead." And, of course, we know this wrong. The candy industry (just to give an example) makes millions of dollars of profit a year selling 50 cent candy bars.
Likewise, there is a legitimate zone of value for digital content that falls between a dime and a couple bucks. 50 cents for an online comic you like, or for a song from a band you want to support, isn't any different than 50 cents for a candy bar.
Micropayments are just payments. And I think it'll be funny if, in a couple years, the artists and writers and bands who are making money off of micropayments can read Clay's article and have a good laugh.
I remember this same sort of thinking when HotWired introduced the first banner ad. And yet, without banner ads, Slashdot probably wouldn't even exist. The question in my mind is: What great sites don't exist now, that could exist by using micropayments?
The net as a culture dealt with advertising, and we'll deal with micropayments, too. The sites that try to nickel-and-dime you to death will die the same death as the sites that spam you with endless pop-up windows, blinking banner ads, or shoshkeles. The equation is simple -- moneygrub your users too often and they'll flee in droves. Micropayment sellers will learn the lessons of the market, the same as anyone else.
Most micropayment companies have failed in the past for two reasons:
1) They debuted at the height of the dotcom craze, when advertising money, venture capital, and ludicrous business plans were everywhere. Back then, users were getting so much of their online experience subsidized by these factors that micropayments weren't attractive to them. Now, in the depressed post-boom environment, micropayments are becoming attractive to consumers again.
2) Most micropayment companies focused on the wrong markets. Micropayment companies have traditionally focused on large content providers, trying to get already successful businesses to change their business model to something their consumers were skeptical or even resentful of. BitPass, however, has instead focused on a bottom-up approach, marketing to individual content producers like webcomics creators, artists, and musicians, who haven't been able to charge what their work was worth until now. I think this is going to be the deciding factor in their success.
I'm working on a BitPass user group site to help the BitPass community grow. If you're curious, I'll post to my journal when the site is up.
I can tell you what worked for us.
In the year 2000, we hooked our 150 watt transmitter up to the Internet and hung a banner over a Mpls/St. Paul I-94 overpass with our website spray painted on it.
Visitors to the website could upload any MP3 off their hard drive to the station and it would be automatically queued up for broadcast. We also set up a voicemail line for those who didn't have computers -- any voicemail left there would be automaticaly queued up for broadcast as well.
It was great radio for the 2 weeks straight that it lasted. The best I've ever heard. We got several hundred uploads and voicemails on the air. When we ran the same station promos too much people began making their own and uploading them. It was wild.
When the FCC agents found our transmitter, we had to go on hiatus. We've worked on improving the software we use, and we may do it again someday. I think a model like this -- with some substantial tweaking -- could make microradio stations the most fascinating audio in town.
Check out Paypal's Fees for Recieving Payments for Businesses. You pay 2.9% plus a 30 cent transaction fee. Meaning that selling a 25 cent webcomic will cost you about 31 cents. Paypal is good for a lot of things, but it's not a micropayment service.
(As a side note, if you need another reason to support BitPass, they're powered entirely by open source software. I like that.)
PayPal has 10 Million members that you can send your money too, while BitPass currently only has three.
Well, Paypal once had only 3 members, too.
But you've got a point. It doesn't matter how sweet the implementation of a micropayment service is if there aren't many people using it. So I'm building a BitPass User Group website to facilitate adoption of it. Interested parties can check out my journal for details.
First, the idea that every website is going to start charging people per page is asinine. The sites that try to nickel and dime you to death will end up in the same graveyard as the sites that try to advertise you to death. Don't you already mentally blacklist websites doused in crazy blinking Flash ads or shoshkeles? Most of us will just add the nickel-and-diming sites to the same pile. And advertising will always make more sense than micropayments for large, brand-oriented sites like CNN.com.
Second, the BitPass model isn't going to spring any sudden credit card surprises on anyone. It's essentially the prepaid phonecard model applied to online content. You buy a BitPass card for as little as $3, spend it in nickels, dimes and quarters on your favorite webcomic, band or online beggar, and you're done. Buy another card if you want, or don't. It's pretty simple.
Third, I've often heard people saying things like "I think an entire cent is too much" for online content and "it better be DAMN well WORTH it!"
Let's get some perspective. Name anything that provides more than 15 seconds worth of enjoyment for a dime. Give it a shot. Even a quarter. What can you buy for a quarter? Anything? You probably couldn't get a hobo to kick you in the nuts for a quarter. Whining about the epic, tragic loss of a dime? That's comical. Griping that even an entire cent is too much to support the artists you like? That's insulting.
Scott's comic is a good example of the value of micropayments. It's worth a quarter; it's not worth $7. There are all kinds of creators out there who are excited about micropayments because they know subscription or donation-based models don't work for them. There are worthwhile websites that aren't ad friendly that are creaking under the strain of overwhelming bandwidth bills. Micropayments enable them to survive and flourish.
Tycho's quote that "if you have enough readers who care about your work to go through all that rigamaroll, you could succeed with any business model" just isn't true. If you have 10,000 readers who are willing to spend 25 cents a month on you, then the only way you're going to get that money is through micropayments. Period. With micropayments, you're a creative indie superstar making a living; without them, you're just another schlub barely keeping his website afloat.
If BitPass succeeds -- and with the engine of webcomics behind them, I think they actually might -- it will change the web. Not in the drastic, market-mad campfire story ways, but in the amount of enjoyment and information we'll be able to squeeze out of the web. There will be more websites worth going to, more musicians being rewarded, more webcomics worth reading, more webloggers not just blogging but reporting.
I'd say that's worth a quarter.
For that kind of money, why isn't the Army creating their OWN Linux distro? They could've started with the NSA's security-enhanced Linux and customized it from there. A half-billion dollars ought to be enough to build an operating system that would make OS X look like DOS. (Actually, I imagine it would cost much less to create their own distro -- perhaps only 10% of the Microsoft deal.)
What's more, the Army would have total access to the code, they could make changes as needed, and they'd never have to spend another dime on OS licenses.
I can't see any way that this deal makes sense. What a waste. Until I hear better, I'm considering this theft by cronyism.
It's obvious that Linux is going to surpass OS X in the long term. But this isn't going to hurt Apple a bit.
Apple is a luxury computing brand. They're not competing for marketshare. Their goal is to ensure that a Mac is the computer you choose once you've got enough money to abandon your cheap Windows/Linux box and are ready to move to a more integrated, customized user experience.
Unless Palladium catches on with consumers, Windows' days as a dominant OS are numbered. Soon Linux will approach Windows for ease-of-use, and then it will pass OS X in terms of raw marketshare. But both Unices will exist comfortably together, Linux in the cheap $238 Wal-Mart computer market, Apple in the high end.
In the years afterward, Linux will continue eating away at Microsoft's marketshare. And what will Microsoft do about it? They won't be able to compete on price, so they'll have to compete on features. Palladium and DRM seems to be the major ways Microsoft has chosen to develop their OS, but I think this will prove to be a dead end. I believe consumers will ultimately reject computers that don't do what they want them to do. Microsoft will see its marketshare dwindle until Linux becomes the dominant OS and Microsoft just another player in the industry.
And when Linux becomes the dominant OS? It will still never have the hardware integration to be able to offer the rich user experience that Apple does. Apple will continue developing new products, new software, and new ideas, secure in its niche as a luxury computing brand for the forseeable future.