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Fame, Fortune and Micropayments

michael posted more than 11 years ago | from the please-deposit-5-cents-for-the-next-two-pages dept.

The Media 177

adharma writes "Clay Shirky is at it again. Addressed previously, his new article discussess the failures of Micropayments and the joys of free content."

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fp (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#6953630)

fp for my nigger stef

first post? (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#6953636)

first post.

YOU DID IT! (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#6953655)

CONGRATULATIONS!

You failed to get first post.

YOU DID IT!

Free, or I'll do Without! (4, Funny)

Schezar (249629) | more than 11 years ago | (#6953638)

Honestly, I can live without most things. Sure, I listen to music, and I watch DVDs, and I play video games, but only while they're free. (I mooch from my friends) Were these friends to suddenly become unavailable, I would do without.

Same goes for web content. I enjoy slashdot, but I'd give it up in a second before I'd spend one red cent.

Re:Free, or I'll do Without! (2, Funny)

bbtom (581232) | more than 11 years ago | (#6953643)

"one red cent"

What are you? Some kind of Red? Go back to Russia or neo-Russia (Canada), you filthy hippie.

Re:Free, or I'll do Without! (3, Funny)

Aero Leviathan (698882) | more than 11 years ago | (#6953664)

In Soviet Russia, web content pays for YOU! ...hey, wait... that's not such a bad idea...

What about food, clothing and shelter? (0)

Anonymous Coward | more than 11 years ago | (#6953688)

Do without? Or become a hypocrite?

Re:Free, or I'll do Without! (1)

fm6 (162816) | more than 11 years ago | (#6953699)

So because web content sucks, you shouldn't have to pay for it? Ever ask yourself why it sucks? Because the only way to pay for "free" content is to sell advertising, and there's only so much ad

Re:Free, or I'll do Without! (0)

Anonymous Coward | more than 11 years ago | (#6953806)

Ever ask yourself why it sucks?

Because web developers are all reading slashdot instead of improving their web pages? Do I win the prize for guessing correctly?

Re:Free, or I'll do Without! (4, Funny)

LostCluster (625375) | more than 11 years ago | (#6953701)

Whose wi-fi bandwidth are you mooching to read /.?

Getting what you pay for (3, Insightful)

fm6 (162816) | more than 11 years ago | (#6953773)

So because web content sucks, you shouldn't have to pay for it? Ever ask yourself why it sucks? Because the only way to pay for "free" content is to sell advertising, and there's only so much money to be made that way. If there were another way to pay for quality web content, you'd see a lot more of it.

An observant person (don't seem to be a lot around here) will have noticed that one of the few pay-for-access web sites that actually have customers is the one owned by the Wall Street Journal. Not a coincidence that it caters to people who have deep pockets -- or like to pretend that they do. Clearly the bucks are there if you have something people want at a price they can afford.

These "micropayments don't work" rants all fall down because they ignore a fairly conspicuous fact: micropayments not only work, but have been in use for a very long time. Do you have to buy a subscription to read a newspaper? No, you drop a quarter in the machine and you take one. (Or a buck for the WSJ.)

But wait! That's different! You don't get to pick out individual articles and just pay for those. But that's a technical issue. It isn't practical to build a machine that would do that. The smallest unit that is practical is an entire newspaper.

Somehow, nobody's managed to carry this idea over to the web. Perhaps this is technical and economic too: payment systems are too hard to implement, computers you can read in bed are still a marginal item, etc. But I suspect there's also a conflict with established interests. (Doesn't it bother anybody that not a single online newspaper has experimented with micropayments, even though they're all desperate for revenue?) Owners of "intellectual property" are very nervous about distributing it in electronic form. (Hence ebooks that cost more to buy than hard copy books.) And existing financial institutions can't be infatuated with payment systems that would compete with their lucrative credit card businesses.

Re:Getting what you pay for (4, Interesting)

Pharmboy (216950) | more than 11 years ago | (#6954220)

An observant person (don't seem to be a lot around here) will have noticed that one of the few pay-for-access web sites that actually have customers is the one owned by the Wall Street Journal.

Rush Limbaugh's 24/7 program is similar in that you pay around $45 a year ($75 for two years) for both the monthly newsletter and premium web access combined. $10 less for no newsletter.

Been a member for 2 years now, and I find it's worth it, even tho I only hit it 2 or 3 times a month. Also give access to higher bandwidth audio stream of the live show, which is nice in a steel building with no reception. Plus tons of good links, video feeds, access to tons of audio and video links, and archived shows. When you listen to the archives, there are NO commercials, and when you listen live online, you get bumper music instead of commercials when you are a paying member.

My opinion is that the Rush program works because it is not "all things for all people" but rather a very focused delivery system for specific content, conservative politics.

Not everyone is into it, but they have a ton of members and provide exceptional content for those who like it. If you like the Rush show (I do) it provides very nice access with no commercials. It is a pretty good model for others.

ISP's should pay for content. (1)

Martin Marvinski (581860) | more than 11 years ago | (#6953776)

ISPs should pay for content, and then the ISP member could choose what they wanted to view. For example, if you subscribed to earthlink, earthlink would let their members choose 40 different sites they could view out of a huge selection. This would solve the micro-pay problem because I rarely visit new sites. I just have a certain number I make the rounds in. That way content providers get paid via the ISP, and members get to pick 40 or so sites ala carte.

Behold! The Tragedy of the Commons! (2, Insightful)

Anonymous Coward | more than 11 years ago | (#6953778)

You get points for candor, but yours are the words of a parasite. Forget micropayments and websites - focus instead on these poor "friends" of yours. "Prey" would be more accurate. Just what exactly do you do for them, give them all blowjobs?

And please, you would never willingly "do without". If your "friends" became "suddenly unavailable" - an experience that I'm sure you're quite familiar with - you would immediately go looking for other "friends" to take their place in providing you as much as you can take.

Honestly, whatever became of the idea of contributing? Of carrying your share of the load? Are there really so many people all the way down the producer-consumer axis - so far that you can't even see the relationship between the two?

Re:Behold! The Tragedy of the Commons! (1)

Schezar (249629) | more than 11 years ago | (#6953965)

I moderately enjoy DVDs, video games, and the web. They are not, however, integral to my life and/or well-being. My friends enjoy them more than I, to the point that they feel it worthwhile to pay for these things. I have better things on which to spend my money.

Wine. Books. Good food. I buy and share them. Most everything else I can do without ;^)

Free Rider Problem (4, Insightful)

David Hume (200499) | more than 11 years ago | (#6953846)


Free, or I'll do Without!

Honestly, I can live without most things. Sure, I listen to music, and I watch DVDs, and I play video games, but only while they're free. (I mooch from my friends) Were these friends to suddenly become unavailable, I would do without.

Same goes for web content. I enjoy slashdot, but I'd give it up in a second before I'd spend one red cent.


If with respect to DVDs, CDs and video games everyone adopted your attitude, you would have to do without them because they would not be available.

This is the classic free rider problem [stanford.edu] (see also Wikipedia [wikipedia.org] ).

Re:Free, or I'll do Without! (2, Funny)

bobthemuse (574400) | more than 11 years ago | (#6954145)

Sure, I listen to music...but only while they're free. (I mooch from my friends)

Watching friends' movies? Our lawyers will be right over!

-RIAA

Attention: stop this. Right NOW (-1, Troll)

Anonymous Coward | more than 11 years ago | (#6953641)

I don't think that I need to name names, do I? You've threatened my family, my livelyhood and my children. This ends now. I will persue legal means to end this and if that DOES NOT WORK I will persue any alternatives that I need to.

We go back a long ways, it didn't have to end the way it did. YOU KNOW what I'm capable of and I KNOW where you live.

This is your LAST warning.

TROLL EXTERMINATION ORDER #BF34d.c5Fsd (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#6953661)

By order of the Slashdot Troll Review Board, a warrant has been issued, to be executed within the next 72 hours. Thank you for your cooperation.

R.M.

Chinese Popup Spammers (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#6953642)

202.131.221.61

Keep an eye on these spamming fuckers.

Sure I'd love to have my bank statements... (5, Insightful)

Currawong (563634) | more than 11 years ago | (#6953644)

...500 pages long with 3 zillion transactions. *Thats* why it'd fail ;)

You know... (1, Interesting)

Bame Flait (672982) | more than 11 years ago | (#6953656)

The mere fact that the article reports on two different systems highlights an enormous problem in the world of micropayments: competition creates more problems that it solves! The beauty of a micropayment system is that one doesn't have to keep an account with a single provider, and oftentimes these providers are small enough so that an account would be senseless anyway; the issue created, however, is that consumers moving from one provider to the next are going to need a common ground for payment between them. Although this is what a micropayment service is supposed to be, a flourishing of different micropayment systems will mean consumers will have to stick to one and be limited in where they can spend, or go through the hassle (and probably expense) of creating accounts with many, partially defeating the original purpose. What do I see happening?
1. A single system gains the monopoly, and micropayments start to actually look worthwhile. OR
2. Consumers just continue to resort to big name information providers which they create accounts with, maintaining the status quo.
If the e-coins system I was a member of earlier in theis decade is any indication, I see the latter as the much more likely of the two evils to occur...

Re:You know... (1)

afidel (530433) | more than 11 years ago | (#6953696)

Basically the only way that will happen is if Visa, Mastercard, and one of the major EU bank cards colaborate to make a single system. The problem they would have is that transactions are still way too costly for them to process for them to do micropayments, their internal costs are around 18 cents per transaction variable cost plus a couple cent for the amoratization of their fixed costs.

Re:Sure I'd love to have my bank statements... (1)

LostCluster (625375) | more than 11 years ago | (#6953796)

That's exactly why it would fail. Every "electronic payment" transaction eventually comes back to your credit card or bank account, and that has to be properly documented on your statement. Until our financial service providers completely do away with paper statements, there's no way they're going to get the cost of processing a single transaction low enough... which is why micropayments will always have to be grouped into multi-dollar units.

Re:Sure I'd love to have my bank statements... (1)

Tyler Eaves (344284) | more than 11 years ago | (#6954086)

Bullshit. Just have a central processor who offers prepaid credit. You buy in with your credit card in standard units ($5, $10, $20, etc) and then use that until it runs out, then you charge it up again.

Micropayments and prepaid cellular (2, Insightful)

The Monster (227884) | more than 11 years ago | (#6953916)

500 pages long with 3 zillion transactions
I think the model that will make the most sense is something analogous to prepaid cellular service. I don't use a cell phone enough to justify the typical flat monthly fee, but it's nice to have it for when I do want to use it. So, even though I'm not exactly their target demographic, I went with Virgin Mobile [virginmobile.com]
Calls are 25 cents a minute for the first 10 minutes in any day, and 10 cents a minute for the rest of the day. There are other services that can be billed to my account as well. I have to 'top up' by adding a minimum of $20 to my account every 90 days, and I never use that much airtime, which is why I like the service. Even if I did use it more than that, it'd still be way less than the conventional accounts are.
I don't see every phone call I make or take on my VISA statement - I just see that $20 charge to Virgin every few months. (You can go cashless by buying a $20 card at various retailers.) I can check out my Virgin transactions online for details, with no dead trees or postage stamps involved. If I could use my prepaid airtime account to do micropayments, I'd probably do it. Sir Richard - are you paying attention?

Micropayments are doomed (5, Funny)

Eponymous Cowboy (706996) | more than 11 years ago | (#6953645)

I honestly can't think of a single web site [slashdot.org] where people would be willing to spend $0.005 to view a page.

Re:Micropayments are doomed (2, Informative)

LostCluster (625375) | more than 11 years ago | (#6953727)

But /. won't let you buy one page for a half-penny. You have to buy in minimum units of 1000 pages... that means instead of 1000 micropayment transactions you're actually making one normal transaction.

Re:Micropayments are doomed (4, Funny)

Stary (151493) | more than 11 years ago | (#6953800)

No. 1000 micropayments would be... 1 millipayment?

Micropayments (0)

Anonymous Coward | more than 11 years ago | (#6953646)

Give up man. You will never get money out of Microsoft.

And I will never read this article....

micropayments suck (2, Insightful)

nnnneedles (216864) | more than 11 years ago | (#6953649)

Everyone with half a brain realized this years ago, no matter how many hype articles there was in the media. Micropayments is great for companies, and a pain in the ass for consumers..

e-cash? Shut up. We got credit cards, paypal and we dont want more accounts and stuff to keep track of.

Paypal (1, Interesting)

Anonymous Coward | more than 11 years ago | (#6953686)

Why do you think Paypal has gone to such lengths to build up a huge userbase? They're positioning themselves to be the micropayment processor. You deposit money in your Paypal account and avoid nasty CC processing charges.

Re:Paypal (1)

anthony_dipierro (543308) | more than 11 years ago | (#6954056)

Unfortunately, that would violate the agreements they signed to be allowed to accept credit cards. Otherwise I bet they'd already be doing it. Paypal is big, but not big enough to give the finger to Visa and Mastercard - yet.

But, but, but... (4, Funny)

Anonymous Coward | more than 11 years ago | (#6953660)

The RIAA said nothing is really free! There are poor people starving in China because I didn't buy the Macarena song.

comp.sys.amiga.games (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#6953663)

Trolls have over taken this forumn. I am calling on all peoples of amiga to start posting to this forum, and drown out the lamers.

THank you very much

MONEY!! (0)

Anonymous Coward | more than 11 years ago | (#6953685)

I think that it wont work unless you do have a LARRRRRRGE flow of traffic that can support it, such as Slashdot, but even there, most of the structure has been already implimented, and though i dont have /.'s figures, I bet is only coveres just bearly what it costs to run the place.

oh and *cough* content *cough*

instead of subscriptions, maybe (3, Interesting)

midgley (629008) | more than 11 years ago | (#6953694)

There are things I would pay a penny for (0.01p) (I thought we have pennies, and the US has cents, but we seem to be swapping the words) that I won't take out a subscription for, and things that I am happy to subscribe to such as The Independent newspaper. [independent.co.uk] I found Jakob Nielsen's Alertbox articles moderately persuasive, including the suggested interface for feding back to the user the rate at which virtual coppers were leaving the virtual purse. I remember a broker explaining to me that people won't pay for information, and therefore the busines model for the company being set up was of a walled garden...I thought he was wrong then. You won't have heard of the company, it sank.

Re:instead of subscriptions, maybe (1)

altek (119814) | more than 11 years ago | (#6953877)

Just to clear this up for you - a "penny" is the common term for a one-cent copper coin used in the U.S. It's really the *only* term for that coin in fact, nobody says "I'll give you a one-cent piece for you thoughts." When referring to a price, *usually* we'd say cents, however, as in "That gum costs twenty-five cents", not twenty-five pennies.

Just my two pennies. ;)

Music and Movies (2, Informative)

blackmonday (607916) | more than 11 years ago | (#6953697)

He barely mentions music and movies, but Hollywood is eager to charge us per vieweing, rather than a pay-once watch/listen forever deal. Pay-per view and Video on demand are a current example. Of course, as long as DVDs and CDs remain mainstream, we won't have to worry about paying 10 cents every time we listen to the "Macarena".

Re:Music and Movies (1)

LostCluster (625375) | more than 11 years ago | (#6953717)

Yes, but they can't collect units smaller than the price of a postage stamp. They can charge-per-view in the form of a subscription environment in the form of buying 100 "points" for $10, but they can't charge 10 cent per view with the option of walking away after the first view because that's a unit that the financial system is just not willing to support.

Re:Music and Movies (1)

Tony Hoyle (11698) | more than 11 years ago | (#6953740)

A movie has a certain amout of percieved value to the consumer - it's 'worth' 4 to rent the DVD so the video shops succeed. However is a web page 'worth' 0.001p? The value is too small to have much meaning, but there's still the idea that you're paying for it, which is offputting.

Also there's basic supply and demand - if slashdot started charging it'd quickly be replaced be a free alternative... after all coming up with a dozen 'microsoft sux' articles a day can't be that hard :)

In a similar vein if a mailing list started charging I'd simply not subscribe (or, better.. get someone who already subscribes to relay it to me for free).

Shirky is wrong. (4, Insightful)

Anonymous Coward | more than 11 years ago | (#6953712)

phone calls, local and long distance, often are pay per unit of some sort. calling 411 too... yet, people can and do "calculate" that calls are worth making, and they pay for them.

He's sunk his teeth into a clever sounding argument here, and he won't let go, but it doesn't make sense. It is potentially true that the web has brought the price of info down to nothing, but that doesn't mean it's because micropayments fail.

Re:Shirky is wrong. (1)

anthony_dipierro (543308) | more than 11 years ago | (#6953770)

phone calls, local and long distance, often are pay per unit of some sort.

Long distance especially is an excellent example of a micropayment system, too. You could theoretically use a different long distance provider for every single long distance call you make. Sure, most people don't do that, but it is possible. I myself don't have any particular long distance provider set up on my home telephone line, but just use a 10-10-whatever whenever I for some reason am not using my cell phone for a long distance call.

Re:Shirky is wrong. (4, Insightful)

JayBlalock (635935) | more than 11 years ago | (#6953803)

Actually, they'd be a perfect example of why micropayment systems DON'T work. The reason the telephone charging system works is that people DON'T stop and think about it. You don't have to fish a quarter out of your pocket and plunk it into your home phone. You just pick up the phone and dial - which makes the charges invisible to the user, and most likely, almost totally ignored. (how many of you, honestly, actually think about what a call is costing, until you've been talking and suddenly say "oh crap, it's been two hours! This is gonna cost me a fortune!")

If you DID actually have to make a conscious decision to place a financial transaction every time you used the phone, long distance calls would plummet. And THAT'S what this article is arguing. For a web-based micropayment system to work, it would have to follow the TelCo model - you hand the website in question your credit card, and then you don't hear a word about the cost of the services again except once a month in the mail. And this is, for reasons too obvious to bother typing out, NOT a good idea for internet-based systems. And that's why Internet micropayments don't really work.

Re:Shirky is wrong. (1)

anthony_dipierro (543308) | more than 11 years ago | (#6953902)

Actually, they'd be a perfect example of why micropayment systems DON'T work.

Considering that they are a micropayment system, and that they DO work, I think you're wrong there.

The reason the telephone charging system works is that people DON'T stop and think about it.

There's no reason an internet micropayment system couldn't work the exact same way. In fact, AOL used to work that way. It succeeded for a long time, and then the internet came along and undercut it with free content. But not all content is available for free. Music, movies, and highly specialized content (stock reports, collocated government data, etc) are still pay, and would work fine in a pay-per-use system. The only problem is that there's no universal infrastructure for such payments. Sure, you can get movies online through one service, and music online through another, and stock reports through yet another, but this requires longer-term commitments than just buying one song from here, another from there, one movie here, and one stock report there.

how many of you, honestly, actually think about what a call is costing, until you've been talking and suddenly say "oh crap, it's been two hours! This is gonna cost me a fortune!"

Well, as I said, I do since I don't have a long distance carrier on my home telephone. So it's 10-10-whatever, and I know what the cost is ahead of time for that service. But I admit I'm probably in a very small minority in that sense.

For a web-based micropayment system to work, it would have to follow the TelCo model - you hand the website in question your credit card, and then you don't hear a word about the cost of the services again except once a month in the mail. And this is, for reasons too obvious to bother typing out, NOT a good idea for internet-based systems. And that's why Internet micropayments don't really work.

No, for a web-based micropayment system to work, it would have to follow the TelCo model - you hand one company in question your credit card, and then you can use hundreds of others without hearing a aword about the cost of the services again except once a month in the mail. And thhat WOULD be a good idea for internete-based systems. It's just that no one with enough capital to actually pull it off has stepped up to the plate yet. It would pretty much have to be a credit card company. Only they have the reach to be able to pull something like this off.

Re:Shirky is wrong. (1)

LostCluster (625375) | more than 11 years ago | (#6953878)

Still, do any of those 10-10-whatever numbers let you buy simply 1 minute of long distance from them per month for less than 50 cents?

They either hit your with a heavy fee for making your first call of the month with them, or they have minimum per-call charge, such as the "first 15 minutes for 99 cents" pricing model that still charges you the full 99 cents for a one minute answering machine message.

Besides... you're not exactly gonna write a check for 99 cents anyway, their charges get tacked onto your standard landline phone bill, which is always greater than $20 anyway...

Re:Shirky is wrong. (1)

anthony_dipierro (543308) | more than 11 years ago | (#6953908)

Still, do any of those 10-10-whatever numbers let you buy simply 1 minute of long distance from them per month for less than 50 cents?

Yes. For example, 10-10-321 charges 18 cents a minute, and to quote their website:

# You don't have to switch phone companies.

# You don't have to sign up.
# No monthly plan fees.
# No minimums, no per call connection fees.

18 cents is under 25, and qualifies as a micropayment, I'd say.

Re: Pay-per-unit is different than micropayments. (1)

Leeji (521631) | more than 11 years ago | (#6953835)

I've got to disagree with you. We don't pay utility companies in micropayments, we pay them a rate for their service.

We're not buying a one minute conversation from our phone company -- we're buying a rate that covers an entire conversation. The cost of an entire conversation is where we make our value judgement.

We're not buying 1 kWH of electricty from our electric company -- we're buying a rate that covers our entire month of TV watching, etc. The cost of the entire month is where we make our value judgement.

Re:Shirky is wrong. (0)

Anonymous Coward | more than 11 years ago | (#6953909)

I think the argument he's trying to make is that micro-payments have failed because the internet has brought the cost of information down to zero.

Ah, but you miss something... (1)

poptones (653660) | more than 11 years ago | (#6953984)

phone calls, local and long distance, often are pay per unit of some sort. calling 411 too... yet, people can and do "calculate" that calls are worth making, and they pay for them.

That's because "everyone" lacks the presence of IP phones. If everyone had sip phones in their homes and could call anywhere essentially free, would they still use the clunky old RJ11 boxes? Look at cellphones: I have a cousin up north who has cellphones for himself and his wife. They don't even bother with landlines anymore, and they call down here and talk all they like because, within very high limits, the phone bill remains the same price. This fits exactly within the argument presented in the article.

The other side to that is the harder someone makes it to get their info, the more effort activists will put into eroding that artifical value. Perfect example: MP3s. The harder the crackdown on people who share MP3s, the more concerted the efforts (by some people) become to sustain the practice. And these aren't even micropayment transactions yet, but essentially "free" right from the start - in fact, the activists are essentially paying for the opportunity (obtaining CDs to rip and bandwidth to post) to provide free material. Apple may claim to have sold "Millions of songs" but how many Billions of "songs" do you think are download each year from kazaa, usenet, and other services?

Another example: at least one porn site I know put all their content inside java applets (I know this because I know the company that tried to make a business of selling the backend software). The only way to see their content was to pay for the site and then suffer through the horrendous navigation tools supplied by the applet. To make things even harder for the viewer to find a back door, each image was actually assembled in the viewer from a collection of tiles, so even if you located the database of images, you were still left with hundreds of randomly named pieces to reassemble - a giant jigsaw puzzle of the electronic variety.

So, various cores of individuals made it their mission to subscribe, take screencaps of each image, and post them to usenet. This had the double effect of advertising for the sites and making the sites essentially worthless; even subscribers to a site found it more worthwhile to collect the usenet posts than to suffer the "legitimate" distribution model, and so this "service" was (mercifully) driven out of business - along with the sites stupid enough to adopt their misguided ethics.

Re:Shirky is wrong. (1)

schon (31600) | more than 11 years ago | (#6954196)

phone calls, local and long distance, often are pay per unit of some sort

Really? The only person I talk to long distance is my mother, and she's never charged me anything for talking to her.

I'm quite certain she doesn't charge anyone else, either.

Perhaps you might read the article, before blathering on about something you don't understand.

Re:Shirky is wrong. (2, Insightful)

Robotech_Master (14247) | more than 11 years ago | (#6954238)

The funny thing is, though, that they're also an example of how people don't like micropayment systems. To wit, the introduction of plans like MCI's Neighborhood, an integrated plan where $50-70 depending on what state you're in gets you unlimited local and domestic USA long distance, so you can call wherever you want for as long as you want and not have to worry about how much of a bill you might run up. People who might not even necessarily make enough LD calls to get their money's worth are signing up just so they have the peace of mind of knowing they're not on a ticking meter.

I work customer service in an MCI call center (though my opinions and viewpoints do not reflect those of MCI), so I know whereof I speak.

Something to ponder: (1)

windex82 (696915) | more than 11 years ago | (#6953720)

Perhpas it /is/ the content being offered thats making micropayment fail, just not the way the article is describing.

Instead of charging 25c for EVERY game you have, why not charge a flat fee of maybe 1.50-2 and you can access everything for an hour/day or until you close your browser.

Why does every website want to go with the monthly fees? This stuff is on the internet the place where pretty much anything can happen instantly, why do all subscription type services involve so much time?

Micropayments will fail because.. (4, Insightful)

rf0 (159958) | more than 11 years ago | (#6953722)

Expierence has shown that whenever people start trying to charge for content that people will find other sources which are free. We have become use to information being free and feel (wether rightly or wrongly) that it should be

My $0.000002

Rus

Re:Micropayments will fail because.. (0)

Anonymous Coward | more than 11 years ago | (#6953955)

"My $0.000002"? Don't you mean "My $0.000000"?

Re:Micropayments will fail because.. (1)

anthony_dipierro (543308) | more than 11 years ago | (#6954071)

Expierence has shown that whenever people start trying to charge for content that people will find other sources which are free.

A billion dollar recording industry and 20 billion dollar movie rental industry has shown thhat you're wrong.

Internet access isn't free (1)

anthony_dipierro (543308) | more than 11 years ago | (#6953725)

but with micropayments, maybe it could be. DSL costs what, $50/month? Web hosting costs what, $5/month? Most computers could easily host 10 websites a month, and with micropayments the people paying for the hosting wouldn't have to commit to long term contracts. Just pay by the day, and have an automated script move you over if your provider goes down.

I just don't understand the internet (0)

Anonymous Coward | more than 11 years ago | (#6953728)

You can create a really good web page that's popular, but *you* have to pay for the bandwidth.

The problem would solve itself if the bandwidth was paid entirely for by the end which is downloading the data, rather than serving it. Then the ISPs would have to pay to download from sites, and payments to sites would become part of a customer's ISP bill.

Free as in beer? Or as in speech? (1)

WegianWarrior (649800) | more than 11 years ago | (#6953739)

Free is good... or is it?

One of the great things about the internet is that anyone can publish, no matter how small and insignificant they are. One of the really bad things about the internet is that anyone can publish, no matter how loony and horrendusly wrong they are.

As he points out in the article, one of the reasons why people thought that micropayments would work was filtering. But as Google does that for free, all you need to do to make your pages popular is to get lots of people linking to you... or if you're devious, link to yourself. It don't matter how wrong you are, or how crazy your conspiracytheori is - on the web, you and I carry as much weight as the next guy over.

Sure, papers like the NY times requires registration (thus they ain't complely free, even if you don't hand over money), but at the same time they do provide information you can trust a bit more... and that is worth someting - at least to me.

Free speech and free beer is two different thigns... but if we keep demanging that all the stuff on the web should be free as in beer, we also get all the loonies practising their free speech, adding way to much noise to the signal.

Re:Free as in beer? Or as in speech? (0)

Anonymous Coward | more than 11 years ago | (#6953861)

too much noise to the signal

If this is your criteria for whether the internet is worth viewing, then why are you reading /. ??!! How could it get any noisier wading through several dozen comments at the start of a page stating, "I HAVE A GREASED UP YODA DOLL SHOVED UP MY ASS!"?

Micropayments are the Next Big Thing(TM)... (2, Interesting)

JessLeah (625838) | more than 11 years ago | (#6953743)

...and have been so since 1993. And probably will be so in 2013. :)

What's this guy smoking? (2, Interesting)

Stary (151493) | more than 11 years ago | (#6953745)

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.

Sure. I'll be contacting him shortly about hosting some sites... since he's figured out how to do it for free, regardless of the bandwidth usage. In the end, someone pays. You may or may not do it directly, which /. is a good example of, but you do pay.

Re:What's this guy smoking? (1)

Prof.Phreak (584152) | more than 11 years ago | (#6954022)

Unless you're serving something herendously huge (video/audio files), the cost of 'bandwidth' is minimal. Many webhosts don't even give you a limit (netmegs.com [netmegs.com] ).

At roughly 50-100k per page (graphics + html), you'd need a *lot* of hits to even approach the limit on even the cheapest providers.

Re:What's this guy smoking? (1)

Stary (151493) | more than 11 years ago | (#6954069)

Ok, so the only "content" worth serving on the ever-evolving net is text/pictures? I'll agree to that you need alot of hits to approach the limit with those, but with anything larger, you'll be there fast. Also, if your application/content relies heavily on dynamic things, you could quickly bog down servers with that.

The problem with the net is that popularity limits itself. Once your site gets too popular, you'll hit limits and need to start paying alot more. Naturally, you (providing free content) don't want to pay for it, so you try to charge your viewers/readers/visitors/users for it, and as a response, they go somewhere else. Your site is now roughly as popular as before, but with a bad reputation. Similar reactions occur to advertising and even requests for donations / selling t-shirts / all other failed schemes people have tried.

Maybe I'm biased since I've spent alot of time dealing with these issues when hosting huge amounts of audio files for "free", but that's my point of view anyway... to maintain an impression of "freeness", the only way is to find someone else to pay.

Re:What's this guy smoking? (1)

Prof.Phreak (584152) | more than 11 years ago | (#6954138)

Ok, so the only "content" worth serving on the ever-evolving net is text/pictures?

Well, that's the one they're planning on charging for with Micropayments. I see no problems charging for music downloads (if that ever works out). I think fileplanet.com (or something) charges for file downloads.

You can always try to sell banner space; if getting a lot of hits those could actually bring in the needed capital.

Otherwise yes, I'd agree that basically you are the one who has to fork over the money. It's not a 'major' expensive though (at least not in my case). A few hundred dollars (per year) is a reasonable price to pay to host your own site and having an outlet for your own opinions...

Also, for large popular donwloads, we have BitTorrent :-)

Cost of Marketing? (1, Insightful)

sparkydevil (261897) | more than 11 years ago | (#6954063)

The fact that digital content can be distributed for no additional cost...

Any content source, or wannbe journo, that thinks distribution is free is in denial (not a river in Egypt).

The biggest cost of distribution is MARKETING. Ask Coca-cola. Up to now the business model for most news content, for example, has ridden on the huge growth of the net = lots of free publicity and free content to build the market and get people used tot he idea of using the net.

Well,nopw that you are used to it, you can get used to paying for it too.

Now the market is saturated, sites will start to charge, but to charge they have to MARKET their benefits because they are now trying to take market share from each other. The business model works that way, because their competitors are doing the same thing.

I own an online news site and I believe that micropayments could work if they were applied globally and simultaneously, as in the case of Apple's i-tunes. The entire news industry is waiting for such a system.

The market will return to the way it was before the net. You will pay for music, you will pay for news. Enjoy the free ride for now -- it won't last much longer.

Re:What's this guy smoking? (1)

bcrowell (177657) | more than 11 years ago | (#6954136)

  • Analog publishing generates per-unit costs [...] Digital publishing doesn't.
    Sure. I'll be contacting him shortly about hosting some sites... since he's figured out how to do it for free, regardless of the bandwidth usage. In the end, someone pays.
Sure, he's wrong literally, but in many ways his point is still valid:
  1. The cost of webhosting doesn't go up linearly with bandwidth. For example, I recently upgraded to a better webhost and got something like a 1000% more bandwidth, and I'm only paying about 50% more.
  2. He's not saying that everyone is willing to pay to subsidize their own web publishing, only that some people are. He compares it to ecological niches. It doesn't matter if one individual bird fails to survive by eating a certain type of seeds, as long as others of its species are successful.
  3. Your point is more valid for high-bandwidth content like audio and video, but he's talking about text and pictures.
  4. There are methods of distribution that really are free to the author, e.g., P2P.

Donations vs Micropayments (2, Insightful)

noname3 (580108) | more than 11 years ago | (#6953747)

This guy is bang on in many points. Even a free registration is annoying, I stopped reading New York Times when they fixed the archive.nytimes.com hole. Fileplanet? I have to register to wait in line for 3 hours to download a patch? Micropayments are even more of a hassle. I liked the way the author described the way people evaluate purchase decisions, and he's right: I wouldn't pay for a newspaper that charged by the article, or word. Penny Arcade, RPGWW, Poisoned Minds, GU Comics and others tend to have a gift for any donation. They're the ones that clean up. I wonder how successful that method works for sites that aren't webcomics. LiveJournal and /. seem to be doing well.

Re:Donations vs Micropayments (1)

anthony_dipierro (543308) | more than 11 years ago | (#6953819)

Micropayments are even more of a hassle.

The whole point of micropayments is supposed to be to avoid registration hassle. If all you had to do was put in your credit card number, and you could be guaranteed that you would only be charged a certain amount on that account, it wouldn't be too much of a hassle, would it? A properly implemented micropayment system would work even better than that. You'd only have to sign up once, and after that you'd only have to click a button to authorize a payment.

Sure, it's not going to work for content that is already free, because free is better than paying. But other sites which currently don't exist at all or are tedious to use would benefit greatly. For instance, I bet a lot of porn sites which currently force you to go through a long registration hassle so they can collect their $3/month fee would benefit from the system, especially if it could guarantee anonymity.

Re:Donations vs Micropayments (1)

noname3 (580108) | more than 11 years ago | (#6953933)

You've got a good point. If the ideal conditions you mentioned were there, I'd be willing to use that system. Micropayments are supposed to avoid the registration hassle, but it's not quite there yet.

The article itself lists seven micropayment companies. I compare the current situation to paid wifi. There are many companies selling access, but chances are you'll need to get accounts with a few to get access to all the places you want and you need to check what is covered by who. Not hassle free at all.

There's also the problem of how to collect the money. I've run into two micropayment solutions in my travels on the web, both required me to install an IE plugin. Meanwhile, you don't need a plugin or paypal account to donate.

Re:Donations vs Micropayments (1)

anthony_dipierro (543308) | more than 11 years ago | (#6953982)

The article itself lists seven micropayment companies. I compare the current situation to paid wifi. There are many companies selling access, but chances are you'll need to get accounts with a few to get access to all the places you want and you need to check what is covered by who. Not hassle free at all.

I suspect what's going to happen is that as soon as one of the micropayment companies starts to get a little too big, one of the credit card companies is going to sweep in and either buy it or destroy it. Already you can make one-time payments with a limit with a unique credit card number. The only two differences between that and a micropayment is that the credit card companies charge exorbitant fees on small transactions, that the credit card companies require name and address information in order to complete a transaction, and that the credit card companies don't guarantee payments in the case of a chargeback. All three of those problems could be solved simply by a policy change by the credit card company.

the value of a service (2)

TheSHAD0W (258774) | more than 11 years ago | (#6953753)

I'd have to disagree that micropayments won't work; I think micropayments do have potential, though establishing the system may take some work.

Given the choice between, say, downloading a song off Grokster for free, or paying a dime to download it directly from the artist's web site, it's true that many people will choose to grab it for free. But if the version off the web page is known good while the one on Kazaa may have glitches, that ten cents may not seem to be such a big deal. The good feeling one gets in "donating" to an artist one likes helps as well.

The bugaboo in micropayments isn't whether people will do it; it's in getting such a system emplaced. What good is being able to pay someone a nickel over the net if you've got to buy $9 worth of nickels first, with an extra buck for a transaction fee?

I suspect what we need is a "killer app". For instance, someone selling a nice, useful tangible service and ONLY accepting this micropayment as currency. An entity doing so would also need to bear the cost of sustaining this electronic currency.

Re:the value of a service (0)

Anonymous Coward | more than 11 years ago | (#6953976)

Moron

Bring on the Killer app (0)

sparkydevil (261897) | more than 11 years ago | (#6954103)

I totally agree. If Apple, or Microsoft, can make a global payment gateway for content, in the same way that Apple made i-tunes, then we will have the killer app./ Any, yes, your blog will sign up too.

It's the impetus of opening your wallet (3, Interesting)

Leeji (521631) | more than 11 years ago | (#6953758)

Shirky makes good points -- I think the real problem with micropayments is that you have to counteract the momentum of a closed wallet.

People are frugal -- especially online. I pay for the occaisonal shareware, and I subscribe to the occaisonal service. Like Shirky mentions, I can easily determine the value of spending $20 to support a software author I like. When I see enough value, I open my wallet.

When it comes to $0.25 for a comic strip, though, we have no point of reference when it comes to value. We're buying something of "fractional" value; 1/365th of a yearly subscription, or 1/2 a laugh, for example. Is a comic really worth 5 cents a frame? If I'm doing it for moral reasons -- to support the author -- will he even notice the $0.25? What exactly is a good deal for $0.25, anyhow?

When it comes to something buying something with such fractional value, it's simply not worth consumers' time to make that buying the decision. It's definitely not enough to counteract the momentum of a closed wallet.

Re:It's the impetus of opening your wallet (1)

JayBlalock (635935) | more than 11 years ago | (#6953855)

I think in things like that, people generally compare it to real-life equivilents. Like in the case of Bloom County, which I know a bunch of /.ers subscribed to when it became available. $10 gets you a year of Bloom County which, if you bother working it out, is far cheaper than buying an equivilent number of books. Plus you get access to their library of comics - I suspect most of the Bloom'ers are also getting Calvin and Hobbes. And whichever other ones they want, so that perceived value is multiplied by however many other comics you won't have to buy.

So compared to the physical world, that $10 represents a fine value and we're not going to start trying to break down panel-by-panel costs.

I think the "problem" here is that, for whatever reason, the idea has been set up in the customers' minds that if it is online it must be CHEAP. I suspect deep down most people realize that it's far cheaper to have a load of content on a server than to print up thousands of books\newspapers\whatever. I know there's not an exact formula, but in my experience to entice people into buying something in electronic form, it generally needs to be at least half the price of the real-world equivilent.

(the success of Apple's iTunes does seem to belie this a bit, as 99c a song works out to about the same price per album as a physical CD. But there are a lot of factors that would need to be analyzed in that case. (how many people are actually downloading whole albums? How many are just downloading singles? How many have an eye towards constructing compilation discs for themselves? etc...))

And, of course, it all goes to hell once you start talking about things like Blog entries, or links, that really have no real-world equivilent at all. THAT'S when the system really breaks down - if people have nothing to compare the price with, they usually decide it's too expensive and wander on.

Donations vs Micropayments (actually readable) (1)

noname3 (580108) | more than 11 years ago | (#6953768)

(Gah, I hate it when I post in HTML formatted mode instead of POT. /me trouts self.)

This guy is bang on in many points. Even a free registration is annoying, I stopped reading New York Times when they fixed the archive.nytimes.com hole. Fileplanet? I have to register to wait in line for 3 hours to download a patch?

Micropayments are even more of a hassle. I liked the way the author described the way people evaluate purchase decisions, and he's right: I wouldn't pay for a newspaper that charged by the article, or word.

Penny Arcade, RPGWW, Poisoned Minds, GU Comics and others tend to have a gift for any donation. They're the ones that clean up. I wonder how successful that method works for sites that aren't webcomics. LiveJournal and /. seem to be doing well.

For the insightful version of this comment... (0)

Anonymous Coward | more than 11 years ago | (#6953780)

...please send me nine cents.

How About a nice Counterpoint? (5, Informative)

gallavad (662421) | more than 11 years ago | (#6953782)

For a view from the other-side (that of the independent content provider) check out Scott Mccloud's response [scottmccloud.com] to Shirky's latest essay.

A Counter-Counterpoint. (1, Insightful)

Anonymous Coward | more than 11 years ago | (#6954200)

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 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, if there was no other payment alternative. But there is -- the subscription model, where you have only one transaction a time period, and unlimited access during that time.

The result is that micropayments will only work as a buisness model in a tiny layer between free and subscription, and only if the payments and associated transaction costs of the micropayments combined have a user-percieved cost lower than a cheap subscription. Shirky clearly doesn't think that there's enough space there, and McCloud's arguments do nothing to address it.

clearly argued (2, Interesting)

urbazewski (554143) | more than 11 years ago | (#6953838)

I usually end up gnashing my teeth when reading articles about the economics of the internet, but this one was well thought out. It's interesting to contrast his argument that the web and other forms of technology that allow people to produce and distribute their own work will undermine micropayments with the overall trend towards a "winner take all society" or "blockbuster/bestseller society" where fame and fortune are increasingly concentrated on a small minority of winners. (Economist Robert Frank and co-author Phillip Cook outline the argument in their book The Winner Take All Society [amazon.com] .)

The web shows the same pareto distribution that Frank & Cook discuss, with a few sites getting a huge number of hits and the vast majority getting just a few.

However, Shirky may still be right that the proliferation of free content will prevent even wildly popular sites from turning their fame into fortune. It's also possible that the continued emphasis on blockbusters is a flawed business model that causes publishers/producers to overlook vast markets for a greater variety of content. It's the unwillingness to see beyond the huge profits of a Britney Spears or Madonna album that leads the music industry to pursue shortsighted strategies of squelching online access to music.

People pay for quality. (4, Interesting)

xanderwilson (662093) | more than 11 years ago | (#6953840)

The author uses two pretty low-quality examples. Just as people are loathe to pay $20 shareware for software worth about $5, the two examples (.10 for PowerPoint slides) don't sound worth it either. When valuable content comes priced at or below their value--that's when Micropayments have a chance to succeed. Not when people continue to follow the paradigm of overcharging customers, just on a smaller scale now.

I thought McCloud's comic was well worth the 25 cents and BitPass was pretty easy to use. I might experiment with it on a future project of my own--alongside free content.

I don't remember exactly what separates a "micropayment" from a "small payment," but consider the apparent success of iTunes. I've talked to a lot of people who are amazed at how easy it is to click and buy--at $.99 even--and they're more willing to spend than they thought they were. Can people find these same songs for free? Probably. But they're paying for how much more convenient the paid service is to them than the free version.

I'd love to see how well or how poorly McCloud has done with his comic. Here's someone who has demonstrated his value to the consumer in the past with both free and priced content. I think finding out if people were willing to follow HIM from free to .25 will be more telling than this article.

Re:People pay for quality. (2, Insightful)

Prof.Phreak (584152) | more than 11 years ago | (#6954084)

Can people find these same songs for free? Probably. But they're paying for how much more convenient the paid service is to them than the free version.

How about people paying to not have to illegally download music? (or maybe they don't know how/where to look?)

I'm sure nobody would be paying anything for music if it was legally available online from the artist's website (click a link and download, etc.)

While music is hard to compare (you pay for the singer - so even if someone else sings a similar song, it's not the same). With most text based web-content, you can substitute things. I don't have to read NYTimes if I want to read about a particular story. I don't have to read slashdot for geeky news; there are always alternatives.

Yes, some things are worth paying for, but a vast majority of users can live without a vast majority of the content - and can find free alternatives to the parts they really do want to read.

The forgotten segment (4, Insightful)

Perianwyr Stormcrow (157913) | more than 11 years ago | (#6953896)

If I can buy pre-paid BitPass cards without a credit card, with a similar level of convenience, then we have a winner.

Either that, or anything targeted at teenagers will never be able to charge.

Does free scale though (1)

Second_Derivative (257815) | more than 11 years ago | (#6953930)

I've had some hands-on experience with this. Sure enough it's easy to, say, make a smallish website with a community forum. Most people are willing to actually pay money to be visible; the motivations for this are a discussion in and of itself. Something like $10/mo is the norm; after all this is the cost of a few quick meals. Not something you'd miss too much.

But then supposing your site gets really massive and begins to outstrip that seemingly infinite 10Gb/mo transfer limit (or however much it is). So many sites either start charging or put bloody huge and popup type ads in place, the logic there being "the more annoying and inescapable you make it, the more people will be interested" -- at least, this is what passes for logic in your average marketing department anyway.

That's where the problem lies. I've actually found a system that does seem to work quite well and will continue to work if a lot of people use it -- reselling. At the moment I'm in the process of scaling up the operation to a $100/mo dedicated server with 700GB/mo of bandwidth. Of that I only use about 150 but let's say we allocate 350 of that for me as room to grow. Now you take the other 350 and divide it by ten. 35GB each. Similarly, split the 40GB hard disk into two; 20GB for the OS and your main site and then ten 2GB pieces. Now resell these resources and hey presto you've got a sustainable model that makes everyone happy (and even lets you get away with being hosted for free, at the expense of acting as tech support for ten people -- I make it clear that while I'll reset passwords and set up POP3 boxes and domains etc I'm not going to teach people how to write HTML or use an FTP client. But then again neither does any other hosting provider)

I have a fair bit of confidence in this method. That it works for me is no small part of that, but also it's a lot more psychologically acceptable way of asking for support. If people pay $10/mo to support your site they're going to become extremely picky about whether or not they're getting their bang for their buck. If you offer hosting though, many people want to run blogs and the like. $10/mo may get you 3GB of disk from a commercial provider or maybe an extra 5GB of traffic due to the economies of their operation's scale but considering a lot of people aren't going to go right up to their limit anyway they're not going to mind if they're helping their favourite site out. Of course, they'll expect good service from you as far as webhosting goes but that's a much more mechanical and predictable procedure than keeping the site interesting. That and considering you're probably not running your operation for profit, your reseller slices will quite likely have a very competitive price too.

Sorry if this isn't too coherent, it's coming up to 1am here. Does anyone else agree with me? Like I said it works for me but I dunno if it's a viable model in general or I just got lucky with the people at my site (well ok not mine, I help run it)

+5 Insightful (1, Funny)

ArmorFiend (151674) | more than 11 years ago | (#6953950)

I have a really substantial, insightful post for this discussion, however, before you can read it you must PayPal me 10 cents at the address in my profile. Thanks!

Re:+5 Insightful (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#6953983)

I see you are as drunk as I am. My comment is just below yours. Well, assuming you list your comments oldest first....

And I'm willing to bet you'll get at least one funny moderation. Probably more. So you can take you +5 insightful and shove it!

I would like to take this moment to welcome... (-1, Offtopic)

Anonymous Coward | more than 11 years ago | (#6953961)

...you all to suck my cock.

Please take a number, and form a queue clockwise around the room...

micropayments... (1)

YllabianBitPipe (647462) | more than 11 years ago | (#6953990)

one problem I see with micropayments is crowd psychology. if someone's car breaks down on a deserted road, it's quite likely someone will stop to help them. If the same car is on a busy highway, it's actually less likely ... because all the driver's by figure someone else will be stopping any time now. The end result is, sadly, it takes longer for someone to pull over and help said person, or said person has to fend for themselves.

How does this apply to micropayments ... well since something is on the net, people assume "someone else" is going to pay for it, so why the heck should I? If I can't get it for free at the source, heck, sooner or later someone will copy / paste it on /. or summarize it in their blog and I'll get access to it. So I think the end result is, stuff gets pilfered and nobody pays for it because of this crowd mentality.

Lastly I think it boggles the minds of some, but a lot of free content I find to be more interesting and entertaining than the paid stuff. And people do produce lots of neat stuff FOR NO MONEY. Don't ask me why, they just do.

I got more cheap entertainment from the Star Wars Kid than Scott McCloud's latest comic, that's for darned sure.

a practical way of implementing micropayments (2, Interesting)

clovercase (707041) | more than 11 years ago | (#6954006)

i think the most critical components to getting a micropayment system off the ground are:
  • seamless integration with web-browsing experience
  • trusted intermediary handling the payments
i think that google is perefectly situated at the moment to use its widespread goodwill for this purpose. the micropayment system could be integrated into the google toolbar [google.com] . users would prepay a certain amount to google that would reside in their account (google would keep a commission, say 10%). the balance on your account would be listed right on the toolbar, and whenever you visited a site requesting a micropayment, a message would appear on the toolbar (not an annoying dialog box) providing you with the following options: 1) never pay micropayments on this site 2) pay this site this time but ask me again next time 3) always pay micropayments for this site (unless the publisher changes the price required).

the amounts being charged would always be displayed, as would the running balance of your account.

This is an excellent article (1)

michaeltoe (651785) | more than 11 years ago | (#6954023)

The ideas presented here should be obvious to anyone who frequents news sites which have decided to put up full-page advertising, or webcomics which are too slow updating their daily strip. The result is always the same; find an alternative that's not so annoying. It's good to see these concepts explained so eloquently. Now if only the RIAA will figure it out.

If it's worth it, pay for it. (2, Insightful)

silverbax (452214) | more than 11 years ago | (#6954077)

The rule is simple, but so many people try to argue around paying ( or charging ) for anything.

If you try to charge for something creatively generated...be it software, art, music or whatever, someone somewhere will pull out the Elsworth Toohey method of attack and claim your brainchild should be public domain.

Conversely, too many people think they can charge astronomical prices for minimal or poor content. I like Scott McCloud's work, but 25 cents seems like a lot per comic strip. So, if 25 cents is too much, would people pay 5 cents? 10 cents?

Mr. Shirky's arguments have the taint of someone who desperately wants to prove that you can't charge for anything that doesn't come with a big business label on it. Otherwise, give it away, it belongs to everyone.
His arguments have some merit regarding micropayments and their effect of making consumers choose, but his general tact is that micropayments won't work because people are used to getting it for free ( and that distibution costs nothing to artists ) is making use of informal logic. If Jerry Seinfeld produced new 30 second episodes of Seinfeld and charged people $2 to view it, I'm not so sure people wouldn't flock to ante up. I'd probably pay to read Scott Kurtz'z PVP ( www.pvponline.com ). I've enjoyed reading it, usually every day. It's far superior to most of the comics in the daily newspaper, and I pay for those.

The simple truth is, we all have limited funds, so yes, if someone charges for something, we will have to be discriminating with our dollars. But, if the person is producing
something worth buying, then pay them. The artist is always getting 'free distribution' as Mr. Shirky seems to believe. Creating a comic is no different on concept than writing great software or producing great music. It takes more than time, it often takes actual education, materials, research, etc. If someone wants to give away their art for free, wonderful. But if someone wants to charge, it's understandable.

Re:If it's worth it, pay for it. (2, Insightful)

michaeltoe (651785) | more than 11 years ago | (#6954107)

The key point of Shirky's article was that publishers are removed from the scenario. There is no middleman, and an artist can publish his own work for whatever price he wants... compounded by the fact that it's usually easier to publish it for free and (as Shirky said) you'll get the competitive advantage in doing so. So while the example with Seinfeld makes sense for television, if anyone could produce similar material without landing a 'deal' with NBC, then no one would bother paying his ridiculous salary out of pocket. He would have never become famous.

Rather than pay... (0)

Anonymous Coward | more than 11 years ago | (#6954121)

...try Pico-Pay [pico-pay.com]

This is a unique micropayment system which uses advertisers, not web-users, to pay for content. We believe that it is more cost effective to the advertiser than banner ads, and yet less intrusive and far more anonymous to the web-user, than other payment methods.

All it costs the web-user is time, typically only a minute or two, while it gives the content provider real money for every access to their content.

The Fundamental Flaw in Micropayments (1)

rudy_wayne (414635) | more than 11 years ago | (#6954140)

Back in the mid 80's, long before the World Wide Web, Case Western University in Cleveland, Ohio started a free dial-up Bulletin Board System, paid for by the University and donations from local businesses. Soon, it was so popular that their budget just wasn't enough to pay for the expansion that the system so badly needed.

So they figured out how much it cost to run the system and divided that by the number of users. The number they came up with was quite small -- literally a few cents per user per month -- no profit, just enough to cover the actual cost. Certainly no one would be opposed to paying such a small amount.

Then they discovered a problem. The cost of creating, operating and maintaining some sort of payment collection system was greater than the amount of money they were trying to collect. And that's the fundamental flaw in micropayments.

By the time you build a system that's fast, reliable, secure, can handle thousands (or tens of thousands) of transactions a day, and has a settlements system so the proper people get paid the proper amount, the cost per transaction of running that system is more than the micropayments themselves.

In other words, every time somebody pays you 10 cents to view your online comic strip, it costs you 15 cents to process the transaction. So you're losing money, and what's the point of that?

Re:The Fundamental Flaw in Micropayments (1)

Wesley Felter (138342) | more than 11 years ago | (#6954224)

You haven't read any of the literature about micropayments, have you? Overhead costs are not just a solved problem but they've been solved a half-dozen different ways.

We need digital cash, not micropayments. (1)

YoungHack (36385) | more than 11 years ago | (#6954198)

I am not a big fan of micropayments, but I do think that we need a kind of digital cash. I don't consider PayPal or any of its direct competitors suitable.

Unfortunately the guys who came up with the implementations of digital cash (and therefore own the patents) have been dreadfully pathetic at getting it going in the real world.

You won't see micropayments, etc. go anywhere until those patents expire. Then I wouldn't be too surprised to see something useful come around with hope of getting adopted on a large (i.e. useful) scale. And I look forward to it.

Re:We need digital cash, not micropayments. (1)

Wesley Felter (138342) | more than 11 years ago | (#6954260)

I think you'll find that governments are a bigger impediment to digital cash than patents.

My friend made 15 cents through micropayments (1)

fname (199759) | more than 11 years ago | (#6954239)

Well, my friend Dave Copeland [davecopeland.com] posted a couple of musings to RedPaper. Someone even decided to plunk down the $0.15! If you don't believe me, check it out for yourselves here [redpaper.com] . And who says micropayments can't work!

Porn is at the forefront. Again :-) (1)

pr0ntab (632466) | more than 11 years ago | (#6954243)

What bloggers, online comic strip authors, etc. need is a system set up like Adult Pass or SexKey. (No links, use google find it when you're at home, not work.)

Like the telco model mentioned earlier, you join, pay a low monthly fee and all member sites get a cut. You don't get an itemized bill, but that may not even be worth thinking about. SexKey just has to make sure that it's cash flow is positive, and that member sites are getting their requisite amounts of payback depending on membership class.

No mental transaction cost... you can't think about that kind of thing when you've got you're mashing your joystick.

^_^;;;;

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