As traditionally concieved, micropayments are very small (< 20 cents) fees
that are charged automatically, or with simple verification each time a web page
is visited. Ideally, such a system would be implemented near-universally on the
client side, so that payment would not cause a barrier to accessibility -- e.g.
"you have to have micropayment software to view this page").
Mandatory micropayments fit into two different models. In the first, the fee
is the same for every page and is charged automatically. This can happen over
the whole web, or within one "trusted" site. In the second model, where payment
is variable, and the user is warned (preferrably with a minimal pop-up window)
before the charges are incurred. A "wallet" (a set amount of electronic cash at
a user's disposal) might also be set up to automatically pay for anything under
a set price.
There are no widely implemented standards for micropayments, so pay-per-page
systems (selling wine by the sip, as it were) are confined to sites where users
are willing to install new softare in order to access a site. Services like the
Amazon Honor System enable webmasters to charge users before allowing
them to see a page, but transaction charges render prices under $2 unprofitable.
The reasons that mandatory micropayments haven't caught on yet
probably have to do with the lack of incentive for users to adopt a widespread
standard in "wallet" software. In addition, there are numerous technical
hurtles, including giving access to search engines, keeping transactions secure,
for a large number of pages which they didn't intend to visit. Yet another
challenge is the tendency to prefer flat-rate pricing over metered usage, i.e.
people find being charged for every web site they visit similar to the nagging
awareness that one is being charged by the minute on a long distance call, no
matter how low the rate. As a result, the tendency is to prefer flat-rate
Technical barriers aside, any mandatory micropayment scheme needs to have a
compelling reason for users to download and install new software, much less
trust it with their money. Given the difficulty of this task alone, it would
seem that sites are better off charging a flat-rate subscription fees using
conventional credit card transactions (or perhaps PayPal payments) instead. If and when wallet
software becomes installed widely, more interesting applications such as
one-click payments and automatic charges can be experimented with.
The Storyteller's Bowl
& The Street Performer Protocol
With the Storyteller's Bowl, an author sets a price for a piece of writing
(or other content), and asks a potential audience to pay for it. Each party
interested in eventually reading the work makes a donation towards the payment
of the value of the work as set by the author. When the price is met, the work
is made freely available online.
The Storyteller's Bowl preempts issues with unauthorized distribution
("piracy") by getting payment up front. The incentives for creating illegal
copies -- both avoiding payment and because downloading is often more more
convenient -- is greatly reduced, since it is easier to simply visit the
author's web site. The access problems of the pay-per-view model are also
diminished, since (assuming the initial price is met) the work becomes freely
accessible, and thus easy to link to.
In theory, the Storyteller's Bowl payment model encourages a system of
patronage that better reflects the incongruous financial capacities within a
given audience (e.g. one rich patron could support an author with a very small
proportion of their income, or whereas a student could contribute a much smaller
-- but still proportional -- amount).
There is a flat cost to distribution of text over the internet, rather than a
per-unit cost for production and distribution (as with books, newspapers, and
other print media). It makes sense, then, to take the economic focus off of the
tangible product and draw attention to the fact that payment goes to support the
writer. The reader isn't buying a product, but directly supporting the practice
of a craft.
Somewhat problematically, paying for writing, music or art has become
product-oriented enough that the only metaphor we have for supporting artists
through voluntary contributions is the street performer, who gets a small
donations from some listeners. In the interests of building an online social
environment friendly to artists, the metaphor of the patron could be partially
resurrected, albeit in a distributed (many people support an artist's work) and
less dependence-creating fashion.
The Storyteller's Bowl model will likely work better for authors with
established reputations or a loyal audience already in place, since it is easier
to get people to pay for something up front if they know what they are getting.
However, an author could start by asking for $5, and slowly raise the price on
subsequent works as their audience grows. On the other hand, the Storyteller's
Bowl also has curiosity working in its favour (e.g., the potential reader/patron
has not yet seen the work, and might begin wondering about its contents,
creating a potential for large donations to speed the publication).
A possible variation on the Storyteller's Bowl might be to sell
pay-per-view access to a work until a set number of views are purchased, at
which point the story is released into the public domain. Such a scheme would
likely work to reverse the emphasis on the writer as economic focus, and
proportional donations (outlined above).
The minimal technology required for such a system is presently
available in various online payment systems, such as PayPal. However, such a
system is clearly not ideal, for reasons of trust. Minimally, a reputation
management system similar to that of eBay could be created for customers to
trade accounts of whether authors or publishers held up their side of the deal.
Ideally, there would be public escrow system, where a certifified third party
would verify the delivery of the article, which would be automatically made
available to the public upon donations reaching the pre-set amount; if the
desired amount was not reached in a set period of time, the reader/patrons would
get their money back.
The ease of payment would likely come into play heavily with large
audiences, as people are much more likely to chip in 50 cents if it doesn't take
any time. Until the technology improves, the Storyteller's Bowl would seem to be
better suited to smaller, more focused audiences who are willing to give larger
Tipping & Pledge
Enabling voluntary transmission of small amounts of money from readers to a
writer is easy to set up, using services such as PayPal or Amazon Honor System,
among others: all it takes is a link to a relatively easy to set up page on such
a service, where a reader can transfer a few dollars to a writer.
Getting people to follow through with payment is trickier. Even on sites with
a loyal and appreciative audience, a request for donations that leaves it up to
the reader whether to donate or not, and why, is not likely to yield a
substantial response; at best, such a scheme would pay for hosting costs. There
are, however, a few different ways to compel readers to contribute to a site
without the standard method of payment-for-access.
Most easily, one can make it clear that donations are needed for a site's
continued life, perhaps by placing a short message at the bottom of each page:
"Did you enjoy this article? Please help us continue
to provide quality writing by donating a small sum to help defray our hosting
costs and compensate our huge time commitment to this public, ad-free site."
This and other ways of identifying exactly how the money will be used can
increase the reader's confidence that her money will benefit her directly by
giving the people who create the work more time to do what they do, not just
line their pockets.
In this vein, providing details about a future project that needs funding
could result in a large number of donations, if visitors are interested in
seeing what comes of the given project. A message on the front page reading:
"We here at the starving writer's collective would
like to work on project X for the next week, but to do that, we need $500 for
groceries and rent. Once we have it, whether from donations or from working
overtime at our day jobs, we'll start work on project X. Click here to donate,
and to see how much we have raised so far."could
concievably bring in funds in a short period of time, given an interested and
large audience. This model essentially amounts to an informal version of the
Storyteller's Bowl, with the chief difference being that the Storyteller's Bowl
model is better suited to a previously completed, specific end result (e.g. an
e-book, an issue of a magazine, a long article, a song etc.), whereas goal-based
soliciting of donations is geared towards sites that update regularly, but need
funds to keep updates coming.
A successful request for popular funding can be found in the Blogger Server Fund. Blogger,
a free service for updating web sites, needed $10,000 to buy server hardware in
order to keep up with the flood of new users. They requested that users
contribute a few dollars to the Server Fund with PayPal. In
the space of a week, donations from blogger users had accumulated over $11,000.
Though Blogger.com only asked for donations for server hardware, there is no
reason that an organization providing a free service could not attempt to pay
their staff a salary through donations as well. If $10,000 can be raised in a
week for a service that people value, why couldn't $30,000 be raised over a year
to pay someone to write and research for an interesting content site full time?
More along those lines, the Freenet Project raised $3500, with
which they plan to buy a new server, and pay for the living expenses of one of
their developers for a summer.
Equipment and sundry supplies can be put on a "wishlist" (a service provided
by many online retailers), which lets reader/patrons purchase specific items
that will benefit an organization. For example, office supplies, more ram, or a
new digital camera for quality independent coverage of an event.
Getting readers involved financially can be facilitated by providing a degree
of transparency. For example, putting the budget for a site online (example: freenet) and
keeping it updated, while recognizing any major contributions. Providing
specific goals towards which funds can be contributed, and demonstrating how
funds make a difference is extra work, but can be worthwhile if one wants to
raise funds, and has a large or dedicated audience.
When asking for funds, especially substantial amounts, trust is always an
important element. For this reason, asking for "tips", or fundraising is done
most effectively on sites that update regularly, and less so on isolated pages
or resources. Additionally, sites with a consistant group of repeat visitors
(rather than a large amount of traffic from one-time visitors) who value the
site, or (better yet) rely on it will have an easier time soliciting financial
The technology required for voluntary payments is easy to set up; the
challenges lie in integrating donations into the daily operation of the site
such that donating funds becomes a part of visiting the site; this has more to
do with customized design, encouragement, justification, and frequent updating
than with technological infrastructure.
Voluntary payments of flexible size directed towards specific, illustrated
goals portend some exciting possibilities for sustaining independent websites of
a small but substantial constitution. In other words, such a model could support
sites, services, or organizations that are too small to have a full-time staff,
but too labour or equipment intensive to be completely free of financial burden.
Serialization refers to sequential release of a work in parts. For example,
releasing one song per week until a full album was available, or releasing one
chapter of a book at a time are examples of serial publication.
First of all, serialization can be adapted as a variant of the Storyteller's
Bowl, in that one could ask readers to pay for a given part before the next part
is released. The most prominant example of this model is Stephen King's exercise
in internet publishing: the release of an e-book, The Plant in six
installments. Downloads of the text were free, with the caveat that if 75% of
the downloaders didn't pay, the next installment would not be released. $600,000
in payments were collected from the first six installments.
Writers or artists who lack King's popularity could also benefit from such a
system, though perhaps with lower expectations. For example, one could ask that
15% of readers pay for a work, or set a specific dollar amount that had to be
paid, either by many small donations, or one big one, before the next part is
released. Or both: one could specify that either a flat rate or a percentage
must be fulfilled, either by putting a cap on what needed to be paid for the
work, or setting a minimum price.
Of the payment models described here, serialization has the most significant
potential to change the structure of the work itself. For example, many
television serials start a new theme at the end of each episode in order to
spark interest in the coming episode. It is in the financial interest of anyone
using the serial format to maximize the reader/viewer's curiosity towards the
next coming part. If not kept in check, this can create an incentive towards
choppy, content-free episodes, possibly degrading the content.
Serialization is more appropriate for content that is easily chopped into
multiple individually compelling parts, such as episodic storytelling.
Serialization can be a compelling way for lesser-known artists and writers to
use the Storyteller's Bowl model to get paid for their work, provided an
audience gets "sucked in" by the first episodes. By contrast, writers with
established audiences or reputations might be better served by the Storyteller's
Subscriptions & Shareware
Subscriptions can be voluntary or required, and are well suited to sites that
provide relatively frequent updates, and have a solid number of repeat visitors.
Subscribing can be encouraged by noting, in the manner of shareware programs,
that "if you visit this site more than twice weekly, please consider
contributing a suggested donation of $24/year, or $2/month". Additionally, one
can offer extra features to paid subscribers, such as access to a discussion
group where artists or writers participate, selected "premium" content, or offer
them knickknacks, in the form of stickers, t-shirts, a site archive on CD, or a
printed version of the site.
Getting people to pay for subscriptions has some useful parallels with
getting people to pay for software. Shareware programs almost universally remind
the user who hasn't paid that they should. In addition, some shareware programs
"cripple" themselves by not enabling all features or creating annoying pop-up
windows that make the user wait before doing any work until a registration fee
is paid. In the same sense, web sites can cripple themselves by providing access
to certain articles exclusively to those who pay the subscription fee, and offer
benefits to subscribers as outlined above though.
A model that requires a reader to subscribe prior to accessing the site is
also possible; however, restricting the ability to link to individual articles
depresses the word-of-mouth sharing of links, and encourages the illicit
distribution of content (as opposed to linking to it). A shareware model as
applied to an online magazine might provide access to the first half of every
story on the site, but keep the second half of each article hidden for
non-subscribers. This enables readers to direct others to the work, and gives
new visitors a look at the content that is substantial enough to help them
decide if they want to pay, but incomplete enough that they are compelled to pay
to read it completely. (example: salon.com
A similar model could work for individual works. The first 3/4 of a book
could be distributed freely, with the last few chapters provided to those who
send in the requested sum. Those who make a larger donation could get a special
printed, hand-bound edition (for example). The first 2/3 of every song on an
album could be made freely available, with full versions available for a fee,
and a CD and cover art for those who send large donations.
Subscription models, especially if subscription is voluntary, favour sites
with loyal audiences who frequently return. Thus, sites who facilitate this by
building a relationship with their readers will quite possibly be rewarded.
Examples of involving readers include offering facilitated discussion forums or
events, mailing lists (for reminders and discussion), and solicitation of story
ideas, polls, etc.
As with the other models, it is worthwhile to clearly illustrate how the
money is being used, and more importantly, how it is making a difference.
Sponsorship is a potentially lucrative possibility for sites with
well-defined audiences, and possibly an alternative to advertising. Sponsorship
could consist of placing a line of text at the top of an article or section
saying "sponsored by..".
However, instead of having set prices and soliciting sponsorships directly, a
number of independent sites or newsletters could collectively put together a
page that pointed to auctions for various sections of their sites, where
potential advertisers could bid for having their name linked from the top of a
site or section for the next year, for example.
The issue of pricing is important to keep in mind. Since distribution happens
directly, it makes little sense to charge $16.95 for an album, or $26.99 for a
book. If anything, using the world of tangible products as an analogue will only
result in fewer readers paying. Since cost of distribution (except perhaps in
the cases of streaming video or digital music) is very small for the most part,
one needs to focus on what exactly is being paid for.
Since a significantly larger portion of the cost of intellectual property
distributed and paid for online goes to the creator, parts and labour (so to
speak) become the major considerations. If distribution costs become negligible,
then the audience can also be taken into consideration. A subscription to a web
magazine, for example, could charge $5/year for students, $30 for people with
money, and $100 for employees of large corporations.
As payments get smaller, the amount of effort required to complete them
becomes a more worthy consideration. In principle, the more time it takes to
complete a payment, the less often it should have to be completed. When one
considers the amount of time it takes to transfer money over the web (a few
minutes, not counting signing up for the service), this means that subscription
models are (for now) the most appealing, since one could concievably only have
to pay once per year, or with a credit card, just once. In any case, the time
required to pay makes charging for access on a per-article basis essentially
ineffective, if not actively discouraging to potential readers/viewers.