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On Micropayments, The Internet, and Ass-Originating Flying Monkeys.

By Defect in Op-Ed
Fri Jun 22, 2001 at 02:45:09 PM EST
Tags: Internet (all tags)

As some might recall Scott McCloud's earlier micropayments strip for which K5 had an mlp. Since then he's written another, and, some would say, more importantly, it spurred commentary from Tycho and Gabe in the form of another comic.

Micropayments are certainly a great idea, as were banners, but, as with all things, when the wrong person gets an, otherwise right, idea in their head, then, without fail, it transmits like a virus of idiocy to every half-baked twit in the world.

While banners were an obvious and reasonable solution to moneymaking (and advertising) on the web, soon enough the idea got out of control. All of a sudden you have a marketing genius thinking "If our ads cause viewers' eyes to bleed and boil away, then the last image in their mind will be of our product..." Then of course, when they realize that customers without eyes aren't as likely to buy their products as they thought, comes the obvious transition to "Hey, here's an ever better idea, why don't we just have more ads than content!" I'm not making this up.

Many people have already given up (or are trying to give up) the banner approach, whether it's because no one gets paid, or because people don't like their site marred with ads the size of half a planet. Some sites have tried to go the donation route, but most have started to feel the pains after the initial donation surge dies down. So now what? Micropayments? It's not so unfeasible to consider paying a little here and there for some worthwhile content, many have already done nearly the equivalent by donating to sites such as Penny Arcade and Icebox.com (which just recently reopened after closing partially due to money problems). It's far more distressing thinking about when the general, everyday morons get ahold of the concept.

For a lot of people, the internet is the modern TV, with people browsing web pages because they get bored. They thrive off of various web logs which offer new, and (sometimes...) exciting ways to scare off boredom for a few more seconds. I, personally, am an internet olympian. I can tear through half the internet in ten minutes when i'm bored. Now what the hell am I going to do if micropayments are implemented here and there, or christ, everywhere? Scott McCloud was making reference to micropayments for such things as web comics, but as soon as an executive of some big site gets wind of it being successful somewhere, it'll be implemented, as quick as cold molasses isn't. Every site will be getting micro-payed, but as my bookmarks fill up soon enough i'm micro-broke living in a cardboard box getting my own micropayments in dirty, styrofoam, coffee cup. And i am fairly sure the cashier at McDonald's isn't going to believe micropayments are the way of the future as i try to buy fry-by-fry with coffee-stained dimes.

As banner's are getting more and more obstrusive and less and less reliable, it makes sense to evolve, but paying for every site i want to be a part of is absurd. I can rationalize donating a little bit to some sites (or purchasing products from others), and i don't have problems doling out a little bit more to sites i spend more time on, but i'm going to have issues as more sites adopt the pay-for-content method of existence. Free "teaser" sections are for porn sites, not pc game sites.

There were over a dozen unique links (with content) in this single article, imagine how many sites you go to regularly every month, and imagine subscribing via micropayments to each of them. The concept is fine, but the widespread adoption of the concept is what will turn you into a blithering crackhead on the side of the street rambling on about how "back before micropayments I was a rich IT professional."

Just another way to Get Rich Now. If micropayments do happen to honestly be the way of the future, then please refer to the third item in the title.


Voxel dot net
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Related Links
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o another
o Tycho and Gabe
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On Micropayments, The Internet, and Ass-Originating Flying Monkeys. | 90 comments (86 topical, 4 editorial, 0 hidden)
ah irony (3.00 / 5) (#1)
by cetan on Fri Jun 22, 2001 at 12:24:00 PM EST


The irony of the Amazon.com payment system on the bottom of that page is far too much.

===== cetan www.cetan.com =====
duh. (4.00 / 4) (#2)
by majcher on Fri Jun 22, 2001 at 12:32:37 PM EST

If you'd bother to read the attached story, instead of just looking at the pretty pictures and feeling smug, you would find this:

"Yes, we have facsimiles of these that operate now (you can see them on the left), but they are not elegant, they incur significant charges, and they are not available to many, many readers because, for whatever reason, they are not able to perform credit transactions."

If you were familiar with Penny Arcade at all, you would know that irony is not a new concept for the boys. I hear they actually have coffee with irony two or three times a week. At Starbucks.

Wrestling pigs since 1988!
[ Parent ]
you said I am smug, not me. (1.00 / 2) (#5)
by cetan on Fri Jun 22, 2001 at 12:47:25 PM EST

You can read anything you want into my comments, I can't stop that.

Of course you'd be wrong and I can point that out here.

Which I've done.

Thank you, come again.
===== cetan www.cetan.com =====
[ Parent ]
aye, but it's a donation (3.75 / 4) (#3)
by Defect on Fri Jun 22, 2001 at 12:38:48 PM EST

Donating if you feel charitable is different than essentially creating a pay-site, or offering only, say, one comic every two weeks for the people who don't pay and all of them for those who do. I've donated to PA because i've been reading them for well over a year and a half now and wanted some way to thank them.

Any site can have an amazon or paypal account linked to it, but it doesn't mean they get anything from it. You can donate at will, depending on whether you care to or not, micropayments would remove that, by selling the sites content. Which i don't have a problem with, on it's own and in select circumstances, but i'm willing to bet people will try to force you into paying for more and more of their sites with "micropayments" when that content is of no quality to be sold, and normally would have been free under other circumstances.
defect - jso - joseth || a link
[ Parent ]
aye, but it's still irony :) (1.33 / 3) (#6)
by cetan on Fri Jun 22, 2001 at 12:54:29 PM EST

I do understand the difference between Micropayments and Donations, but I think the irony is still funny.

I think it's important to push ahead with Micropayments...because the alternatives are too scary.
===== cetan www.cetan.com =====
[ Parent ]
They do that alot... (3.50 / 2) (#4)
by Hillgiant on Fri Jun 22, 2001 at 12:42:27 PM EST

Back when it was obvious that the banner ad hey-day was comming to a crashing end, they put this bit up. I imagine Tycho will have choice words for whatever replaces micropayments.

"It is impossible to say what I mean." -johnny
[ Parent ]

A potential payment model (4.20 / 10) (#7)
by ucblockhead on Fri Jun 22, 2001 at 12:59:41 PM EST

One potential payment model that could work:

There's a single payment company. Call it the "Blockhead Payment Company". You pay it a monthly flat fee. ($30? $50?). The "Blockhead Payment Company" has deals with various member sites in the "Blockhead Payment Network". In order to visit one of these sites, you have to be a member of the network, paying the flat fee. The payment network then tracks which of the member sites you visit. It then parcels out all but 10% of the monthly flat fee to the member sites you visited, proportional to how often you visit them.

The advantages over strict micropayments:

  • The user doesn't have to worry about, or manage them. He pays a simple, flat fee and and gets no unexpected bills.
  • The member sites get paid according to their usage, and they don't have to worry much about putting payment systems in place.
  • The payment network gets a nice, flat revenue stream.

How useful this is to a user depends on how many sites are on the network. The more sites, the better the value. This means that the hard part is getting such a system started. Once started, it should quickly become as ubiquitous as visa or mastercard.

The only real downside is that the flat fee means that obsessive users will get more bang for their buck over casual users. There are ways to deal with that, depending on how much of a problem it is.
This is k5. We're all tools - duxup

Seems the #0PH industry is ahead again (4.66 / 6) (#8)
by Highlander on Fri Jun 22, 2001 at 01:05:09 PM EST

Sex sites have this model already.

Moderation in moderation is a good thing.
[ Parent ]
Yup (4.25 / 4) (#20)
by ucblockhead on Fri Jun 22, 2001 at 02:58:52 PM EST

Though from a user's perspective, it would be better if these networks didn't deal with just a single type of site.
This is k5. We're all tools - duxup
[ Parent ]
Gee, that sounds kinda like... (4.16 / 6) (#9)
by WinPimp2K on Fri Jun 22, 2001 at 01:16:03 PM EST


Or another organization you may be familiar with RIAA (which doesn't actually dirty its hands with money as ASCAP does), but merely works to make sure that the cartel members it represents get all the money they want. How long after the creation of Blockhead Payment Company is it before BPC starts:

  • charging a very significant startup fee for them to handle your business (to be deducted from your revenue stream of course)
  • demanding ownership of your copyrights in exchange for listing you - because not all websites generate enough revenue to offset their significant startup costs.
  • determining that only their trained monkeys (ahem I mean accountants) are capable of correctly calculating when their "overhead" has been covered and that it is time to actually start paying you?
  • you discover that they have mirrored your content on another site in another country and are keeping all the revenues from that site?
  • when you try to start a new site with new content you discover that you are blacklisted and nobody will allow you to collect micropayments because you still owe BPC for their "significant startup costs" on your prior works?

[ Parent ]
Monopolies (3.33 / 3) (#18)
by ucblockhead on Fri Jun 22, 2001 at 02:57:17 PM EST

Ideally, you'd pass laws that block these payment networks from forming monopolies, so that a site could contract with ten different networks, and a user could choose between different networks with different mixes of sites.
This is k5. We're all tools - duxup
[ Parent ]
Of course! (3.00 / 3) (#26)
by WinPimp2K on Fri Jun 22, 2001 at 03:46:09 PM EST

I can see it now....

The (wait for it..)


Why bother with an actual monopoly when you can form an association (cartel) to do the same thing?

Cheap shots aside, I agree with the idea of a voluntary micropayment system. It needs to be a one-click option, but an option. If I could simply click on a little graphic and do a five or ten cent payment without further effort, I'd do it.(several times a week for K5, less often for other sites like Penny Arcade) Of course, this opens up a market for some browser side monitoring software to let me now how much I'm spending - just in case some ethically challenged content provider finds a way to save me the trouble of making that single click...

[ Parent ]

Cartels (3.00 / 1) (#39)
by ucblockhead on Fri Jun 22, 2001 at 04:52:54 PM EST

Obviously such cartels should be illegal, though knowing our wonderful government...

But making it an option would be up to websites, and shouldn't be that hard to implement. For such a system to work, the site would have to have some sort of password security. It would just be a matter of deciding what to do when users have no password. One can imagine two sites, one with ads, one without. It would be separate from the network, which wouldn't care.

Your last point is why it really needs to be a flat fee, not a per-use micropayment. With a flat fee, your paying $30 bucks a month no matter what. The monitoring would just be to decide how the $30 - 10% gets divvied up. So while the payment network could get cheated, the user couldn't be. The payment network should have the legal infrastructure to investigate this.

This is k5. We're all tools - duxup
[ Parent ]

Eh? (5.00 / 1) (#45)
by dice on Fri Jun 22, 2001 at 08:26:57 PM EST

"Obviously" is very sloppy logic.

[ Parent ]
That's all the world needs: (none / 0) (#86)
by DaBunny on Wed Jun 27, 2001 at 12:30:13 PM EST

Micropayments & Flaming Cheese!

[ Parent ]
Hey, that's great! (3.50 / 4) (#12)
by Jive Billy on Fri Jun 22, 2001 at 01:44:13 PM EST

Then the big "Blockhead Payment Company" will have this great database of all the sites you visted and how often you visited them. Maybe even have references to articles you read (if micropayments eventually boil down to individual articles).

Just think of the advertising possibilities!


[ Parent ]

Yes, and... (3.66 / 3) (#17)
by ucblockhead on Fri Jun 22, 2001 at 02:50:46 PM EST

Yes, and Visa has a record of everything you purchased over the last ten years...

Anyway, the way around it is to put an anonymizing step between the user and the payment network. That way, the payment network knows that someone visited site X,Y and Z, but they don't know who that someone is. It might work something like paypal. You create an "anon-o-pay" account with the payment service, and use that to pay the payment network with. As long as the payment service were barred from sharing data with the payment network, you'd have a fair amount of privacy. Not perfect, but as good as today.
This is k5. We're all tools - duxup
[ Parent ]

What about non-network sites? (4.00 / 4) (#24)
by Daemosthenes on Fri Jun 22, 2001 at 03:45:06 PM EST

It sounds great, having a network. In fact, comparisons could be drawn between your model and some sort of television network. Users can flip the channels to access a different palette of shows (sites), no one network would have a monopoly, etc. Although there are limitations in the allegory, it does hold up to a point.

Taking this into consideration, I begin to worry about the fate of "non-network" sites. Sure, they will be free, but I fear that they will go the way of public access/PBS etc; people will only see the sites that are established enough to join the network, and won't see any new things. Perhaps it will turn into a model much like it is now on TV. A designer with an idea will pitch his new website to the company, and the site will be put up at their approval. So, we'll gradually see a dying off of the diversity of the web, with sites offering multiple viewpoints being replaced by those offering the single homogenized view of the networks.

Now keep in mind, I'm not sure whether my doom-saying would even happen, but it's an important thing to think about if some model such as yours were ever implemented.

[ Parent ]
Network (2.66 / 3) (#35)
by ucblockhead on Fri Jun 22, 2001 at 04:45:15 PM EST

It is important to understand that this is a payment network, not a viewership network. The correct analogy isn't a television network but a credit card network. The fact that some establishments take visa, for instance, does not make it harder for other people to provide the same service for free. (How they make their money is, of course, their problem.)

The distinction is important because there's no reason why sites would have content restricted by "the network". Restaurants aren't told by visa what to serve. Visa doesn't give a damn. In addition, being on a network doesn't mean you can't be on another, just like you can take visa and amex. (Of course, this assumes that regulators are on their toes, which they aren't in the credit card industry.)
This is k5. We're all tools - duxup
[ Parent ]

A solution for Napster too, anonymous fee-sharing (5.00 / 1) (#49)
by isdnip on Fri Jun 22, 2001 at 10:39:27 PM EST

I like the general idea of paying a fixed fee which is divided among content creators (web sites, musicians, whatever) but appreciate the comment that Big Payment Company could now know ALL about your web surfing. But it needn't be thus.

Specifically, every subscriber to this service will pay a fixed monthly fee, which grants access to member site content. This works for a Napster as well as for web sites. Let the service track the number of hits that each song/web page/whatever gets. NOT WHO hits them, but raw numbers. Now take all of the pooled subscription money (minus overhead) and divide it proportionately to total audited hits. The price per hit will vary slightly with the relative number of subscribers and their usage, but it will still divide the money fairly, and the end user will have no per-unit payments to worry about.

Yeah, I'd pay $5/month to Napster, and maybe to a banner-free web site consortium. But it has to be fixed fee and anonymous. I think it's technically possible.

[ Parent ]
Sounds like a working P4P (none / 0) (#59)
by fluffy grue on Sat Jun 23, 2001 at 01:43:25 PM EST

That setup sounds a lot like the Payback For Playback mechanism used at mp3.com, only it actually gets the money from the right place (the consumers, not the producers).

Doing the actual access control might be somewhat tricky though. I'd think that a better setup would be more like the NPR/PBS model; everyone has access to the content, and people can opt in to subscribing (out of the kindness of their hearts etc.) and then there's just a webbug-type image on every network member page. Though that'd be open to abuse for the network members; they could easily put a Metric Fuckload of these webbug images on a single page. There'd have to be something like a one hit per user per [time interval] limit or something to prevent that. That way it'd be harder for the member sites to boost their revenue by increasing the number of pageviews, as well.

There's always the problem of then needing to either rely on the stuff in the webbug's query string (which would make it easy to, say, post a webbug link on somethingawful.com) or rely on the referer (which is just broken behavior).

Still, I think that such a business model could work pretty well...
"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]
[ Parent ]

Nice idea, some issues however (none / 0) (#65)
by vastor on Sat Jun 23, 2001 at 09:52:33 PM EST

As someone pointed out, this has been around for some time for adult sites (though my understanding was that they normally paid based on getting people to sign up from the adult site rather than just visiting it).

One solution to encouraging non-monopoly solutions is to have sharing arrangements such as happens with time share, the different companies have exchange agreements so people in other time share arrangements can use their hotels and vice-versa, presumably with some kind of payment between the companies to make up for any imbalances.

I'd expect a monthly fee to be more like $2-3/month than $30. If the Australian Broadcasting Corporation can function on 8c/day/citizen (no idea if this is still accurate), then web based sites ought to be able to do likewise. Especially if it is part of a combination (like kuro5hin gets its free hosting from sponsorship, so the money raised from micropayments wouldn't need to cover that part of costs).

I'm not sure what the best division of payment should be. Having a single monthly communication would make for much less infrastructure type issues (ie. you visit kuro5hin as a blockhead member, it verifies you against blockhead and then that lasts a month. If still visiting kuro5hin a month later, it does it again). Such a system makes for a very inaccurate distribution of funds - so if slashdot had a similar system, it would get the same payment from someone visiting it once a week for 2 minutes as kuro5hin got from the same person visiting it daily for half an hour.

Dividing it up based upon raw hits/downloads is tricky as it makes it hard to draw comparisons between different types of content and sites could create extra pages to get higher hit counts (using 3 pages where they currently use 1 to display an article, like many do now to show more banner ads).

Time is tricky as well, as it might take someone 5 minutes to download an mp3 from the site but they might listen to it for hours while another person might spend an hour pottering around on kuro5hin and so go down as having spent 12 times as much time on the 'network' while only actually spending a quarter as much time accessing the content (if they listened to the mpeg for 4hrs).

Some kind of content differential might have to be determined. Maybe different micropayments networks would specialise in different types of content and they could sort it out based upon the exchange agreements. However the inaccuracy of a month based visit would probably make for some solutions - and the user could get a list of the places they visited if they wanted to reprioritise things (so you could say Kuro5hin gets 50% rather than the 10% it'd get as been just one of ten you visited in the month).

I'm not sure why people would want anonymity, however one time use solutions would probably do the trick for them. They get issued with 20 one time use monthly logins details, but even that relies upon the Blockhead company to delete the records as claimed.

The monthly return system also provides the benefit that it encourages content providers to run in the longer term with content that brings people back. I just think per visit accounting creates a huge transaction load that may not be very beneficial and which would heighten the problems of the different type of content providers. Visiting a favourite band website for new music etc once a month is probably reasonably viable, visiting it daily would be fairly unlikely.

Perhaps you'd just let members decide a priority, Low, Normal and High, where the visits are of double proportion worth depending on the rating. So if I made Slashdot - Low, but Kuro5hin - High, then K5 would get 4 times whatever slashdot got. That might sound poor given I only ever visit the slashdot front page, but odds are that under such a system I'd not bother logging into slashdot as a blockhead member and so they'd end up getting nothing and if there were no other blockhead network sites that I visited, then kuro5hin alone would get 90% of the money I paid.

If slashdot is drawing one million people and getting 10c/month from each, then thats $100k/month, quite a sizeable amount. If they're only getting 5,000, then $500 is probably still a nice payment for a site thats run in someones spare time and most likely on a cheap DSL link and commodity hardware/software.

I'd probably rather see only 80% (or even 50%) paid out directly, with the rest (after costs etc) held over to be amassed for premier projects (funding a fully fledged movie, giving sites that are moving up the rankings steadily a boost, whatever). To be fair, it'd probably need to be limited to 10% of revenue, but it'd still make for a good fund to support larger projects.

[ Parent ]
This is going to need an authentication method (none / 0) (#68)
by wallinbl on Sat Jun 23, 2001 at 11:41:11 PM EST

Of course, you'd need some way of idenitifying yourself to make a payment. This week's Petrely column (think what you want of him) talks about the centralization of authentication planned for Microsoft.NET. We've also seen this week that MS will be pushing it's Passport authentication in Windows XP.

If we're heading in this direction, is there a viable, open (as in standards, or source) method for centralized authentication? I'm not talking about a way to log people in, but a scalable, accessible method for doing this.

[ Parent ]
Blockhead Payment Company, brought to you by MS (none / 0) (#88)
by xigxag on Sun Jul 01, 2001 at 12:23:41 AM EST

Gee. One bigass company to keep track of all your browses. Who better to do that than your friendly broswer-manufacturer, Microsoft? I think the .NET/Hailstorm initiative is meant to lead in that direction. I believe Gates and Ballmer have made it already clear they want MS to be our "information broker." And their latest moves have been toward the subscription model, which will assure them of steady revenues without actually having to pretend to do any innovating.

Problem for them is that (as another poster pointed out) AOL beat them to it.

[ Parent ]

Clay Shirky (4.72 / 11) (#10)
by ubu on Fri Jun 22, 2001 at 01:23:08 PM EST

I haven't seen anyone mention Clay Shirky's article, The Case Against Micropayments. It's not a screed, it's an articulate explanation of some rather thought-provoking lessons from the market economy. The central notion is that there is an ever-so-small overhead cost for the buyer in every transaction. That overhead consists of the time and energy necessary to make a judgment call on the relative value of the item being purchased.

This overhead is almost negligible when making most commodity purchases. It's more noticeable when making very large purchases (homes, autos), and also when making high-tech or arcane purchases like computers. But it looms unbearably large when the frequency of transactions gets very high, as is true in the special case of micropayments. The friction/heat-loss associated with having to make buying decisions many times per hour would almost certainly reduce any micropayment system's efficiency to abysmal lows (in plain English, people would hate it).


As good old software hats say - "You are in very safe hands, if you are using CVS !!!"
Please do your own thinking (4.00 / 5) (#30)
by heighting on Fri Jun 22, 2001 at 04:14:26 PM EST

Just because Clay Shirky's article is about the only coherent one in the (semi-)popular media doesn't make it right. I've posted the following elsewhere:

Mental cost

This seems to be the only argument against micropayments in the article. While the point is plausible, it is valid only for the particular *implementation* of a micropayment system described. I can easily imagine another implementation where the user would be automatically charged for pages that cost <$0.01.


It is not clear that aggregation is always the best solution; the situation is a lot subtler. Have a look at this paper. The idea is that the optimal degree of aggregation depends on the balance between marginal distribution costs and marginal production costs: Low marginal distribution costs favor disaggregation and the low marginal production costs favor aggregation.

Another point about aggregation. Odlyzko's article makes a convincing case for flat rate pricing, but in each case, flat rate pricing was only introduced *after* the market reached some sort of equilibrium or at least predictable growth. A possible interpretation is that the companies in question were greedy (short term-wise) initially, but I think it is actually about managing risk in a new and uncertain market (ie. where the 'right' prices are still unclear).

Product substitution

This is the (probably the best) reason most people give for why paid access on the web would not work. Production substitution makes sense only if everyone is making a *profit*, which is not true for some genres of websites.

[ Parent ]

RFI (3.66 / 6) (#34)
by ubu on Fri Jun 22, 2001 at 04:40:40 PM EST

Just because Clay Shirky's article is about the only coherent one in the (semi-)popular media doesn't make it right.

If you'll read my posting again, you'll see that I haven't made any such claim.

Your subsequent paragraphs raise many interesting issues, but the contexts are confusing and I'm having trouble recognizing some of the buzzwords. Can you give a more thorough explanation?

Implementation: this is just too short. I can't understand what you're either critizing or proposing. Can you explain the implementation you envision in the last sentence?

Aggregation: this is sort of laughable. I don't think you meant to oversimplify, but you don't come off as saying anything worthwhile. The link to Bakos and Brynjolfsson is gratefully received, but can you explain more? As for Odlyzko's paper, I assume you mean "Internet Pricing and the History of Communications". Good starting place, and I agree with your conclusion, but given the way you introduce the topic and then drop it, there's nothing left to discuss.

Product substitution: I don't know what exactly this means in the context of internet pricing. I wish you would explain.


As good old software hats say - "You are in very safe hands, if you are using CVS !!!"
[ Parent ]
interesting... (3.00 / 4) (#33)
by Danse on Fri Jun 22, 2001 at 04:37:29 PM EST

I tend to agree with that viewpoint. I don't think that micropayments would work terribly well for the web at large. However, in certain areas they might be quite useful and popular. Online music and movies come to mind. Also certain sites that sell subscriptions for access to their content could perhaps let you buy just the particular article or content you're interested in.

There are probably several dozen other examples that would be good. Bottom line is that I don't think there is any one particular modle that will work for the web alone. Micro-payments will become just another tool to be used where appropriate. The outcome will be decided by the users. They'll decide where they like to use micropayments and where they don't. The content providers will adapt.

An honest debate between Bush and Kerry
[ Parent ]
reply (3.00 / 2) (#36)
by ubu on Fri Jun 22, 2001 at 04:46:33 PM EST

I think you're absolutely right, content-providers will discover solutions that maximize returns on the basis of their content model and according to the dynamics of their markets.

As long as government regulators don't get involved, I don't think anyone need worry about a single dominant model. Television and radio are nearly fixed-in-place media because of the federal license grants and the strict FCC regulation that maintain the status quo comfortably for owners and providers.

The Internet has the potential to become a free-market extravaganza of alternative business models through further iterations of the boom/bust cycle. All the sobbing about failed dot-coms might as well end now; a new boom is coming and a new bust will follow. All of which is exciting and beneficial, of course, because it's upon this very cycle that marketplace evolution depends.


As good old software hats say - "You are in very safe hands, if you are using CVS !!!"
[ Parent ]
Damping Use (and potential for abuse) (4.30 / 10) (#16)
by Delirium on Fri Jun 22, 2001 at 02:19:44 PM EST

The main problem I have with micropayments is that they have a psychological effect of damping use. Even if I'm only paying 1/10 of a cent per pageview or something, it still adds up rather quickly, and I'm going to be much more careful about visiting sites than I was before, in order to avoid paying for something I "don't really need to visit." I won't reload as obsessively either. =]

Really, the main problem is that when it gets to the point where you are paying for something directly, you then always have the question of whether it's worth paying for - right now I have no problem browsing lots of sites, because they're free. If I have to pay for them, I might be much more picky in what I visit (which will also make it harder for new sites to get established). Even if it's a small amount of money, it's still money, and I don't give it away for free. =]

And the more practical reason I don't think it'll catch on is that people just don't like it. Remember pay-by-the-hour internet access? Remember when the phone companies proposed switching US local service from a flat-fee to a pay-per-use system? Same sort of thing here.

And finally, the potential for abuse is rather problematic. How'd you like to accidentally stumble onto some kid's site that pops up 600 porn ads in an infinite loop, each charging you a micropayment?

pay-per use phone service (3.25 / 4) (#19)
by cetan on Fri Jun 22, 2001 at 02:57:26 PM EST

5 cents for every call under 8 miles.

It's been that way in Illinois (Illinois Bell/Ameritech/SBC) for years.

===== cetan www.cetan.com =====
[ Parent ]
hmm (3.25 / 4) (#38)
by Delirium on Fri Jun 22, 2001 at 04:51:03 PM EST

Hrm, interesting. Anyone know if this exists in any other areas of the U.S.? I guess this must've been why they tried it in my area - the phone company tried to switch to per-call billing in Northwest Indiana (the area's really a suburb of Chicago), where I used to live, but dropped the plan after strong opposition from the public.

[ Parent ]
per-call billing (3.25 / 4) (#44)
by Ludwig on Fri Jun 22, 2001 at 06:00:57 PM EST

In New York we've had per-call local rates from Ma Bell/Nynex/Bell Atlantic/Verizon for as long as I can remember. I haven't looked into alternative local phone service providers, but I'd imagine some of them offer flat-rate options the way they do for long distance.

[ Parent ]
Javascript is evil (none / 0) (#78)
by greycat on Mon Jun 25, 2001 at 10:13:31 AM EST

And finally, the potential for abuse is rather problematic. How'd you like to accidentally stumble onto some kid's site that pops up 600 porn ads in an infinite loop, each charging you a micropayment?

I'd hate that. In fact, I hate it right now and I'm not even paying money for it.

Why oh why do people enable Javascript in their browsers? It gives you nothing. Just turn if off! If you use a site that uses Javascript to open things, then either read the page source and type in the new URL, or complain to the page's author, or don't use the page.

Honestly, between the popup problem and the neverending string of Netscape 4.x Javascript exploits, I can't think of any good reason to run Javascript. Ever.

[ Parent ]
What do you sell ? People or content ? (3.00 / 6) (#21)
by jneves on Fri Jun 22, 2001 at 03:03:47 PM EST

My problem with advertising is what will happen to most Internet sites. For example, TV stations know that there business is selling people to their clients. TV station client is the advertising industry.

The result is "trash tv", programs that are done not to please people, but to keep people glued to the TV, so the advertisers are happy. For me micropayments is a possible solution to avoid selling people and start selling content based on how much it interests people. I've seen too many sites that I considered useful going down while sites like MSN grown based on Microsoft making it the default site for IE.

Perceived payment (3.55 / 9) (#22)
by argent on Fri Jun 22, 2001 at 03:16:02 PM EST

The only trouble I have with this whole "Micropayment" idea, (besides it being the latest annoying buzzword of the day) is I already am making a "perceived payment" for the internet whenever I pay my monthly ISP bill. I'm paying to get onto the 'net, why should I have to pay more just to view pages?
If you put it into a real world context, it would be the same as buying a TV, paying your local cable company monthly, THEN having to pay for every tv show you watch, and are STILL subjected to ads.
Two potential solutions I see are....
1) A portion of your ISP bill goes into one big pool that the Govt. hands out to websites, to help with access fees, etc.
   a) This opens a whole can of worms,
   bringing in a Govt. entity to dole out who
   can and can't have the money.
2) Rather than a subscription based service, have a twice yearly Pledge drive like on PBS. Put together pledge packages for different donation levels.
   a) People would be able to give the        amount the want to if they wanted to,     recieve some 'real world' goods for it,
   and only be subjected to it twice a year.

All in all, I think the same priciples that are applied to PBS would work in most cases for struggling internet web sites. This would be a combination of the points 1 and 2.

argent out

Is not payment enough. (3.00 / 1) (#28)
by h3lldr0p on Fri Jun 22, 2001 at 03:59:34 PM EST

Your saying that it would be like paying for tv shows after you've paid the cable bill isn't as accurate as it could be. I think it would be much more accurate to think that with your analogy, I should be able to get into a movie theater without a ticket because I've paid my taxes for the highways and streets that provide the means to get there.

Now you can pay per show as it is. The method is called "Pay-per-view" and with the TW cable I have, there are five or more channels dedicated to this. With possibly many more comming along after it.

The problem I have with the PBS model is a question of how to organize it. A PBS station is just one place that has many differnt shows. The Internet has how many sites of webcomics? And while places like Keenspot have popped up to help organize it to a small extent there will be hundres if not thousands and tens of thousands of others that are not part of that "community". How then do they get a cut of the fund raising? I like being able to pick and choose that I read, regardless of where they are hosted. And if each of them were to setup a Fund Drive, how quickly would it degenerate into nothing more than another marketing scheme or even worse, spam?

Even in victory, there is no beauty
And who calls it beautiful
Is one who delights in slaughter
[ Parent ]

Too broad a stroke there.... (3.50 / 2) (#40)
by argent on Fri Jun 22, 2001 at 04:55:09 PM EST

I disagree with you tying my cable anology to your movie theater one.
If we use your pardigm of a city and traveling within it, a micropayment (to me, at least) would be like having to pay a nickle to drive to your store, just to look around and not buy anything.
If I wanted to buy something once I have arrived there, I'm free to do so, but I shouldn't have to pay a cover charge to get in the door.

The PBS idea wouldn't have to be organized through out the web for it to be effective. It could be done by each website, and you could decide who to support, and who not to. And no, there's no way to stop it from decending into a spam maelstorm, but I think the grass roots support a pledge drive would need to work effectively would stop that from happening.

cd /pub more Beer
[ Parent ]
Micropayments not for merchandise (none / 0) (#50)
by vectro on Sat Jun 23, 2001 at 12:27:23 AM EST

I don't think anyone is suggesting that you should have to pay a micropayment to get into an online store. The micropayments would be for content, like webcomics, music, or text.

Sorry, but the movie theatre analogy really does work better than the store one.

“The problem with that definition is just that it's bullshit.” -- localroger
[ Parent ]
Micropayments are only for the poor? (none / 0) (#55)
by argent on Sat Jun 23, 2001 at 09:36:32 AM EST

So what would keep Amazon from deciding to charge me a micropayment subscription fee to use their online store? Do they qualify as poor seeing as they have yet to turn a profit? Where would the line for who gets to use micropayments start? .Org sites? Would you have to be below $N amount of capital before you woulld be able to use micropayments?
Nope, there's nothing to stop anyone from using the micropayment subscription format to start charging for their site.
So, while you may disagree with the store analogy, It would become true in time if Micropayments gain headway.
cd /pub more Beer
[ Parent ]
Not rich vs. poor; content vs. merchandise (4.00 / 1) (#56)
by vectro on Sat Jun 23, 2001 at 11:58:40 AM EST

Running a store where you sell merchandise (e.g. Amazon) is a different business than trying to sell content. You seem to be getting them confused. There are stores that charge a subscription fee - Price/Costco, for example. But those are by far the exception. Nonetheless, I don't see the problem with a store that wants to do this. They just need to ensure that the money they will get from the subscription fee exceeds the money they would have gotten from the sales they lose as a result. So the point here is that micropayments are proposed as a solution for how to make money selling content - whether you're a starving comic artist, Steven King, or the Wall Street Journal. They're not a silver bullet to make any web site more profitable, and it's not appropriate to sites which aren't selling content - amazon.com being one of them.

“The problem with that definition is just that it's bullshit.” -- localroger
[ Parent ]
Your cable analogy falls a bit short (2.66 / 3) (#29)
by WinPimp2K on Fri Jun 22, 2001 at 04:02:14 PM EST

You forgot the Don King Personal Enrichment Plan (aka Pay Per View) which you participate in until you have already bought the TV, and paid for regular cable service.

And the TV programs that you do get to watch for "free" are paid for by advertisers (and no smartass comments about PVRs - the business model used by the networks and cable companies predates Tivo) A micropayment system that gets you ad-free content (espcially if intersital advertising catches on) could be a good thing.

Think of it like your old fashioned phone service. you pay a monthly fee for access to the phone system, but you still have to pay more just to call people in other cities or countries.

[ Parent ]

The tv anology... (2.00 / 2) (#37)
by argent on Fri Jun 22, 2001 at 04:47:06 PM EST

Yes, I'm well aware of PPV. And those still do fit into the tv / cable anology that I used before. I realize that by paying a monthly access fee to the cable company, That does not entitle me to everything. The same for subscription web sites. If want access to something extra, I have to pay for it. One time payment, voluntarily scaled by me. Not half a cent a click as I go traversing across the web.
Also, intersital advertising is on the upswing. I use Gamespy arcade for finding CS games, and it pops up an ad when you exit a server and come back to it. (Which is kindly disabled if you register it)


cd /pub more Beer
[ Parent ]
Hey it sounds like we agree on the important bit (5.00 / 1) (#63)
by WinPimp2K on Sat Jun 23, 2001 at 04:41:53 PM EST

We get to decide when to pay, as opposed to being automagically nailed simply for pointing our browser at a site or particular page.

[ Parent ]
Exact-a-mundo! (none / 0) (#64)
by argent on Sat Jun 23, 2001 at 05:52:50 PM EST

And that is exactly what micropayments will devolve into. You will end up paying for every click you follow.
And like someone else pointed out, how long till someone hacks together a site, that when you visit it, it pop's up about 50 jillion small windows, each costing you a half cent apeice?
cd /pub more Beer
[ Parent ]
Payment Protocol (4.00 / 2) (#67)
by jck2000 on Sat Jun 23, 2001 at 10:26:32 PM EST

I would hope that the protocol would be: (i) click on a link, (ii) box pops up indicating that a payment is required, (iii) user decides whether to authorize payment or just not view the link. This issue (among many others) points out the importance of open source browser efforts like Mozilla and Konqueror, which can ensure that the protocol gets implemented this way, rather than the way you describe.

Micropayments don't bother me much -- I do not think it is unreasonable to pay money for content that is valuable or enjoyable. I read 3 newspapers a day and probably 10 magazines a month. Depending on how prevalent it becomes, it could make the online experience annoying, as links result in decisions of whether to pay for content sight unseen.

I do not think, however, that many sites would be able to charge micropayments. A site would have to offer pretty compelling value -- like the Wall Street Journal, legal databases (Lexis, Westlaw) or "adult" content -- to be able to get away with charging. For instance, Slashdot could probably do so, and perhaps k5, but not too many other tech/culture weblogs could.

I was involved in a micropayments system project in '95-'96. At that time the Internet was not on the forefront of people's minds -- I remember that, only late in the process, was the following sentence added to the product description: "[The product] can also be used to facilitate transactions over the Internet or the Intranet [sic]." The product in question, though it never really got off the ground, was great -- it was a smartcard-based offline stored-value card, meaning the only record of the value a person held was on the card itself, and no central server had to be hit to do a transfer. Value could be transferred directly from one card to another through a calculated-sized coupling device. The product offered almost the same level of anonymity as a cash transaction. I fear that future micropayment systems will not offer the same degree of anonymity.

[ Parent ]

Shift (1.00 / 9) (#23)
by Refrag on Fri Jun 22, 2001 at 03:30:24 PM EST

Don't you like capitalizing letters? Is your shift key broken or something?


Kuro5hin: ...and culture, from the trenches

well (1.77 / 9) (#32)
by Defect on Fri Jun 22, 2001 at 04:28:54 PM EST

Since i quite clearly capitalized a good deal of the proper names and hell, if i'm not mistaken, i may have even capitalized the first word of every sentence, it can be deduced that my shift key is, in fact, working.

Now, i have a hunch your obnoxiousness is brought about by my failing to capitalize the pronoun 'i' and for that, i am sorry. At one point i made an effort to capitalize them all for irritating fuckwits such as yourself, but after that point i seem to have written some more and forgot to go through again. I'm terribly sorry, but thank you for bringing that to my attention, because it really matters a fuck.
defect - jso - joseth || a link
[ Parent ]
Micropayments etc. (3.66 / 9) (#25)
by fluffy grue on Fri Jun 22, 2001 at 03:45:31 PM EST

Wow, Scott McCloud makes a perfectly well-reasoned argument, and Gabe&Tycho counter by saying, effectively, "You're a stupid poopyhead! Nyah nyah nyah!" I have just lost a lot of respect for those guys.

McCloud wasn't saying that micropayments will magically make everything better - just that they're something which should be considered. He does a little bit of math to show that a 25 cent per month subscription to PvP would result in earning $73K/year. And all they could counter with was an ill-reasoned parody which doesn't even address McCloud's actual arguments?
"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]

And in that post... (4.00 / 5) (#27)
by smileyy on Fri Jun 22, 2001 at 03:57:45 PM EST

And in that post, you've managed to sum up the intellectual capacity of Penny Arcade.

...alone in suicide, which is deeper than death...
[ Parent ]
And by saying that... (2.16 / 6) (#42)
by baberg on Fri Jun 22, 2001 at 05:26:10 PM EST

You have just lowered yourself to that same standard.

The whole point of your parent comment is that insults and "nyah nyah nyah" are not the way to counter an argument; Your insult of PA does nothing to help the case against them.

[ Parent ]

Gabe&Tycho counter ... (3.00 / 4) (#31)
by WinPimp2K on Fri Jun 22, 2001 at 04:14:45 PM EST

First, I think they came off as being pretty damn whiney too... But

By saying - in the article, not the comic, that their actual experience with the Amazon and PayPal links that they added to replace the loss of advertising revenue does not match up with Scott McCoud's projections for financial security.

Their comic does a good job of lampooning McCloud's style. Hopefully, exposure to the real world of more conventional employment will polish some of the rougher edges off their commentary. They just aren't ready to replace Andy Rooney.

[ Parent ]

Why I don't send micropayments to PA (4.80 / 5) (#43)
by fluffy grue on Fri Jun 22, 2001 at 06:00:09 PM EST

I have, what I feel, a legitimate reason why I don't send micropayments to PA. Their strip really isn't that good. I might pay 25 cents a month if it weren't just an egomaniacal wankfest where they whine about the fact that installing the latest Tribes 2 patch broke their installation. PA used to be pretty funny, and they occasionally have a few gems, but for the most part, it's pretty boring.

I donate to other site as I see fit. I bought some of the Sluggy Freelance books, I sent $10 to truemeaningoflife.com when Seeker announced that he was having trouble paying the server bills (unfortunately, last I checked TMOL is still down, though I'm starting to get keen on Forum 3000), and I even sent $10 to Something Awful back when Rich was getting screwed over by his inability to read his contract with Gamefan. In reality, those sites were only exceptional in that they were ones I really cared about; paying 25 cents a month ($3/year) for the other sites I read regularly seems much more feasible. Unfortunately, sending a 25-cent "tip" to these authors is not only inconvenient but rather insulting if done only a month at a time.

I think that if there were an annual subscription model a'la PBS/NPR where once a year they remind you to send in your $x payment, things would work a lot better. (FWIW, I donate $30/year to the local NPR station, since I feel it's worth it to have a local station which plays jazz and classical music and Prarie Home Companion.) I rather like the model Jon Rosenberg uses on Goats, which is somewhat similar - he has a monthly donation goal thing, where if there's enough donations in any given month he'll treat the readers to more strips, bonus color strips, etc.

I think a decent model would be to have a quarterly donation period (monthly is too short, yearly is too long, but every 3 months seems about right) where the current amount remaining on the goal is in red, blinking text or on an interstitial page which comes up before you can get to the site itself (and you could only get to the site itself through an empty POST query or by putting in that day's randomly-generated username and password or the like, making it not worth peoples' time to try to get around it). The interstitial page would include a simple budgetary plan justifying the requested amount (for example, "I spend x hours on each strip which translates to $y at $z wage, and I have an average of q visits per strip").

Maybe I'll try something like that (which is roughly a better-planned Street Performer Protocol) for my next album... before releasing a song, say how much it cost me to put the previous song together and how many people downloaded it, and then also say that people who have donated a total of, say, $10 or more will get a free copy of the album itself when it's finished. Hrm.

There (hopefully) wouldn't be any expectation of me putting out new songs because of prior donations, since the donations would be requested for the purpose of putting up a song which is actually done. Maybe I'd include a low-bitrate sample or something, too.

I wonder if that kind of thing would also work to guilt-trip people into sending me money due to the fact that, even though hundreds of people have downloaded the 32/128kbps version of pointed little quill, and people are always telling me how much they liked it, I've only sold four copies on CDBaby (and only three on mp3.com), while I've had plenty of out-of-pocket expenses (not counting the time taken to do the music!) just to get the stuff up on CDBaby et al; I'm far from even breaking even on it.

I dunno, though.
"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]
[ Parent ]

Funny you should mention (none / 0) (#53)
by localroger on Sat Jun 23, 2001 at 08:44:46 AM EST

I think that if there were an annual subscription model a'la PBS/NPR where once a year they remind you to send in your $x payment, things would work a lot better.

This model is proven to be successful by the one sector of Internet commerce everyone agrees is profitable. I don't see these guys being featured on FuckedCompany any time soon.

I can haz blog!
[ Parent ]

AdultCheck (none / 0) (#57)
by fluffy grue on Sat Jun 23, 2001 at 01:28:58 PM EST

FuckedCompany, no.

GetFucked, maybe.

"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]
[ Parent ]

When users block ads.... (3.00 / 4) (#41)
by skinny irish bastard on Fri Jun 22, 2001 at 05:00:05 PM EST

Here's some food for thought: What happens when users, in masses, start blocking banner ads? Don't think it will happen? Guess again. Blocking banner ads isn't restricted to people maintaining a hosts file, there are some really good user programs out there now that will do it for you.

For example, check out AdSubtract Pro. I bought it last week, and it's absolutely amazing. It acts as a proxy server on your machine, and lets you choose whether or not to block out banner ads, animated gifs, pop-up windows, cookies, javascripts, and so forth. Even better, it lets you created a list of sites you wanted to be filtered selectively (for example, I have it setup to accept cookies from K5, but not ads...sorry guys!). It's really easy program to use (Windows only, unfortunately). They also give free ad database updates for their Pro versions (they have a free personal edition, but it's not as good).

Now, let's think for a moment here: What happens if programs like this start getting used by the masses? Could this effectively killer banner ads? If so, will micropayments really be able to make up for the lost income (just how many people would make micropayments to...oh, I don't know...Yahoo?).

What do you guys think?

Ever hear of Muffin??? (none / 0) (#47)
by chewie on Fri Jun 22, 2001 at 09:00:39 PM EST

This package was debianized by Stephane Bortzmeyer bortzmeyer@debian.org on Wed, 23 Jun 1999 14:13:13 +0200.

It was downloaded from http://muffin.doit.org

Upstream Author(s): Mark R. Boyns <boyns@doit.org>

Copyright: GPL. See /usr/share/common-licenses/GPL.
assert(expired(knowledge)); /* core dump */
[ Parent ]

Will all users block ads? (none / 0) (#52)
by trane on Sat Jun 23, 2001 at 03:52:41 AM EST

I dunno if users "in masses" will start blocking banner ads. I don't. Sometimes I click on them and even buy stuff. I also don't screen calls, and sometimes buy stuff from telemarketers. If you want to block them, fine, but a lot of people (I would venture to guess) don't really mind.

The theory is that ads can make you aware of something you didn't know exists. Or maybe they just catch you at the right time with something you've been thinking about buying but just haven't gotten around to, and so they can be convenient.

So even if you provided each user with the means to block all ads, you might find that a lot would choose to still view ads.

[ Parent ]

That isnt really much of a problem (none / 0) (#71)
by Nick Ives on Sun Jun 24, 2001 at 12:29:40 PM EST

If a user is sufficiently annoyed by ads that they install a banner blocking program to get rid of them, they are doing you a favour. It means you dont have to worry so much about pissing them off.

I recently setup a permernant gateway for my home using a computer I found (you know, when your tidying up, "wow, look, a motherboard, its still got a CPU and some RAM attached, hey, does that hard drive work??...") and I used the oppertunity to install wwwoffle & junkbuster. I must say that I really do love junkbuster, for starters I just this very second noticed that the big grey hunk of ad crap that useually sits at the top of k5 just isnt there. Theres the blue OSDN navbar then its K5 all the way, no horrid ugly gray adbar. Previously I just used to scroll right past it, my first action upon loading up any K5 page would be to flick my mousewheel to get it to scroll the page the distance required to just remove that ad banner. I had developed similar techniques for most other websites I visit regularly, so by installing junkbuster I'm really helping the advertisers get a clearer picture of who actually wants to see adverts, or at least who doesnt mind them enough to block them out. I really think that this is a strength of internet advertisements over television adverts, I mean, sure TV networks can get pretty good statistics as to who watches their shows, but can they show how many of those people make a point of leaving the room or turning over whenever the adverts come on?

In short I suppose my point is that as much as advertisers want to grab your attention, they also dont want to piss you off, although whoever thought up "punch the monkey" and that popup "you have 1 message waiting for you" are definate exceptions to that rule. People who filter ads are generally people who wouldnt respond to an advertisement anyway, so its a non-issue.

All that goes to poop when you start to look at advertisements as a means of establishing brand identity (even people who hate adverts have their subconcious tweaked by adverts), but the majority of adverts on the net that I've experienced seem to be of the form "click here now!!!", which is just utter bollox....

Or an even better "in short", if adverts wernt so shit then they wouldnt annoy so many people.

[ Parent ]

Let the ISP's be the toll collector (none / 0) (#46)
by cod on Fri Jun 22, 2001 at 08:38:09 PM EST

ISP's could offer packaged or one off subscribtions and handle the collections for the individual sites. Example - for an extra $5, Earthlink members can get full subscribtions to Kuro, /., OSDN, whatever...or a sports fan can subscribe to a package of sports sites etc. A one off subscription direct to the site might cost a lot more - the ISP's by packaging the subscriptions might be able to make more for the individual sites than they could selling one off subscribtions. And by maintaining a centralized directory that all the "network member" sites can query, it would greatly reduce the adminstrative hassle for everybody except the ISP, who would be making money on a commission or processing fee basis. Its not a perfect idea - but it might have merit.

Content wasn't always free - good BBS's usually had a subscribtion fee that got you unlimited downloads and a private number that wasn't always busy.

ISP funding the content (4.00 / 1) (#48)
by PresJPolk on Fri Jun 22, 2001 at 09:56:43 PM EST

It's already been done... see http://www.aol.com/ for more information.

[ Parent ]
Two issues. (4.00 / 1) (#51)
by Cuthalion on Sat Jun 23, 2001 at 02:32:13 AM EST

As I see it, there are two issues at hand here. One is the "success tax" - paying server and bandwidth fees, and the other is "paying for food" so that more content can get made.

A start would be eliminating the fees - which it seems can be done by switching over to a überchaching architecture like freenet.

Not having to pay for people to read your content is at least a step in the right direction - It would still be nice if there were some opportunity to get some recompence for the hundreds and hundreds of hours spent MAKING the content, but once distribution costs reach $0 and it's all profit, then donations or micropayments or anything start to look a lot more reasonable.

Of course this too not yet a reality - Freenet is not easy enough to install to be a primary distribution medium yet.

I'm not sure what all the fuss is about. (4.00 / 1) (#54)
by JazzManJim on Sat Jun 23, 2001 at 09:07:21 AM EST

Okay, so I'm surfing some of my favorite sites, and I read this online comic, or hear this tune I really like. I click on a button on the bottom of the screen and WHOOSH! Off goes a dime or a quarter to the creator. No fuss, no muss. I pay for what I want and what I like, and I can get nice hard-copies of it. It I *really* like it, I can buy a subscription to the site, to get goodies like nicely-printable stuff, or other bennies, but I don't have to. I just whoosh the dime or quarter or whatever away if I like what I see.

This doesn't seem to me to be such a big deal, nor hard to implement. The added benefit is, I don't end up paying for crap, if the author has an off-day and does something I think is garbage. Hey...it happens ("Dancin' in the Streets" - David Bowie and Mick Jagger?). It takes almost none of my time and makes surfing the Web a bit like those street festivals or "Taste of [Your City]" kind of events.

So you set up a company that ensures that the payments get to the authors. Here's the way it goes. I set up Jim's Micropayment, Inc. I have the consumers set up accounts via credit card (or ATM debit card, for goodness sake, or via check account debit - whatever) and the button takes two clicks (one to click and one to confirm - it's a popup window which doesn't remove you from the original screen you were reading). That click-payment goes from your account into the account for the author to whose page you clicked. Each month, I send the author a check for the money I've collected, less a nominal fee for my services (Let's say 10% - that's reasonable).

Now I'm happy and the authors are happy and the Web surfers can contribute to those folks whose work they love, and they'll see more of it because their authors aren't doing it on such a part-time basis and more on a full-time basis.

Oh, and trust me, you all would pay to do something like this. You know you would. :-)

"Hostility toward America is a religious duty, and we hope to be rewarded for it by God...I am confident that Muslims will be able to end the legend of the so-called superpower that is America."
(Osama bin Laden - 10 Jan 1999)
PayPal (5.00 / 1) (#58)
by fluffy grue on Sat Jun 23, 2001 at 01:32:08 PM EST

PayPal has a thing for this. Unfortunately, it hasn't caught on because, for some reason, people don't want to register for PayPal; they'd rather use something like Amazon Honor System which takes off a much larger amount and has a minimum amount of $1 (PayPal's minimum is basically 30 cents).

I think that if PayPal made a service specifically for micropayments which changes the service charge to a slightly higher flat rate (say, 5% instead of 30 cents + 2.2%), everyone will be happier.
"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]
[ Parent ]

I didn't know this! (none / 0) (#60)
by JazzManJim on Sat Jun 23, 2001 at 02:36:34 PM EST

Okay, that's cool. Maybe the reason not a lot of folks use PayPal is because it's tied so closely with eBay, as a payment method? I don't know. My experience with it is that it's reliable, easy to use, and could be well-adapted to this particular use. The one-click payment option wouldn't be hard for them to implement, and would get them a small boatload money.

"Hostility toward America is a religious duty, and we hope to be rewarded for it by God...I am confident that Muslims will be able to end the legend of the so-called superpower that is America."
(Osama bin Laden - 10 Jan 1999)
[ Parent ]
PayPal and eBay (none / 0) (#62)
by fluffy grue on Sat Jun 23, 2001 at 04:06:15 PM EST

Unfortunately, it's a pretty common misconception, but PayPal has nothing to do with eBay. In fact, eBay would like to see PayPal go under so that they could push their "Billpoint" service (one of those companies they have a "strategic partnership" with). Personally, I love PayPal, and it's too bad that Amazon Honor System gets more attention for a worse service. Amazon just has better marketing, I guess...

As far as PayPal doing "one-click" stuff, I'm glad they don't have something like that. It'd be far too easy to abuse, and one-click systems are inherently insecure. I'm very glad that PayPal requires you to enter your password and then confirm transactions. It doesn't take that long, and it means that someone can't just randomly "donate" $1000 of my money to asiansluts.com or whatever.
"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]
[ Parent ]

PayPal aint my Pal (none / 0) (#69)
by QuantumG on Sun Jun 24, 2001 at 04:19:15 AM EST

1) They seem to think everyone has a US credit card and that the address on said credit card is in the US (which that have many privacy invading ways of verifying).
2) Their system for letting you register a checking account is again, US centric, and is long and fucking annoying. Call my bank?? Why would I call my bank? I dont even think I have a number to call my bank. How much totally discretionary power does this put into your starving dot commy hands?

No, thanks. I'll wait until my BANK implements a micropayment system and around that time the first thing I'll buy is some ice skates, cause I hear it is snowing in hell.

Gun fire is the sound of freedom.
[ Parent ]
Um, you don't have to do either (4.00 / 1) (#70)
by fluffy grue on Sun Jun 24, 2001 at 12:02:39 PM EST

First of all, if you just want to send money, you don't need an address, thus you don't need a credit card. They only use the credit card for two things: address verification (which is very important for eBay vendors etc.) and for correcting overdraws on PayPal+savings/checking accounts.

Second, you don't need to call your bank to set up a checking account. I have two checking accounts on PayPal, and neither of them required me calling the bank to add them.

Third, you don't even need any third-party accounts attached to your PayPal account in order to send money. You can set up an account and then mail them a check to deposit funds. This can be done totally anonymously if you like.

In any case, how the hell is PayPal supposed to provide their service without getting your personal information? Would you really like it if any slack-jawed yokel could add your bank account to their system? The information they get from you is for your protection; the address is for the people who are selling you physical goods (just in case someone did steal your credit card info and added it to their account), and the rest is to stop other people from adding your checking/savings accounts!

Jeeze, not every Internet-based company is hell-bent on destroying your privacy and raping you for all you're worth.
"Is not a quine" is not a quine.
I have a master's degree in science!

[ Hug Your Trikuare ]
[ Parent ]

The Problem is their US-bias (none / 0) (#73)
by Jonathan on Sun Jun 24, 2001 at 03:24:37 PM EST

First, it was years before they let non-US people use PayPal at all (Hello? The Internet is *Global*) Secondly, the rings and hoops PayPal makes non-US people jump through to get an account are far more onerous than the ones for people in the US. The implication is that they think that people who don't live in the US are criminals or something. In contrast, Barnes and Noble, Amazon.com, and countless other sites I've used didn't discriminate against me just because I live in Canada.

[ Parent ]
Market Considerations (none / 0) (#76)
by keenan on Sun Jun 24, 2001 at 11:26:35 PM EST

I'm Canadian too (even went to Waterloo, in fact), and I think they're fully right for first setting up operations in the US -- they obviously can't target every market in the world because of logistics, and if they're going to try to make e-mail payments work, business sense implies that they'd try in the largest market first. Once you make it international, there are increased costs and overhead. They probably had to research trade agreements and associated financial laws of each and every country they support. At least some of the hoops that non-US residents have to jump through are probably for increased protection for their users. They also have to market their service to the residents of each country, which further incurs additional costs.

I think it's great that they now have paypal support throughout a wide number of countries, but I don't mind that they took their time doing it -- I think it's much better to research a problem before implementing it than to jump the gun and make mistakes (which could destroy the whole process due to lawsuit costs). Do you not think they wanted to increase their market as soon as it was feasible?


[ Parent ]
As usual (none / 0) (#61)
by Ape on Sat Jun 23, 2001 at 03:38:41 PM EST

As usual, everyone misses the crux of the issue here.


Any system will have to have at least these features:

1) Payment must be received BEFORE delivering the content

2) You will have to develop technology to restrict content so that it cannot be copied and redistributed to non-paying consumers.

Obviously, item #1 is doable and already exists. Obviously, item #2 is currently impossible to accomplish since it is impossible to keep people from copying bits.

[ Parent ]
Selfish society? (none / 0) (#72)
by Nick Ives on Sun Jun 24, 2001 at 12:55:00 PM EST

The idea that noone will pay if they dont have to is kinda selfish, and also the music industry's main argument against Napster. That music sales continued to rise in spite (and some might say because) of Napster's existance seems to provide a fairly compelling argument against the idea of a selfish society.

Personally, I would have a few minor problems with micropayments. For starters I dont currently have a credit card, I could get one quite easily but I really dont fancy the idea of getting into debt, which is oh so easy when you have a credit limit that is more than your earning, and as such its hard for me to spend money online. I could setup online banking, but my bank is pretty crappy and I have to fill in a load of (paper) forms to activate my online banking. To be honest I can see the security reasons for that, but they could have made it a little easier, like, for example, letting me email them to get them to send me access information for their online service.

The real crux of the issue isnt that everyone is selfish, its that everyone is lazy. I'm reminded of the term the "street performer protocol", and think that this is probably an applicable situation. I cant really remember the SPP, but if you think of all the websites you read as performers on the street then like, well, thats it I suppose. Just think how you give money (maybe a quid or two, or maybe just shrapnel) to the performers you think are particularly noteworthy. Until giving money to someone on the net is as easy as reaching into your pocket and throwing some change into a hat, I dont think micropayments will ever take off.

Oh, one final note, if you dont ever give money to street performers then this doesnt apply to you. I'm fairly sure your in the minority on that regard, as just about everyone I know has given money to a performer at least once in their life.

Just because your selfish, dont assume everyone else is.

[ Parent ]

Street Performer Protocol (4.00 / 1) (#75)
by dennis on Sun Jun 24, 2001 at 09:14:29 PM EST

The SPP, as described by Schneier, works as follows: An artist with a fan base issues a statement that he has created, or will create, a new work of art. He will release it upon receiving $X in donations. The money is deposited in an escrow account. If the artist does not release the work by a specified date, everyone gets their money back. So you combine a moneyback guarantee with an incentive to donate, and if Stephen King's bastardized version is any indication, it's a promising scenario. King actually promised to release the entire novel if his targets for the first two chapters were met, and while that incentive was in place, donations poured in. Once the criterion for full release was met, donations dropped off, suggesting that the SPP may perform better than simple donations, for popular artists. Also, the fact that King hasn't, so far, kept his side of the bargain, suggests that the escrow account would be pretty helpful, too.

[ Parent ]
Bull. (none / 0) (#74)
by dennis on Sun Jun 24, 2001 at 09:03:47 PM EST

$700,000 in donations to Stephen King proves you wrong. And that was a pretty cumbersome payment process. If I had a little button on my browser to click and donate, I'd use it plenty.

Let's just do the experiment. In one corner, put all the artists who view their fans as the enemy, lock down their bits with whatever technologies they can come up with, and charge eighteen bucks for a CD (of which about half a buck goes to the artists). In the other corner, all the artists who decide to trust their fans, release their bits for free, and ask for that half a buck directly and voluntarily. See who does better. I'm betting on the second group.

[ Parent ]

reality intrudes (none / 0) (#77)
by streetlawyer on Mon Jun 25, 2001 at 03:57:44 AM EST

I set up Jim's Micropayment, Inc. I have the consumers set up accounts via credit card (or ATM debit card, for goodness sake, or via check account debit - whatever)

Debit card transactions typically cost 50 cents to process. Thanks for playing.

Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]

Bzzt, Please Try Again (none / 0) (#79)
by Robert Uhl on Mon Jun 25, 2001 at 11:25:53 AM EST

The clearinghouse only make sone transaction per card per month--it would pull out the money spent, and then distribute it. Or it might take $50 as a start-up, and then slowly decrement it--get to $1 left (remember, we're talking micropayments, i.e. less than a penny each), and you're emailed a reminder.

[ Parent ]
Bzzt Bzzt, Double Jeopardy (none / 0) (#80)
by streetlawyer on Tue Jun 26, 2001 at 03:41:52 AM EST

What makes you think you can process transactions any cheaper than the debit card people?

Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]
Did You <em>Read</em> What I Wrote? (none / 0) (#82)
by Robert Uhl on Tue Jun 26, 2001 at 11:11:23 AM EST

I wouldn't be conducting business any cheaper than anyone else. Observe:
  1. user decides to use micropayments
  2. user transfers $50 to his account in my system
  3. transaction fee eats 50c of the above, leaving me with $49.50
  4. each site the user visits deducts 1/10th of one mille, or $0.0001, from the user's account
  5. after visiting some 494,000 micropayment pages, the user's account is at $1 and he is asked to renew

Even someone who reads 120 pages a day would be able to last for 11 years with such a system. I would make my profit by having the privilege to hold onto $49.50 from a whole lot of people for years. I could invest this money--even low-yield bonds would yield a tidy profit.

This example is obviousl contrived. In reality, different pages are likely to cost different amounts. And no-one is going to want to throw $50 into a pot (at today's dollar--in enough years, a cup of coffee will cost $50). But the example stands: only a small fraction of the customer's dollar is lost due to fees. The clearinghouse may even swallow the expense, since 50c out of $50 is only 1%, and it can make that much money back relatively quickly (e.g. via investment in a bond).

[ Parent ]

here's the problem (4.00 / 1) (#83)
by streetlawyer on Wed Jun 27, 2001 at 02:41:25 AM EST

each site the user visits deducts 1/10th of one mille, or $0.0001, from the user's account

Costlessly? This is a transaction; I don't see any reason at all to assume that it would cost any less to process it than a conventional debit.

Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]

Yep (none / 0) (#84)
by strumco on Wed Jun 27, 2001 at 06:36:13 AM EST

Costlessly? This is a transaction; I don't see any reason at all to assume that it would cost any less to process it than a conventional debit.
Such transactions can be managed a lot cheaper than the debit cards - mostly because there isn't the need to verify cards every time (that's already been done).

(I work for a company that does this - I'm not just guessing.)

[ Parent ]

do you mean "the need"? (none / 0) (#85)
by streetlawyer on Wed Jun 27, 2001 at 07:46:33 AM EST

Errrrmmm ... fair enough to say that you can do a transaction without verification, but if you do, then you're exposing the cardholder to a risk that they wouldn't otherwise be exposed to. I know a fair amount about this business myself ... in any case, the telecoms cost alone is going to be significant if you're dealing in hundredths of a basis point.

Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]
Please Re-read What I Wrote (1.00 / 1) (#87)
by Robert Uhl on Fri Jun 29, 2001 at 12:51:36 PM EST

The transaction is only taking place on my computers--I alreayd have accounts for you and the artists. At no point am I hitting anyone else's machines. Debit card houses make their money through transaction fees; I make my money by investing the money I hold in escrow (a decade's worth of transactions from each user means that I can safely invest about half of it).

[ Parent ]
hmm. (none / 0) (#89)
by istvaan on Wed Jul 11, 2001 at 03:31:49 PM EST

You know, I'm not charged anything per transaction for my debit card. I pay a fee of $1/month for my card, and that's it...

[ Parent ]
Being a web author sucks. (4.00 / 1) (#66)
by ageitgey on Sat Jun 23, 2001 at 10:00:51 PM EST

I've been running a site for a little while now. It can be a lot of fun, but don't expect to make any money. Banners are all but dead. Micropayments have too many problems. There just isn't a good model for making what you are worth as an independent. You are forced to form a "network" of sites so that you can command banner ad rates beginning to approach the levels of feeding you. Recently, I've been working on my for-fun music magazine site. In that spirit, here's my ode to web publishing (with props to the alanis morresette lyric generator):

"Will to Live"

I feel miserable
Low click thrus make me ill
I feel miserable
Bandwidth limits tear at my foundations
I feel miserable
Web hosting bills are dragging me down to the depths of misery
I want to die

Is it because of banner ads that I feel this way?
With the blue rays of misery pounding on my brain?

DoubleClick Broke My Will to Live
DoubleClick Broke My Will to Live
DoubleClick Broke My Will to Live
I was getting better but then
DoubleClick Broke My Will to Live

I feel miserable
Non-paying advertisers rot the flesh from my bones
I feel miserable
Undersold banner inventories defeat my purpose
I feel miserable
Deflated banner CPM rates are doing their best to impale my soul
I want to die

Is it because of banner ads that I feel this way?
With the blue rays of misery pounding on my brain?

DoubleClick Broke My Will to Live
DoubleClick Broke My Will to Live
Oh God, DoubleClick Broke My Will to Live
I was getting better but then
DoubleClick Broke My Will to Live

Thank you, thank you. Have a nice day.

rootnode.org - Music, Open-Source Style. Join the Resistance!

Scott McCloud's response (4.00 / 1) (#81)
by The Great Satan on Tue Jun 26, 2001 at 06:57:28 AM EST

Scott's response

I'm much more impressed by Scott McCloud's essays than by Tycho's, Gabe's, or Defect's. Scott doesn't have a magic crystal ball and may not be right about micropayments, but what he is able to do is present himself as an educated adult does.

Check out my comic at www.shizit.net/alpha. Or take care of your post hardcore music needs at www.shizit.net. Or ignore this lame self-promotional spam.
a vialbe solution (none / 0) (#90)
by engel on Thu Jul 19, 2001 at 12:54:30 PM EST

My premise is this: people WANT to pay for content, they want to have that content available, but they want to pay for it on their own terms.

For example, PBS does get a decent amount of money through telethons, but people hate getting guilted into "subscribing" in telethon season; a lot of people tune out during this period.

What if, instead, we simply made it really easy to sponsor sites that we want?

Here is the suggestion: A program sits on your computer and monitors your web traffic. You set up an account on your computer, complete with Credit Card info and what day of the month (or whatver) you would like the program to kick in. You also set a profile stating that you want to divide cash in an arbirtray way ($1.00 to go to X site, $1.25 to another etc) or by percentage (10% to here, 5% to there), or by use (distribute your money by how you surf, but only to sites that are accepting donations).

When the time comes, the program divvies up how much cash you are willing to spend (say, $20 a month), and it sends it to a central repository. The user gets notified by whatever convenient means necessary: an ICQ, an email, a popup on their computer... whatever they want.

This central repository gathers all of the the donations, does the credit card transactions, and then sends the various sites a check for their accumulation. THis is done, say, weekly. The central repository would be a non-profit and would only take as much money as needed to operate. One could say, "no one is going to do something for non-profit", but face it, non-profits exist and run a lot of our society. FSF or EFF anyone??

Theoretically, the central repository could be substituted by direct micropayments, but the way our business systems works now, it is better and easier to aggregate funds before sending them to the recipient.

OK, so this is an OPT IN system, it is not mandatory. However, it would be really easy for the user to set up and would allow payment to be in their control not someone else's. Instead of value being determined by an outside party, the user decies how much value a site is worth.

The problem with traditional payment systems is that the person creating the content is also defining what the worth to the other person is. This is almost always either too low or too high.

Could a large business sustain itself thus? No way. However this plan would encourage:
1) small content creators
2) unlimited access to the web without fear of using something that will charge you out of your control
3) an alternative economic system not based on a middleman (no syndication, etc)
4) Encourage creativity while simultaneously allowing people to live
5) Has checks and balances so that no one site or group will monopolize the money flow, as is the case in most capitalist systems.

On Micropayments, The Internet, and Ass-Originating Flying Monkeys. | 90 comments (86 topical, 4 editorial, 0 hidden)
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