Micropayments: Effective Replacement For Ads Or ?

A reader writes: "The traditional support model for content on the net is failing site by site, and with the growth of anti-advertising utilities and the collapse of financial support for risky ventures, this will accelerate in the coming months. Will this vacuum be filled in by people doing content as a hobby, or will a new support structure such as micropayments take over. This article takes a pro-Micropayment stance, and mentions a contrasting article at OpenP2P that presents an opposing opinion. Would you pay for content if the infrastructure was secure, inexpensive, and allowed the content to prosper?"

Micropayment: No, Subscription: Yes

Online content providers have skipped over a "known good" revenue generation model; that of subscription services. I won't participate as a consumer in micropayment systems. Its too risky. I can't afford to pay $0.05 several hundred, or thousand times a month for content whose value is only known after I've paid. Refund systems layered on top of micropayment just waste my time.

I feel subscriptions are well worth my money. If I find an online resource that has a mandate and reputation for delivering detailed, accurate information with a specific focus, I'd be happy to pay a larger sum of money (larger than a micropayment) under the assumption that they'll continue producing similar information.

For example, I'd probably be willing to pay CA$3/month for access to slashdot discussions. I'd be willing to pay $5 or $10 per month for Access to FirstMonday [firstmonday.org]. I already pay over US$100/year for access to the IEEE Computer Society's Online Library [computer.org] (it's worth every penny!).

I don't bother with "free" information presented by CNN and other "news magazines". The accuracy of the information they present is questionable, and the cover is shallow.

Perhaps if web sites generated revenue from subscriptions instead of banner-ad sales we could be rid of these ridiculous three column layouts that impede understanding of the core content they contain.

We're too big for "the old days" -- face it

These days, the net is too big for something really good to be a "labor of love." Somebody has a hobby. They say, "I can afford to spend $X on my hobby." So they find a way to set up a server with their little labor of love, and it costs them around $X.

Someone says, "What a great site!" and tells all their friends. Sooner or later, the traffic to the site increases way beyond what can be served by $X. So our friendly hobbyist who had such a great site to share has very few options:

1. Shut down
2. Relocate and hope people don't find him
3. Hope some nice sponsor funds his work.
4. Get money from somewhere to increase bandwidth.

Nobody wants option 1. Otherwise you have dozens of little sites popping up and dying as soon as they gather some intertia.

Option 2 is hardly better than option 1.

Option 3 is not going to happen often, and may be unattractive as you're bowing to their control, possibly.

Option 4 is all that's left. So how do these guys get money? Banner Ads? But we know those aren't working -- ad companies refusing to pay sites running their ads, etc. What about asking their dedicated fans to pony up a little ... contributions, as it were.

If it works, why not have it?

I visit Penny Arcade religiously. I've told everyone I know who plays video games to check out the site. I've learned about great games from them, I've laughed my ass off at their strips. When they put up a micropayment box I immediately sent my micropayment in.

If your fans love your work enough to pay you to do it...great! You've succeeded. How many sites would I be willing to micropay to get at? 3, maybe. But it's one way to cope with the increased monetary restrictions of what was originally a little hobby turning into something that costs an incredible amount to maintain.

Re:I already pay.

I already pay a monthly fee to get access to this content. It's that little monthly fee that the broadband provider charges me.

I allready pay for gas in my car, but I do expect to have to pay for the newspaper when I drive up to the local store. I don't really think that 7-Eleven cares too much how much I paid for my car last month, I'm going to have to pay for my damn newspaper. Just as a content provider doesn't give a damn what you pay for your internet access. Remember how usless your broadband is without content...

We don't need "Micropayments"

We just need payments. Quick and easy, as simple as clicking a single button on your browser, mp3 player, movie player, etc... The key is that it should be voluntary If you read/listen/watch something and you hate it, you shoudn't have to pay for it. That's part of why Napster is such a success. The current model of selling music where you can't listen to it before you plunk down your money (or you only get to listen to a small part of it, only to find that the rest sucks) is what people are rebelling against. Sometimes it takes a while before a work sinks in and becomes enjoyable. How many times have you bought an album that you thought sucked on first listen but eventually grew to like considerably? There needs to be a system in place so when that moment of comprehension hits you and you think "Wow, this is great stuff, I want the artist to produce more" you can just click that button and enrich them. No matter where you got the work from, especially if you got it from your buddies or off something like Napster.

The problem that "Micropayments" have is the name carries a lot of baggage. Usually people interpret it to mean metered compulsory payment (albiet a small payment) of every page you hit. This will never work because people just don't like to pay for anything before they know if it's worth paying for or not. In a world where infinite copies can be made for nothing it just doesn't make sense to pay for information up front.

Voluntary payments are the revenue model of the future. It's how artists were compensated before Copyright, it's how it'll work after copyright. The difference now is the entire world can potentially toss coins into your hat and you don't have to actually stand on a street corner performing to collect the tips. Artists will find that the most revenue will be made by letting your work spread as far and wide as possible while at the same time making it as easy as possible for your fans to enrich your no matter where they get your work from. The ones that try to lock up their work and force people to pay for it in advance will fail.

burris

I wonder....

I wonder why Hemos chose this topic today.. hmm.. nope... I am not planning to pay to keep Slashdot up and running, if thats what you ask me.

however I have heard that M$ pays handsomely for sites that choose to display their "Freedom to innovate" ads.. That would be so cool, to have slashdot to display that ad. :)

Dont moderate this up or down..just leave it as the way it is.

No Sir, I Don't Like It.

Micropayments = Bad. If that kind of system goes into place, my web surfing stops cold. Why? Because it's too easily abused. Pop-up windows for one. Click to a page and suddenly ten windows pop up, each with its own micropayment. The user will get screwed by this and even more involved scams. The cable TV system is a better approach. Pay for content, but pay one bulk rate for a wide selection of sites (channels). Instead of 50-500 TV channels, one micropayment network could have a stable of 1000-5000 sites all under the same fixed payment umbrella. Who knows? I will always churn out my half-assed attempts at web entertainment for no pay - I haven't seen a penny yet. Do it for the love, baby.

Easily more profitable

I think that micropayments are a more profitable avenue to raising funds of r a quality sites than advertisement is. If you think about it, your average sites get about $1 - $2 per 1000 page views, which is pretty little. Asking a user to contribute aronud 50 cents per month for access to the site, isn't asking for too much, and if the process was somehow automated, and made into a one-click proposition, I don't think a lot of people would object to paying the fee.

If you think about it, such a small payment will add up to large monthly sums for the sites that carry content users are really interested in. This will also result in a "survival of the fittest" kind of an atmosphere, eliminating a lot of fluff sites out there.

So I say, bring it on.

If and only if...

Would you pay for content if the infrastructure was secure, inexpensive, and allowed the content to prosper?

If it meant that I got to choose who the money went to - that is, that it went to the content creator and not an agent, distributor, middleman, or some other breed of fuckwit five-percenter - then yes, yes, a thousand times YES!

I don't think the problem is that - as one poster put it - that the 'Net will become one giant pay site - content creators should get paid for good work. The problem will be keeping scumbag content-control freaks (Sony, RIAA, MPAA, the U.S. Congress) from mucking it up and taking a cut.

I think it would be the ideal way, though, to pay for good independent content like Penny Arcade [penny-arcade.com], Sinfest [sinfest.net], and even Jennicam [jennicam.org] - and all the other content-based sites I like, but for whom I'm not willing to enter into an expensive revolving subscription agreement.

We'll see if it actually happens...

OK,
- B
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