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The Media The Almighty Buck

Responses to Clay Shirky on Micropayments 131

Posted by michael
from the macroarguments dept.
FrnkMit writes "Others besides Slashdotters have responded to Clay Shirky's latest article on Micropayments, including long-time micropayment booster Scott McCloud and the MIT Technology Review."
This discussion has been archived. No new comments can be posted.

Responses to Clay Shirky on Micropayments

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  • Lethargy! (Score:4, Interesting)

    by Scoria (264473) * <slashmail.initialized@org> on Sunday September 14, 2003 @04:58AM (#6955965) Homepage
    Registration, however trivial, is ultimately inconvenient to the casual browser. These individuals are likely dedicating a minimal amount of effort to your website.
  • by Hamstaus (586402) on Sunday September 14, 2003 @04:59AM (#6955968) Homepage
    Any article mentioning Scott McCloud must of course include the views of two of my favourite philosophers [penny-arcade.com].

    (P.S. If you read the news article that goes with it, you'll see that the comic is actually about micropayments.)
    • Tycho made some good points in that article, but he eventually retracted most of it. He finally came to the conclusion that even though micropayments aren't for him, they might work for some folks. Hell, I'm probably totally misrepresenting what he said (It's been a while) but he said something like that.
  • by Anonymous Coward on Sunday September 14, 2003 @05:03AM (#6955973)
    Nanoprofit!
  • by epsalon (518482) * <slash@alon.wox.org> on Sunday September 14, 2003 @05:04AM (#6955978) Homepage Journal
    ... is that there's so many to choose from. The problem is all these micropayment systems don't interconnect with eachother. If I were to sign up with BitPass, I would have to pay $3 even though I need it only for a purchase of $0.25 The same goes for any other micropayment system. I think micropayments should be handled in a decentralized way, all the way from your ISP bill to the target vendor, using so-called "micropayment banks" in the process.
    • What if there was some sort of governmental 'blessing' -- perhaps similar to paper currency?

      Micropayments might be more appealing if managed by 'public trust' rather than 'dot-com.'

      I haven't entirely thought it through, but is that better? Worse?

    • I'm glad this was modded so high, because the point is absolutely critical. I think micropayments is a very important development, and I strongly support it, but it won't work before it is removed from the control of single companies. You can't have a single company controlling micropayments, it will lead to all kinds of evil, so you need open specifications, implementable at no cost for anybody. Only then can we make a feasible micropayments system.
    • It's not just having to pay the $3 up front, it's also the fact that you need to sign up, which is a bother. Already there are sites that ask you to register without payment (NY Times!!), and many of us can't even be arsed to do that.

      Many of these people working on micropayments seem to think it's just another way to collect payments for what amounts to a subscription, or a pre-paid content scheme. Most of the current premium sites and micropayment schemes fail to take the occasional visitor into accou
  • Microfraud (Score:5, Insightful)

    by nacturation (646836) <`moc.liamg' `ta' `noitarutcan'> on Sunday September 14, 2003 @05:05AM (#6955981) Journal
    If micropayments ever become ubiquitous, I think we'll start seeing the old "salami slicing" hack again. When a lot of stuff you do online costs a nickel here, a penny there, a dime elsewhere... you can rack of some pretty serious numbers of transactions just browsing around. After all, if loading that New York Times article linked to from Slashdot is only 2 cents, who cares, right?

    But perhaps some clever fraudster will see an opportunity here. Wouldn't it be easy to steal 1 cent a month from 1,000,000 people who use micropayments? After all, who's going to notice a line item titled "News article ----- $0.01"? So there's $10,000/month that nobody's really going to miss.

    And for a single penny, would most people take the time to make a phone call or write an email to request clarification on where that charge originated? Even if all you make is a pitiful $3.60/hour, that one penny takes a mere 6 seconds to earn, far shorter than the time it would take to investigate. And is the micropayment company going to investigate your 1 cent dispute? Likely they would ignore you or even just automatically refund your penny without much thought.
    • Re:Microfraud (Score:4, Insightful)

      by Rogerborg (306625) on Sunday September 14, 2003 @05:50AM (#6956063) Homepage

      Correct! I did the sums on this a while back, and at $0.01 per transaction, you don't have much room for things to go wrong. You need a lot of transactions to amortise your fixed costs, which means a few big micropayment services rather than many small ones. Once you figure a crack for one of the big payment services, you can cream it pretty much at will, because as you so rightly point out, the cost of investigating any given transaction vastly outweighs the cost of the transaction.

      You'd need about 10,000 transactions from one source before it's worth taking action, but then the question becomes: how much do you spend to find and associate those 10,000 fraudulent transactions? The only real strategy is to ignore all but the most blatant and clumsy fraud, but then it's simply a question of whether you can cover your fixed costs while being bled slowly to death.

      MIcropayments are based on trust, and that's in pretty short supply online.

      • MIcropayments are based on trust, and that's in pretty short supply online.

        If you used a distributed trust mechanism (not Passport!) that authenticated both buyer and seller, perhaps a sufficient paper trail can be established so that persistent fraud can be more easily detected. I wonder if this would ultimately result in micropayment systems becoming part of a credit-reporting system like we have for credit cards & loans, where buyers and sellers can set thresholds to prevent transactions with "bad
        • The problem is that even keeping records of your transactions has a fixed cost per transaction, and at $0.01 per transaction, you don't have a lot of leeway to do that.
    • by Anonymous Coward
      > Even if all you make is a pitiful $3.60/hour, that one penny takes a mere 6 seconds

      You mean... 6 minutes!

      This validates Clay Shirky's point... when talking about very small sums of money, you easily make wrong calculations of its value. And I'm the first to notice this, the others just nodded and made the comment +5, Insightful.
  • Fame vs. Fortune (Score:5, Interesting)

    by heironymouscoward (683461) <heironymouscoward@@@yahoo...com> on Sunday September 14, 2003 @05:12AM (#6955993) Journal
    The article is spot-on, for specific kinds of content, but I think its conclusions are wrong.

    Clearly no-one will pay even a dime for content that they can get elsewhere for free. It's true that the size of the payment is less important than its simple presence.

    But there are other things we happily pay for, and micropayments are a basic necessity if we want to get those things digitised and available on-line.

    In Belgium, where I am, people are using premium SMS messages for micropayments. It's incredibly inefficient: a Euro1.00 message returns at most 60% to the website owner. Yet this is becoming a more and more popular way of charging for access to dating sites and other web sites people are happy, eager even, to pay for.

    Micropayments to reserve parking spaces, to place small ads, to search for appartments, to post a CV to a job site, to chat with remote friends, to get news on what's happening downtown, to vote for pop starts, to play games, to access porn,... the horizons are vast and limited today only by the complexity of linking the consumer's wallet and the vendor's account.

    What's missing in the micropayment world are two things, AFAICS. One is government support to mandate norms and standards backed up with legislation and consumer/supplier protection. Two is support from the banking industry in the form of accessible implementations available to small vendors.
    • Clearly no-one will pay even a dime for content that they can get elsewhere for free.

      I think that depends on what you mean by "free". For example, I don't consider my time and effort to be worth nothing. Maybe all the hassle of clicking on a "pay 15c" button is more useful to me than 20 minutes spend poring through search engine results?

      If I'm downloading a large piece of software, for example, I likely would pay 10c if it meant I'd get a faster download.

      Or webcomics... there are free ones, and the

    • It's incredibly inefficient: a Euro1.00 message returns at most 60% to the website owner.

      I looked up some price quotes - e.g. this PDF about mBlox premium SMS services [mblox.com]. 600 Euro setup, about 400 Euro rent per month, and payout rates as low as 1 cent on a 25 cent message... ugh. The best payout is 38 cent on a 1 euro message.
  • I don't think I have ever subscribed to online content where I had to pay money. Another thing I don't do, which Clay mentioned in his article, is sign up to the people who force you to fill out their questioneers [nytimes.com] to read their content. I have definitely found that I can find the information through Google [google.com] via Usenet which, despite people claiming is dead or whatever, is a very good resource for many types of info, including world events in which the posters themselves might be taking part in. So being an a
    • Right On! I would never pay money for content I can have for free. It's just plain stu... just a second, what's that star [slashdot.org] next to my nick mean? Oh, nevermind.

      As mentioned above [slashdot.org], voluntary payments with or without small bonuses are a way to go. I subscribe to SlashDot and I dontate to the operators of a free website I browse regularly.
      • I would never pay money for content I can have for free. It's just plain stu... just a second, what's that star next to my nick mean? Oh, nevermind.

        Someone forced you to pay to read /.?

        Here's the post you were replying to:

        I don't think I have ever subscribed to online content where I had to pay money.

        If you read Clay's article, you'll see that you're making his point for him.
  • A missing point (Score:5, Interesting)

    by JanneM (7445) on Sunday September 14, 2003 @05:29AM (#6956021) Homepage
    A point in the MIT piece shows that they do not really understand what they are talking about. They say:

    "A micropayment system like BitPass would allow consumers to experiment with new content but also to place their support behind specific artists whose work they find consistently rewarding and interesting. Ultimately, they are paying for only the content they consume--and not shelling out a fixed sum every month."

    In other words, they see pay-as-you-go as a benefit to the consumer. Problem is, the consumer does not view it as a benefit; rather the opposite.

    A number of studies have shown that people greatly prefer a fixed-cost structure over use-based payment - even when they demonstrably would save significant amounts of money by switching over. People find the need to constantly decide whether a given use is worth the money; and to feel they constantly have to monitor and aveluate their usage spending to be a burden that is disproportionate to the amount of money they would save, even when the amount is quite significant.

    I know that the most liberating aspect for me of going for a fixed line, rather than using a modem, was not the speed, but rather the liberation of being online at all times, using it whenever I wanted without worrying about telephone charges (local calls are metered in most of Europe).

    So, no, I do not really believe in "micropayments" in the sense they are talking about it here.
    • In other words, they see pay-as-you-go as a benefit to the consumer. Problem is, the consumer does not view it as a benefit; rather the opposite.

      Which consumer? I see pay-as-you-go as beneficial in many, although not all, situations.

      A number of studies have shown that people greatly prefer a fixed-cost structure over use-based payment - even when they demonstrably would save significant amounts of money by switching over.

      So when you go out to dinner you always go to the same restaurant where you pay

      • Re:A missing point (Score:3, Insightful)

        by rollingcalf (605357)
        Going to dinner, buying a chocolate bar or taking a ferry are transactions that are big enough in size that the price of the actual item itself dwarfs the mental transaction costs. It's generally not a big bother to spend 25 cents of mental time and effort on deciding whether to buy a $15 dinner or $2 comic book, but when it's 10 cents of time and effort to decide whether a 1-cent article or web page is worth it, it becomes very discouraging to the customer.
  • by Anonymous Coward on Sunday September 14, 2003 @05:38AM (#6956038)
    Lots of websites and blogs have picked up on this...

    Metafilter [metafilter.com]
    Les Jones [lesjones.com]
    Bruce Landon - landonline [weblogs.com]
    City Comforts Blog [typepad.com]
    Marginal Revolution [marginalrevolution.com]
    Long story; short pier [longstoryshortpier.com]
    Tom Maszerowski on Livejournal [livejournal.com]
    bbCity.co.uk [bbcity.co.uk]

  • IMNSHO (Score:3, Insightful)

    by The Famous Brett Wat (12688) on Sunday September 14, 2003 @05:40AM (#6956041) Homepage Journal
    A good mechanism for micropayments would be a good thing, in and of itself, although I won't venture into the tricky area of what counts as "good" in a micropayment system. The mixed results of PayPal to date demonstrate the two-edged nature of a system for managing payments where the custodians of the money are, arguably, a little under-accountable.

    But cutting to the chase, if a good micropayment system does get invented, then it will seriously lower the bar on the "tip jar" concept. The overhead of deciding whether you want to spend a cent here and a cent there (especially on a site that you can't sample for free) is enough of a headache (even at low risk levels) to drive people away, but if your favourite webcomic has a tip jar, you might throw in a dime a day, or even a penny a day (he said, shamelessly resorting to Americanisms). Those things can add up if you have a big readership, and can overcome the expenses that Mr McCloud points out with regards to bandwidth and success being its own worst enemy.

    As for the sites that want to try the "you must pay me 25 cents in order to see this page" approach -- feh -- let them take their chances with the free market; I won't resent them in the unlikely case that it works. But in my not-particularly-humble opinion, voluntary payments [pbs.org] will be the way to go (see second and second-last paragraph of linked Cringely article).

    • I'm glad I'm not he only one who feels a sense of unease about the whole PayPal concept. Even Amazon, probably the most widely trusted brand for online payments has made big mistakes in how it reassures its customers and deals with their transactions.

      I can't see micropayments ever working better than a subscription model for serial long term opt in, and if there's a free site/list I like I'm going to be a lot happier occasionally buying a tshirt, piece of software, a mug, CD, picture or book to show my app
  • by skizz (9994)
    McCloud makes the point that no-one is going to pay for Joe Random Blogger's thoughts, But they will pay 25c to an artist who they know will give good value. 10 million iTune users can't be wrong.

    Personally I'd rather pay 25c to give a site a try than give away my credit card details and subscribe for a year to a site I might never read.

    And you can join BitPass using PayPal - so its hardly difficult. And yes I have. And yes it is worth 25c.
    • you can join BitPass using PayPal - so it's hardly difficult

      Even though a BitPass keeps you from having to give your credit card information, you still have to pay with a credit card OR with PayPal, and you still have to give information you may not want to give to PayPal. Bottom line - at some point you have to give someone information you don't want to give them.

      I think the only way this will ever work is if you can actually BUY a BitPass at (insert omnipresent retail outlet here). If a BitPass were l

  • by Liselle (684663) <slashdot@liselleFREEBSD.net minus bsd> on Sunday September 14, 2003 @05:57AM (#6956078) Journal
    From the article: [I]Analog publishing generates per-unit costs -- each book or magazine requires a certain amount of paper and ink, and creates storage and transportation costs. Digital publishing doesn't. Once you have a computer and internet access, you can post one weblog entry or one hundred, for ten readers or ten thousand, without paying anything per post or per reader. In fact, dividing up front costs by the number of readers means that content gets cheaper as it gets more popular, the opposite of analog regimes. [/I] Does this person think that web hosting and bandwidth are free? The reality is completely the opposite if you look at things like webcomics, where popularity will literally bankrupt the artist, as they gain too much traffic to live in free webspace.
    • If there is a mistake...well, you should have used the 'Preview' button!

      Ahh, Slashdot, I should have listened to you. :P
    • Kazaa... morpheus... freenet... usenet...

      Especially for a comic artist, where the content is inherently visual, it would NOT be hard to adopt a distribution mechanism that was, essentially, free. Put a panel on every comic linking to the author's site: those who like the content will visit, those who don't, won't. Put up a tipjar, or even offer an "early bird" subscription service (ie get the next edition a week before the "free" channels, etc.). Because casual fans can get the comic completely free of cha

    • It isn't necessarily cost free, but it can be VERY low cost.

      You don't need graphics or javascripts or a shitload of meta tags.

      The article itself doesn't take much (maybe 1000-2000 bytes for a 500-word article using embedded gzip). The sidebar or links don't take that much either (use plain HTML, and keep paths reasonably short).

      All in all, 2,500 bytes might be used per hit, so you could serve 400,000 hits/GB. I'll assume web bandwidth is $1/GB, which would put the cost of a hit at 2.5 u$ (microdollar, or
  • Art IS a commodity (Score:4, Insightful)

    by Pflipp (130638) on Sunday September 14, 2003 @06:00AM (#6956084)
    Being an "artist" myself, and even having vague plans at earning my money with this after my (unrelated) study, I'm afraid I must disagree with McCloud saying that art isn't a commodity.

    Funny though that Dictionary.com has a rather interesting definition [reference.com] of the word "commodity" with relation to McCloud's comments, but I'm sure that McCloud tries to say that a commodity is "something that you can just take for granted".

    We may not realize this, but our "modern" culture, like any other culture before it, relies on the availability of the art that underwrites it. Belonging to a culture is still something that is expressed through music, art, fashion and religion. People don't like restricted access to culture. Music, cartoons, whatever art it is that you like, it becomes part of your life, and part of your culture. (Striking example: how many `80's songs do you like to hear, while you agree at the same time that they suck -- just because you grew up in the `80's and you can share something with your friends through this music?)

    Life, even in our Western world, would not be so nice if we all threw out our stereos, radios, comic strips, TV's, bioscopes, monuments and ALL other ways in which we access art, and thus culture.

    Art is a gift to culture, and should thus be a gift to the people. Like anyone else, artists should make a living. They should definately find some way to calculate their hours of work into their products. But the art should be free for all of us willing to enjoy and extend it (bar stuff like trademarks that put some structure in the "development process" of our art).

    Now get out there and start making business models again! ;-)
    • "I'm afraid I must disagree with McCloud saying that art isn't a commodity." I think he meant commodity in the sense of an interchangeable product. Milk is milk, soap is soap, news is news. But Stephen King isn't Haruki Marukami and Ozzy Osborne isn't Justin Timberlake and Scott McCloud isn't Frank Miller. If Frank Miller was doing a comic about, say, ancient Greek warfare, but it cost $3.95 per issue, would I therefore be getting the same for less (or no ) money by reading another comic on the same subj
  • I am curious, does anyone know how much some of these programs that solicit donations make a year? I have seen a few fail, who had this system in place. I know DeadAIM went to a forced donation system, because they weren't getting enough. They seemed very open about this fact. I know probably close to 50 people who have spybot, and would never think to donate. I think the tech people who are aware of the things these people go through to make these programs do donate. The general public though doesn't,
  • One only has to look at the Internet adult entertainment industry to see that micropayments are already a working solution.

    People will pay for content if it's something they actually want. Micropayments using a prepaid scheme are much more attractive than conventional credit-card systems because they are (a) anonymous, (b) transferrable, and (c) cheap.

    I think the discussion in the article is entirely skewed because the author looks only at conventional content, and even a cursory look at the Internet demonstrates that supply far outweighs demand: there is an almost inexhaustible supply of prose, music, humour, and news. Why would you register for such content, let alone pay for it?

    Basic economics: make something people want, and can't get elsewhere, and they will come and pay for it.

    Blaming the payments scheme for weak products that no-one wants is surely a mistake.
    • Name one online payment system that is anonymous in the same way as me throwing a dollar bill into an open window is anonymous.

      These systems are absolutely not anonymous. Most payment systems require affiliation with either a bank or a credit agency, which means every single purchase can be tracked.

      I think the discussion in the article is entirely skewed because the author looks only at conventional content, and even a cursory look at the Internet demonstrates that supply far outweighs demand: there is a

      • Dang, I must recheck my systems. No wonder I've been starved of Suzeware recently.

        But seriously, your point is well taken. However, newsnet only serves porn to a select market, namely geeks, while there is a huge population of one-handed surfers out there who would not know a uuencoded jpeg if it hit them on the ass.

        Also, I have seen several adult pass systems that sell in nightshops, and this is entirely, totally anonymous. Buy a token in a shop, use it to micropurchase. And AFAICS it's only for porn
        • Seen the press releases about sobig? How it started at "a porn site" in arizona called easynews?

          Easynews has become the god of usenet. They're huge. And they're not the only one. There are several newsgroup services offering a user friendly web interface these days, and it's attracting a LOT of people. Hell, I don't even use news reader software for most groups these days - it's far easier to fire up reget and shop via the web.

          So far as the user is concerned usenet is now the web. If you want to talk you

    • One only has to look at the Internet adult entertainment industry to see that micropayments are already a working solution

      Really? Which sites offer micropayments? I see lots that have subscription services, but none that use micropayments.

      Perhaps you should read his article?

      People will pay for content if it's something they actually want.

      Again, read the article - he's not saying that "nobody will pay" - he's talking about how they'll pay.

      I think the discussion in the article is entirely skewed be
  • Whether micropayments can work, or even defining what a micropayment is, seems a bit besides the point when we don't have e-currency.
    When I use the term "currency" I don't mean some private company's wishful thinking about taking over the job of the federal government. Anybody who thinks that the establishment of the currency is not the job of the federal government and can be left to Citibank or Banc America has a very limited grasp of the Constitution. And as for some Johnny-come-lately start up is
  • Virtually every major consumer service provider is moving towards flat rate pricing. It is far simpler for the service provider and far simpler for the consumer. Not only is it simpler, it is also cheaper. The service provider saves a lot of money on billing which is priced as a function of complexity. Flat rate packages provide a great value for the consumer and also simplify the consumer's finances. There is good reason that millions of consumers are moving to flat rate service providers.

    As a micropaymen
    • Flat rate packages provide a great value for the consumer and also simplify the consumer's finances. There is good reason that millions of consumers are moving to flat rate service providers.

      Not all of them - I had a good chuckle some time ago when a local Internet provider/media company launched their offer of rated dialup without a fixed fee. Their reasoning was that people hate paying monthly fees and would rather pay-per-use, something, against which I as an ex-dialup and ISDN user can testify!

  • by CGP314 (672613) <.ten.remlaPyrogerGniloC. .ta. .PGC.> on Sunday September 14, 2003 @06:23AM (#6956130) Homepage
    Micropayments, small digital payments of between a quarter and a fraction of a penny, made (yet another) appearance this summer with Scott McCloud's online comic, The Right Number, accompanied by predictions of a rosy future for micropayments.

    To read The Right Number, you have to sign up for the BitPass micropayment system; once you have an account, the comic itself costs 25 cents.


    Right there. Did you see that? That's the problem with micropayments.

    I don't know this guy and I don't know his comics. Why am I going to hand him a quarter to read his stuff?

    Sure, if he is already established in his niche on the 'net, he can make a good living. But, if you are just starting our, micropayments will guarantee the death of your site. No one will pay for a site, um, sight unseen.

    I'd love for people to pay a penny to read my weekly London Journal [colingregorypalmer.net], but I know if I asked for it first, I would never get any new visitors.
    • The answer to that is simple; you offer a selection of content, some of it for free and some of it your pay for. In the case of Scott McCloud, he has a LOT of comics already available for free, so you get a good idea his work before paying for anything. Most other webcomic artist who are (or are considering) charging for content are doing the same.

      I also think that micropayments are usefull for providing higher quality versions of media that is already available for free; higher res comics, or higher bitra
    • That's a fair observation, but Scott Mc Cloud does offer a sample of the comic in question on his web site before you comit to paying. And secondly, perhaps most importantly he has a backlog of older comics available free of charge form which you might get an idea of whether you are interested in his work or not. perhaps obtaining a following and *then* charging is the way to go.
  • by Anonymous Coward
    The total invasion of privacy inherent in the micro payment model is beyond belief. A micro payment record of each and every place you go or document you read etc. The ability to profile people to this degree is the dreams and aspirations of those who would have a totalitarian state.
    Unless they can figure out how to deduct micropayments from a phone card or some other device that can be bought locally for cash over the counter, they better nix that idea but quick. Come to think of it, there's no good
    • What?! The guy bought fertilizer and electic wire on the same day, AND the guy owns a diesel powered car? The only known use for fertilzer and electic wire by people with access to diesel oil is.... Oh my God!! Off to Cuba!
  • by poptones (653660) on Sunday September 14, 2003 @06:40AM (#6956163) Journal
    I don't believe either of these articles really hit the nail so much as the pessimists view of micropayments did. The micropayment system itself is still something of a nuisance and even anathema to many people who (still very much) believe in information being free. Charging for content - even just a penny - presents a barrier that goes far deeper in our society than the visible cost.

    If you are walking down the stret and someone asks you for a penny, would you always give it to them? Every time? It's just a penny - if you saw a penny lying in the street odds are you wouldn't even bother to pick it up, unless perhaps to feed your superstitious side. Maybe we ordinarily would but have already given out all the pennies we had in our pocket. Maybe we have an ethical objection to handing out pennies to whomever asks for one. Or maybe we're just having a bad day and don't want to be bothered. Still, one can reasonable argue the simple act of giving someone a penny should be well within the capabilities of even the poorest of us.

    But once you move online that penny represents an entirely new barrier. It represents the wall between those who play the system (however badly) and those played by the system. Not everyone has a credit card. Not everyone has a debit card. Furthermore, many people, despite the fact they could have one of these wallet size icons of mass consumerism, don't want one. And it's not because they don't like buying stuff, or because they're too cheap to give you a penny if you were to ask them face to face.

    Charging for content online places a barrier between the creator and the audience that goes much deeper than the same model in meatspace. And it's not necessarily an economic one, although it very much can be. Mostly, tho, it's a barrier of philosophy, and it sets the wrong tone for the future so many of us allege to believe in.

    The entire promise of this new distribution mechanism is it puts creators more directly in touch with consumers. That some creators are going to work within existing economic structures is to be expected and, frankly, I say more power to'em. But this is a choice for the creator that does not directly involve me: if someone puts banner ads on their site to help them pay the bills, that involves me only passively. Moving to an escrow agent, however, forces the consumer (me) to play an active role in that exchange - even when "it's just a penny" and even when the mechanism is "transparent" at the point of sale.

    • Not everyone has a credit card. Not everyone has a debit card. Furthermore, many people, despite the fact they could have one of these wallet size icons of mass consumerism, don't want one.

      Then use a micropayment service that doesn't require one. Perhaps your ISP could offer one? Or maybe your Telco, Bank, University, anyone who you're already paying for services could, and just add it to your bill. Maybe you could buy $5 prepay micropayment cards at the gas station...

      - Muggins the Mad

      • You be sure to let us know when an anonymous micropayment system arises from the froth, won't you?
      • That won't work. For example, I have an account on a system that can be used to pay on-line, PayPal. But I can't buy McCloud's work, because he doesn't accept PayPal. I don't have to just have a micropayment account, I have to have one that the person I'm trying to buy from accepts. So unless there's only one or two systems out there that everyone accepts, there's the barrier of having to set up Yet Another Banking Account.

    • You make very good points.

      Shirky is correct.

      The other articles linked to don't seem to make a good case. They seem to argue that micropayments will succeed because content producers need them to succeed. But in a marketplace that is driven by consumers, not producers, that's not much of an argument.

      Shirky is right on in his discussion of "mental transaction costs." I think another way to view the same phenomenon is as a bunch of toll booths on the Information Highway. Driving from Washington,

  • Good stuff? (Score:3, Insightful)

    by CGP314 (672613) <.ten.remlaPyrogerGniloC. .ta. .PGC.> on Sunday September 14, 2003 @06:53AM (#6956187) Homepage
    In fact, the good stuff is becoming easier to find as the size of the system grows, not harder, because collaborative filters like Google and Technorati rely on rich link structure to sort through links.

    I disagree. If I type in 'good weblogs' to google, I still get a bunch of crap I'm not interested in. Why? Because my idea of a good weblog doesn't necessarily match up with everyone else's.
  • by Anonymous Coward
    devise. it would reek of corepirate nazi censorship to US, if it worked at all.

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    Due to excessive bad posting from this IP or Subnet, comment posting has temporarily (permanently, if we could figure out how to do it) been disabled. If it's you, consider this a chance to sit in the timeout corner. If it's someone else, this is a chance to hunt them down. If you think this is unfair, we don't care.

    alert: you've been lax in yOUR payper liesense 'upgrades', you'
  • by dybdahl (80720) <(info) (at) (dybdahl.dk)> on Sunday September 14, 2003 @07:06AM (#6956207) Homepage Journal
    The key to micropayments is to use existing customer relationships. Mobile phones are a good example - you can buy access to information or services by sending an SMS to a specific phone number. The payment comes onto your phone bill and everybody is happy.

    I am currently involves in implementing micropayments for gaming services, and it works great.
  • It isn't free to produce good content. No, most weblogs don't count as good content. A journalist might charge (say) $500+ for a decent size article. You have to add hosting and bandwidth costs to that - obviously, whatever Shirky says, it's not just as cheap to serve 200,000 pages as it is 1.

    Good free content on the internet at the moment is supported basically by advertising. Either directly through banners or google ads, or indirectly, through advertising some offline publication or organisation. Newspa
  • Nothing personal against Scott McCloud, I wish him the best, but he and other micropayment proponents think micropayments are a good idea for 2 reasons:

    1. It's good for them (i.e., they get money)
    2. They desperately WANT micropayments to work because it would be good for them
    (aka "Wishful Thinking")

    A year from now, when BitPass has joined a dozen other companies on the micropayment scrapheap, Scott's wishful thinking will continue to prevent him from recognizing the fundamental flaws that d
  • What is needed is a way to keep the micro-decisions away from the consumer. You should be able to pay one macro fee, say $10/year, which gives you access to a network of participating web sites. Then you visit those web sites as much as you want without worrying about per-article costs, and behind the scenes they work out how they share the revenue. I figure that's how those Adult verification services work.

    There would also have to be the option of anonymous transactions, which could be accomplished by
  • I think here again the pundits are rearranging facts to fit their reality.

    The question isn't whether we will pay for content: We already are.
    By and large most of us do not pay for content. How many of us buy magazines that are supported primarily by subscribers? They do exist, and their sales are marginal.

    We tend to pay for the physical item or the name or other costs. Why else would we have no problem paying a dollar for a newspaper, but nothing to get it online.

    In others, we may prefer to pay

    • You pay for advertising-supported content. The dollars for the marketing budgets for the products you buy come from one of two places: investors or revenue.

      During the dotcom boom, you could make a case that you did not pay for advertising-supported content, because the money for the advertising was coming from, in large part, venture capital funds. Today a far larger share of advertising dollars are coming from the revenue that companies generate by selling products.

      There might as well be a line item on e
  • So, I read the Technology Review article which said that "The Right Number" was really good... and I navigated to The Right Number [scottmccloud.com] to check it out.

    Frankly, $0.25 per comic seems a little high to me. After all, the dead-tree Boston Globe costs $0.50 and contains more than 25 comic strips (only $0.02 each), at least five of which I really like and read every day.

    And I found out that I can't just buy $0.25 worth of BitPass, I need to commit to $3.00 worth. And I thought about it a little, and tried to decide
  • The more I think about it, the less I understand why I am expected to use PayPal to buy a BitPass, then use BitPass to buy "The Right Number?"

    Why can't I just use PayPal to purchase an individual copy of "The Right Number?"

    If the payment involved fractional cents, I could understand it, but as far as I know it is perfectly practical to use PayPal for payments of $0.25.

    Indeed, when I originally signed up for PayPal they specifically said this was one of the ways it was intended to be used and explained ho
  • I think before micropayments are discussed too much, there should be some agreement on what dollar amount constitutes a micropayment. My argument against micropayments has always been that because processing a micropayment has about the same fixed costs as a regular payment, the cut that processing companies take will be so high that micropayment systems will be doomed [ecommercetimes.com].

    For example consider the following question about minimum credit card charges [bayarea.com]. The retailer says that she pays Visa 3 percent of charges

  • Shirky's Folly (Score:3, Insightful)

    by Dan Crash (22904) on Sunday September 14, 2003 @11:40AM (#6957388) Journal
    If I'd known responses to Clay Shirky's article would get their own thread, I would've waited. Here's a crosspost of my original response [slashdot.org].

    By way of setting up a straw man, Shirky asks: "Would you pay 25 cents to view a VR panorama of the Matterhorn?" As if one's personal preference for Matterhorn photography had anything to do with the success or failure of micropayments.

    Make no mistake; like ALL business ventures, some people will fail with micropayments. Some will fail because they didn't know how to market their product, or because they set their prices too high or too low. But so what? That's endemic to capitalism, not just micropayments. Just because Crystal Pepsi failed doesn't mean capitalism itself is a failure. Engaging in these kind of arguments is a beginner's mistake, and most of Shirky's thoughts on micropayments surprisingly and unfortunately exhibit this same kind of sloppy thinking.

    His "mental transaction costs" argument, for example, is predicated on users being forced to engage in one or two cent transactions every time they want to view a page. But most micro advocates have abandoned this line of thought. The idea of charging a penny-per-page is history. What they want in the 21st century is the ability to sell their products -- songs and webcomics, mostly -- at a fair price. And micropayments enable them to do that. Shirky endlessly flogs the dead horse penny-a-page model, but conveniently ignores the 99-cents-a-song model that's made iTunes Music Store such a success.

    Scott McCloud himself writes that 1,354 readers bought Part One of "The Right Number" at 25 cents a pop. Considering that he was the very first BitPass seller ever, and that everyone who wanted to see his comic had to go through the effort of signing up for BitPass, that's remarkable, and worth talking about. It certainly flies in the face of Shirky's assertion that consumers on the internet are so lazy and indiscriminate in their tastes that they'll bolt to free content at the first opportunity. Scott's readers had to not only pay, but go through the effort of risking $3 signing up for a new, untested service. Scott's experience demonstrates that failure to get people to pay for your product has everything to do with your relationship to your audience and nothing to do with micropayments. But Shirky ignores it all the same.

    Finally, Shirky's views on micropayments completely fail to address the idea that micropayments can work with other forms of payment, such as subscriptions or bundling, instead of replacing them. Buying content ala carte may be the step that convinces you to subscribe to a site, for example. Micropayments aren't an either/or, they're an and. One more choice, not one less. And of course, micropayments can work exceptionally well alongside free content. Any public television pledge drive shows this principle in action; even small tchotchkes can induce many people to donate. Any thoughtful analysis of the future of micropayments ought to examine this phenomenon, but Shirky doesn't.

    In some ways, it's nice to see that Shirky hasn't changed his tune. At least he's willing to go down with the ship. But his analysis is -- by any standard -- unbelievably shallow. As the market for micropayment content increases, it will be interesting to see how he tries to spin reality.
    • I think that your posting contains the crux of the whole debate. Not that I agree with your conclusion, mind you...

      In the meatworld, in many circumstances, you can see (and maybe handle) the fruit before you buy it. Similarly, you can leaf through a book or magazine. There's an intermediate stage in the transaction between locating the product and purchase.

      Micropayment schemes that don't include a limited element of try-before-you-buy can never emulate the elements of serendipity and of shopping that
  • So I want to read the comic, but how long will I have this 2.75$ sitting around? Google searches bring up lots of blog entries but no one else seems to have bit (pun?) yet.
  • The problem with micropayments is twofold.

    The primary problem is that it is very difficult to create a financially profitable micropayment system for the operator. If you look at banks (in Finland we have a very efficient direct bank transfer system, top of the world, not cheques) and credit unions, they can not really handle anything less than several euros. Telcos are actually the most skilled profit makers on small transactions, but even their limit is around 10 - 30 cents.

    It is possible to push the co
  • The real issue for Scott seems to be:

    "Until then, we're left with a patchwork of hobbyists, bloggers, corporate promo, online mail-order and desperate screaming pop-up ads. The artists among us are relegated to noble failures and lovable martyrs--giving away their art for nothing 'til the rent is due and they have to go back to flipping burgers. I know far too many of these people to accept Shirky's placid scenario. They're tired, they're frustrated, and they're quitting in droves."

    Well... yeah, that's t
  • From my experience of running a high content website (7000 pages about plants Plants For A Future ) is that fame is great for the first few years, but it begins to ware thin as time goes on. I'm increasingly looking for ways to try and gain some income for our project from the website. I think this is close to what Scott has to say The effect of fame on the Web is often to rob the author of his or her fortune through excess bandwidth charges.

    I've not really tried hard enough yet but thinking of BitPass,

  • Cost vs. Value. (Score:3, Insightful)

    by AnotherBlackHat (265897) on Sunday September 14, 2003 @08:39PM (#6960528) Homepage
    There is a big difference between micro value payments, and micro cost payments.
    The inefficiency of all electronic payment system is huge.
    Bitpass charges between 5 - 15%, and it's one of the best in terms of money taken out of the system.

    -- this is not a .sig
  • McCloud is right, and Shirky is right.

    McCloud is right, people will pay the kind of sums he's talking about for the kind of content he's talking about. It's already happening. The caveat is that McCloud's talking about a certain type of content, that satisfies one of two conditions:

    • It's immediately recognized by many people and already known to have value, and the buyer's basically already looking for that specific content.
    • It's content available only from one source.

    Shirky's right, because the majori

  • There is tons of semi-micropayment stuff going on in Japan. Mostly centered around amatuer manga, anime, games and pr0n.

    Warning: Japanese required
    Warning: Adult content

    http://www.dlsite.com

    Click any of the images in the center. The number of paid copies sold is listed in the top right corner. About 5 to 10 new creations get added per day.

    Here's some more sites doing the same thing

    http://www.dejipare.com/
    http://www.dlfun.net/ d l_top.html
    http://www.sofpla.co.jp/cs/

    I've seen things like poems being so
  • You may be interested in this audio (MP3 download or stream) interview with Russ Jones of Glenbrook Partners on the subject of Micropayments. http://www.itconversations.com/detail.php?id=33 [itconversations.com]
  • FWIW,I bought and read Scott's .25 online comic. It was better than a lot of comics I've paid $3 for.

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