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The Almighty Buck

Scott McCloud on Comics and the Internet, part 2 80

strredwolf writes: "Scott McCloud, author of Understanding Comics and Reinventing Comics, posted up his latest I Can't Stop Thinking comic essay. In it, he continues on his "Coins of the Realm" series on Micropayments, citing the RIAA in price gouging (records costing $15, but tapes $2 a pop), and using Napster as an example on how to "put it to the man" by charging only 15 cents/song, and sending all the money over to the artists themselves. He also points to Scott Kurtz PvP, and how if every viewer chipped in 25 cents, and accounting for hosting and handling costs, Kurtz would be on a $73,000/year payrole! Interesting arguments. Saw on the PvP site." We linked to the prior essay as well, if you missed it.
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Scott McCloud on Comics and the Internet, part 2

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  • by Anonymous Coward -22&res=l :-) Never underestimate the bandwith of a truck running over you... err...
  • I use slashdot every day, and I'm still not registered with a login. I refuse to use sites that require me to remember logins and passwords, it's just not worth the trouble to remember them all. Cookies don't really work. I multiple computers. When I do finally get around to making a cookied login somewhere, it only lasts as long as my current computer (few months lifespan). If I really want something, I'll make yet another login. I make a new one every time I check ebay, or on the few occasions when I want to post somewhere or read one of the NYT story links. Unless one of these Micro-payment systems turns out to have magically no accounting costs for me, it won't be worth the trouble. There can never be such a system, because at the very least they cause me the trouble of estimating how much viewing a page is worth to me, and to use valuable thinking cycles determining if I want to pay for them. And god forbid I accidentally payed for a John Katz article on accident...
  • by Anonymous Coward
    Bollocks. Supposing you read 5 articles a day, every day of the year.... that's $18.25 for the year if you pay a cent per article. Not much to pay if you enjoy what you're reading, and if you don't enjoy it enough to pay $18 or so for the year, then you stop reading. And if 10,000 people are paying that much, then /. have $182500 that they didn't have before... and that money can be used to improve the site, or whatever. And who cares if usage drops like a rock. Usage will drop on crap sites, but the websites that you frequent will have a much-needed cash boost. I read PVP (mentioned in the essay) every day and would have no problem paying Scott Kurtz a few cents per comic strip if it helps him keep his site running. Not a scam, and it is admirable. Plus, frankly, if you're too stupid to let your money 'flow through your fingers' without an awareness of where it's going, then you deserve to lose it.
  • Actually, PayPal has a Webcart feature, but you may have to do a bit of Perl CGI magic to make sure those who've paid get the PDFs. There's ways around it, but still..

    That, and you have to upgrade the account too, which would add some more fees for the privlage of the weblinks and the Debit Mastercard (which I just got today).

    WolfSkunks for a better Linux Kernel
  • >> ...don't like to be sent ideas...

    Check out the episode of Babylon 5 that Joe Straczynski had to delay for a year (Passing Through Gethsemane []), or the novel Marion Zimmer Bradley was unable to publish (couldn't find a link), then ask how much is Sturgeon's Law and how much is justifiable paranoia.

  • Suppose someone actually set up a scheme where you pay 25 cents/month to see a site, free the first few times so you can decide whether it interests you, and paying by the month rather than by the page.

    In order for this to work, it would have to be voluntary: someone *could* just keep pretending they were new, there on the free trial, or they could share passwords or send the comics to their friends, or whatever.

    On the other hand, 25 cents isn't a lot of money. If it were convenient, people wouldn't avoid it, assuming they actually liked what they were getting. The time it takes to read a comic strip each day for a month is probably worth more than 25 cents to the viewer. The right interface would probably just be a thing that popped up if you hadn't paid for a month and you'd read more than a couple strips; you click the thing and don't think about it again for another month.

    The main issue I see is that micropayments only make sense if you're making a bunch of them. Getting money into the system only works on a larger scale (~20$); similarly, getting money out of the system requires a large number of payments.

    If you're going to pay $20/month to the sites you pay, and all of them will accept payments from the same account, it's feasible with credit cards or checks to the micropayment bank. But if there are only a few sites, it's going to be hard to find sites you'd be willing to spend enough on each month to justify getting the account.
  • Don't get me wrong. I'm most definitely not making excuses for the RIAA. I was objecting to the meme that seems to crop up quite freqently that CD's have NEVER come down in price. Attacking the RIAA where they have a built up and logical defense doesn't work. I say find a real weakness when you attack the RIAA. After all, there are plenty.

    I agree that the prices in some retail stores in some regions of the world have gone up in the last couple of years. However, that would be inflation. True the averaged inflation index has been negligible for the past decade. However, that doesn't mean there wasn't any inflation in the 90's. Take a look at the calculator at: According to that, a $15 CD in 1990 should cost $20.09. While the inflation from 1997 to 2001 wasn't as high, it was present during the 90's. But the averaged inflation index for the whole economy, but individual prices may go down while the whole index goes up. Or, individual product prices for . . . maybe CD's? might go up. Listen when CNN talks about inflation and mentions that energy costs are right now the primary influence on it changing. It's not like all retail establishments get a letter at the end of the year with the inflation figures and they raise the prices accordingly. Prices change and inflation measures it on a macro level.

  • Repeat after me. "Inflation. Inflation. Inflation." If a product sells for $15 in 1980 and that same product sells for $15 in 2000, it HAS gone down in price. Any product that doesn't increase in price over time has it's real cost decrease due to the inflation of other prices around it.

    If a product's price goes down in non-inflation adjusted dollars, then the decrease is substantial when figured in inflation adjusted dollars. There's a reason that economists quote figures in inflation adjusted dollars. It's because it's the most meaningful way to compare prices over time.

    This is the same principle used to say that most people are making less money than they did in the 70s. Sure the dollar amounts are more, but indexed for inflation, the real dollars are less.
  • Even assuming that all of the massive technical issues with micropayments vanish overnight, there's still no good reason why it would work out well.

    I _don't_ like the idea of paying /. a penny every single time I load up a new article. It doesn't sound like much, but over the course of the year, it would alone eat up more money than I'd ever spend on it. And when every single site on the web decides that each one of their pages is worth cash? Usage drops like a rock. Maybe even faster. And I wind up with no money, which makes me unhappy as well.

    Not to mention that it's a hassle to have to click on a dialog all the time, or to try to do the bit of math in your head, or to deal with dialogs that are disguised as something else.

    There is a wall of difference between things that are free, and things that cost any money whatsoever. It doesn't even matter how little. Attempts to breach this wall are basically scams to get people to no longer be aware of how much they spend, and to just let money flow through their fingers. It is _not_ admirable.

  • I hate the "CDs cost a dollar to make" argument..

    The second CD costs a dollar, the first one costs *so* much more..

    Recording costs are just the start of it.. Just sending a copy of your CD to every collage station in the US costs several thousand dollars worth of postage alone.. All that has to get paid for between that dollar and the sale price..
  • See how successful you are sending radio stations a URL instead of a big presspack and a CD..

    It's not the best system, it's just the ONLY system.. It's doomed in the long term (what isn't?), but it's *so* much more complex then pressing cost vs. retail cost..
  • This is the way to take micropayments. 1% fee, max 50 cents on any transaction, and it's not prone to the same frauds, charges and chargebacks which credit cards are. Plus it stores value as real physical gold, which they'll mail to you if you ask (in 400 oz bar increments only). Not some funny money prone to vanish when the company does.

    For the addy, see my .sig
  • Would you care to share some good links?
  • In any case, I think if a _network_ charged people fees it might work. An artist could have a very small webspace to introduce people, or show just today's comic, but then you'd subscribe to, say, keenspot for 3 bucks a month and you'd have access to the whole network. I would do that.

    Funny you should say that. Keenspot Premium []. $4.95 a month, no ads. It's new, so I'm not sure how well it is working.

    This has a negative side effect of centralization. If one of the comics is unavailable, it is almost certain that all of the comics are unavailable. With Keenspot, it seems they suffer a major failure roughly once a month.

  • but what about PayPal? Its got to be the easiest and best system we've seen yet, and it costs $.30 to send up to $15

    Granted, that won't work for micro-micro payments, like $.10 or something, but for say, a $2 or $3 payment, it at least begins to approach "economical," especially given all the possible payment options and being able to offload the payment processing hassles.

    No, we don't work for PayPal. :)

  • by HamNRye ( 20218 ) on Saturday June 16, 2001 @01:16PM (#146906) Homepage
    While I like the Idea of micropayments, who wants to spend 10 minutes inputting their personal information just to listen to a song?? (And pay for it.)

    Companies like CCbill, iBill, and Pay Pal give me the crawling hebie-jeebies. Here I am, redirected from the website I was at, and I'm being asked to give them not only my credit card number, but then tell them my demographic, etc...

    And Amazon?? No thank you. I don't want the spam, and I know that the person I'm trying to give the money to is only going to get half. (There goes that guy's 73,000 bucks.) Also, amazon is not going to like that guy doing 360,000 credit card transactions a year. (At .50 per pop...) Remember, this assumes a 10% processing fee. I don't think anyone can justify the transaction and support headaches when you do a half a million transactions for $8,000 Gross profit. (What's the net?)

    Micropayments will not be a relity until you give the consumers the ability to pass money back and forth over the net on a one-to-one basis. Sad but true...
  • by ywwg ( 20925 ) on Saturday June 16, 2001 @11:19AM (#146907) Homepage
    but I thought people decided that micropayments wouldn't work, mostly because people hate paying for everything. The mere act of needing to decide to buy becomes overwhelming when you need to buy everything. Thus a paper newspaper sells the whole paper, not individual sections or individual articles. There are links I'm sure people could supply.

    In any case, I think if a _network_ charged people fees it might work. An artist could have a very small webspace to introduce people, or show just today's comic, but then you'd subscribe to, say, keenspot for 3 bucks a month and you'd have access to the whole network. I would do that.

    the paypal donation method also works ok, but given NPR's need for underwriting it's not sustainable on its own.
  • The world would be wonderful if it were wonderful wouldn't it? There is _no_ real micropayment system and PayPal was an option before they changed to just billing your visa card which makes it impossible for them to bill cents amounts. Ah well.
  • by SuperKendall ( 25149 ) on Saturday June 16, 2001 @04:11PM (#146909)
    Have you looked at PayPal? Another poster mentioned it, but if you look at the business account [], you'll see that anything up to $15 has only a .30 cent fee!! Not to mention that they have a very good instaled user base of people who will have money sitting in a PayPal account and thus a bit more likley to buy something cheap.

    I've used them both to accept payments and to pay others for quite a while now, and I've never seen anything come close to being the bargain PayPal is.
  • I am not sure. It's a good question. But the better question is this: do artists perceive that they would earn more under this system. That's the real ticket. I am sure that Lars and the boys are incapable of making the analysis themselves, so will defer to the wise analysis of their trusted (read: RIAA sponsored) accountants.

    Yeah, that last bit is ranting, but what I think doesn't matter: what the bands think is what matters.
  • by gmhowell ( 26755 ) <> on Saturday June 16, 2001 @11:50AM (#146911) Homepage Journal
    Sounds like preaching to the choir to me. I pay what I think something is worth (for music, probably 30-75 cents per track, maybe as much as a dollar for something really good.) and after sucking out a little bit to pay for the server, it goes to the artist.

    I think we already know that this won't work anytime soon. First is the issue of credit/debit cards. If MC or Visa takes 3% (with a minimum of $1), the system is fucked. This should be solvable by either: MC or VISA lowering their cut, or having a 'net card (sounds like deja vu. I'm sure I've heard this before) wherein you buy a $20 gift certificate from Your band signs up as a MicroPay band. Then, every time they get $4-$5, they get a check. All of this is highly automatable. You could probably even kludge GnuCash or something to do it really cheap.

    The next problem is greed. The first and easy target of greed are the 'middlemen'. They (let's call them.... Sony) own the lawyers. The lawyers own the courts, and the courts make the rules. The middlemen don't want to go back to selling 2x4's and real estate. They like going to fancy parties and awards shows. What motivation do they possibly have to give the artist back some rights?

    Second is the artists. Let's face it, Lars and the gang are a bunch of greedy pricks. Same thing with Courtney Love. That much heroin isn't free. How are they gonna keep their noses packed on $70,000 per year? For every band that talks about 'doing it for the music', there are 50 who have dreams of being the big rock star, with a Lambo, a Ferrari, and a bunch of hooker^H^H^H^H^H^Hsupermodel girlfriends. That ratio gets worse when the good natured band gets a taste of success.

    Only consumers want this system. The record companies certainly don't. The radio stations are terrified of it (although this would work for them. No more annual payments for broadcast rights. Play a Britney song, pay for a Britney song.) And worst of all, I honestly don't think most of the 'musicians' would really care for it.

  • Yeh, I would LOVE to see a decent micropayment system. So far, alas, all of them I've seen have problems.

    For example, I've tried e-gold, and love the idea.The fatal flaw for it, tho is it's bloody near impossible to actually put money into your e-gold acount to start actually using it!

    Creating the account was real easy, but to actually put money into it, you have to go thru some third parties, and there are none I repeat none of them who will let you transfer funds to an egold account with a credit card or electronic transfer from your checking account. This alone torpedoes the whole deal. A few dedicated folks might go thru all the rigermarole of sending in a check to some agency, and waiting a week or two for it to process, but not many.

  • Highlander.

  • Interesting reply, thanks.

    I wonder if there's a way to word a click-thru disclaimer that would prevent/minimize the legal issues you and Weird Al bring up? I'm guessing Scott Adams gets around Sturgeon's Law by just wading through with a finger on the delete key (and drinking lots of coffee) but that's also a good point.

    I know using others' ideas is a touchy area for lots of artists. For example, my friend J.S.G. Boggs [] makes money the old fashioned way -- he draws it. He then goes out and tries to spend it in the "real world" to merchants who happen to have things that he wants. He's not a counterfeiter, merchants are well aware it's art they're accepting (although he has gotten into trouble with various governments in the past over that issue, it's a pretty silly one in his case and juries consistenly let him off). Needless to say, part of the reason that I like Boggs [] is that his art makes people actually think about the nature of money, art, and value in ways they haven't before, and that's good for business.

    Anyway, I have an idea for a Boggs bill; but if he does it exactly the way I imagine, or he changes my idea in small (or big) ways, or if he doesn't do it at all, I won't feel that he owes me anything for my idea. If he creates the bill just as I imagine it, it will have a face value too high for me to ever obtain it, anyway.

    It seems to me that folks should be able to give away art ideas as easily as people can give away software ideas, and that artists who accept free ideas should not have to fear an army of lawyers descending upon them if they commit the sin of financial success. I suppose Weird Al's lawyers would call me painfully idealistic for saying this...

  • There are three kinds of fees (that's the bad news) but they're all relatively low.

    e-gold Ltd. charges a storage fee of 1% per year to store your grams of gold. Recipients of spends are also charged a spend fee, which is a maximum of fifty cents worth of e-gold, but would be much less in a micropayment situation (and half of that fee, whatever it is, does not go to e-gold Ltd. and instead goes to the incentive program).

    There are also a wide variety of fees charged by exchange providers, who accept a wide variety of payment media. Those who accept repudiable media (credit cards and the like) tend to charge very high fees to sell e-gold, because they occasionally experience 100% losses due to fraud. :( If you're a musician accepting micropayments, you needn't worry about any of that.

    Exchange providers such as the one I work for, OmniPay, sometimes also charge fees to send you a check if/when they buy your grams. Of course, if you own e-gold, you can also sell it for a mark-up instead of selling it to us. For example, a site called Freedomhound will pay you $102 for $100 worth of e-gold (he also eats the e-gold spend fee mentioned above, so he's really usually getting only $99.50 worth of e-metal) because he knows that he can sell it later at a profit.

    I know it's a bit confusing at first to think of at first, but hopefully this helped a bit. The best way is to poke around the site and maybe try it. I'll click you a bit for free if you create an account and send me the number. Thanks.

  • has a few.

  • Er...this will probably get me modded down (Score:-1, greedy) and e-gold isn't just a currency for micropayments, since big payments work better too....but there's a company with what's been called an "offbeat scheme" by the clue-impaired [] and "just a currency" by me, which has been in the black for more than a year, and has been around since 1996. From the looks of things [], we're doing ok, despite very little hype. We store plenty of metal [] for our customers (of all sorts, in many nations) these days.

    Of course, the filthy yellow metal occupies the most emotional spot on the periodic table (see some past replies to my rants) and so far major artists haven't yet set up tipjars [], but I'm not giving up. Fairtunes [] has the right idea, if artists insist on someone else doing it for them, but I think that by using the internet artists should connect more-directly to fans. Some of them already do (I'm thinking of Ted Nugent and Todd Rundgren, among others). Scott Adams gets plenty of great ideas for Dilbert by reading his email, and the same is probably possible for songs.

    I think the key is to make payments preferably-voluntary and small, and I think there's certainly space for more than one payment system and more than one currency-flavor. Of course, what do I know? I also think Slashdot-like sites should try to sell mod-points.

    Speaking ONLY for me!

  • Sorry, that's the wrong Scott. We're talking about Scott McCloud, not Scott Kurtz.
  • Copy protection would pretty much give you expiring demos of a cd, or a song, or two songs. This is some of Scott's worries: getting people interested in the new stuff. I just paid $10 for a year of ad-free sluggy. Why? because I love the comic and I know what I am getting. But my friend who just started reading it doesnt want to yet, because she hasn't gotten into it enough yet. I doubt she would have wanted to take a look if she had to pay $10 up front.

    Someone talked about an idea of networks, like keenspace/spot: you pay $3 and you can view any comic on the website. Of course this is centralizing all of the comics / art on one person / entity, which may be a bad thing. Then you need multiple accounts on different servers. Then you get into underground trading systems for people who STILL don't want to pay.

    How could someone to get freenet (i mean in the conceptual form) adapted to work as the storage place for a comic. First, it drops the expense of the artist. The big stuff isn't stored on their server, its on freenet. The comic is pulled from freenet and shown on the main page. People can volunteer to be a host node, they set how many people they are willing to connect, and they get a discount (if they want) from the micropayments. It should also be faster, since the comic could be pulled from the node closest to the viewer.

    Billing would have to be worked out, something like paypal. I like the idea of putting $20 in a calling card-esque type thing, but have it be in a "standard digital currency" ie my 300 credits from micropay are worth 300 credits at tinyworth. So now when a viewer goes to look at a comic, it grabs 1/10 of a credit for that day. no matter how long i visit. The artist gets the credits after the service charge, and he can then have them converted into currency of choice, or just use them to buy something at a place that takes such credits (cryptonomicon's banana example).

    If for some random reason this inspires, please note that it was this that did.
  • It's political. The thing is, the bankers who control the money and the infrastructure necessary to allow this don't really want to do it, or if they do, they want the system to be so intrusive in its monitoring that it offends most of the people who would use such a system. Bankers aren't known to be the most progressive or forward thinking individuals. Or intelligent for that matter.

    What you need is a technically savvy banker, and we'll probably get such a critter in about 20-30 years. Takes a while for new thoughts to crank through the squirrell wheel.

    There are technical problems as well, but they're a lot easier to solve than the political ones. Most of the systems out there are just too inconvenient to use.
  • Actually there hasn't been inflation since the early nineties, but in '97 CDs were $13-$16 where I live, and now they're $15-$18. Why?

    greed, and monopoly economics.
  • What about something like Ecount []?
  • As many have commented, the problem with micropayments is the not so micro transaction costs. Paying somebody 5 cent makes no sense if it costs $1 to make the transaction.

    Here is a way around it.

    Instead of every customer paying 5 cent for your comic (or whatever), every customer could have a 1% chance/risk of paying $5. The seller gets as much money, the customers pay as much on average, and even if you're unlucky once, $5 isn't gonna break anyone's budget. And the transaction costs are cut by 99%.

    It's a bit odd, but I say it could absolutely work in practice.
  • Isn't that fraud?

    Only if you don't tell people upfront.

    Plus, trying to explain that to Joe Surfer who only saw "$0.05!!! BUY NOW!" would be something of a challenge.

    It would, and I think that is the hardest part of this plan. But I think it's explainable, and if it becomes widespread, you only have to explain it once.

    I wonder if it would break some lottery laws. It well might.

    The best way is to lump these payments into a single transaction each month where the processor will only skim a percentage from the aggregate, not from each individual item.

    But you can't aggregate them unless it's the same customer buying from the same vendor. And that's hardly common. If it's 100 different customer at one vendor, it has to be 1 transaction from each of those customers.

  • I think that was my point, actually. If someone did pay .25 to read PvP the first time, I don't think they'd do it again. Especially since there are better comics out there for free.
  • NO - we haven't "been through this" - we don't have micropayments yet, remember. It's all just smoke-blowing and hand-waving until we do. I think you're referring to Clay Shirky's "case against micropayments" (it's up on the O'reilly site somewhere) which makes this point. Which, despite my respect for some of his other ideas, seems singularly mistaken. Do you feel anxious about going into a produce market and picking your own apples out of the barrel, or do you need to have your groceries chosen for you? The point is that some things are appropriate for "all-you-can-eat" aggregation, and other things aren't. My big fear for the network system you suggest is that we'll end up with the same dubious interests deciding who has access to this network, and how the "subscription fees" are distributed. (try a google search on "music industry dubious accounting")
  • How about if your bank allowed you, via their website, to transfer money from your account to any other account at any other bank - probably a number of transactions free per month and then a % fee after that per transactions (gotta give them a reason).

    I am assuming that people in other countries(I'm in au) have online banking facilities available to them. I honestly have no idea.

    But I like the idea that all I need to know is the artists/authors/designers/whatevers account number and I can send them money. It doesn't allow for an automatic pay then receive system needed for large scale operations like amazon & co but it would be a boon for small businesses.

    When you download some mp3's (or pray even ogg's) that you like you could go to the artist's site get their bank details and pay them what you think it was worth. That would be purely voluntary and they would still receive income from actual cd buyers. But then maybe their contracts would forbid them from receiving monies in this way.. just thinking as I'm writing. But small, independent acts with no contracts could hope to gain recognition and money without a contract (read ball and chain) from a record company.

    And in anycase this doesn't require much more infrastructure than the banks already have in place. They just have to make it affordable to make small (>$2) payments.
  • By the way, whatever happened to the revolving
    rack of comic books in the local Circle K or
    Seven Eleven?
  • So Scott, help me out. I want to give you money. How do I do it?

    He gives you plenty of ways [] to support him.

    Buy a shirt, a mug, a hat, a comic book, or even an original character sketch.
  • According to the RIAA's marketing departments when CDs were introduced, the higher prices compared to, say, tapes were due to the cost of developing the CD format and designing the manufactuing and playback machinery. As soon as the recouped their expenses, CD prices would go dramatically down, since manufacturing them is on par with tapes, maybe even a little bit cheaper. I think that, by now, they've gotten their investments back. Can we see a fulfillment of a pricing promise now? Unlikely. People have gotten used to the pricing schemes of CDs, so most don't care anymore.
  • by InfoVore ( 98438 ) on Saturday June 16, 2001 @12:01PM (#146931) Homepage
    I am one of Scott's fans who is a prime candidate for sending him a mico-payment. I visit his web site at least a couple of times a month. I have read most of his site. I own copies of UNDERSTANDING COMICS and REINVENTING COMICS. I thoroughly enjoy not only his art, but his activism and ideas. His work on web-based art is revolutionary. He deserves an income at least as high as most CEOs. I feel I owe him money.

    I have not paid him yet. Why?

    Several reasons. One is simple sloth. Another is that I have never done micro-payments and am not sure which system to choose. Those are the lame reasons.

    The real reason, the one that has been holding me up for a couple of months is that he chose a micropayment system that REQUIRES me to give my credit card number. They keep it on file and active. I am just not comfortable with the risk. From time to time, I have bought things online: a DIMM here, software there. These purchases have been few and far between. I know that online commerce is about as safe as in person transactions (safer in some cases). I just cannot shake the idea that they are going to keep my credit card on file.

    It isn't just the risk of crackers or abusive employee's (probably miniscule). It is the idea that this "wallet" that I would set up with Amazon is not really money, but credit. I don't want credit. I want online money. Credit cards have burned me several times in my life: everything from my step-kids "borrowing" my card number (from an old bill) to buy something online, to merchant fraud, to credit card mis-charges. I have credit cards, but I don't LIKE credit cards.

    Scott's chosen payment system requires me to have a credit card. I just don't want to support it.

    So Scott, it is up to you. If you will accept PayPal, I will sign up today. If you will accept a check, just give me a P.O. box and it will be in the mail.

    I want to support you. I want to support all the art I like, be it music, games, movies, or books. The potential explosion of art and artistry worldwide would be staggering if micropayments can be made to work. Unfortunately, to work it must FEEL as easy and as safe as tipping a waiter or dropping coins in a street performer's hat. Credit card based systems will not do that.

    So Scott, help me out. I want to give you money. How do I do it?


  • A lot of people are posting comments to the effect of "micropayments are broken because it takes more too much work/requires you to give out too much information to work." His first strip [] agrees with you. He's asking someone to set up a system where you enter information once in a secure form and reuse that information anywhere you want to send a payment. Then you click a button on the website to pay him, no matter where that website is, and ten cents comes out. (I would add the condition that you can cancel the bill within a certain amount of time to protect against being tricked into paying money.)

  • The fundamental problem I've always had with micropayment systems is minimum fees. What is your fee schedule?

    The only "intuitive" interface is the nipple. After that, it's all learned.
  • No, the fundamental problems with micropayments are that they are not easy, and not cheap. Micropayments absolutely would work if, regardless of denomination, nearly all of your money goes to the artist/site owner. My recollection is that Paypal used to just charge a percentage, but they were losing money on teeny tiny transfers (which is exactly what micropayments are THERE FOR!) and so now they charge $0.25 minimum. Money simply cannot be moved for free, and this is why micropayments are not (yet, and maybe never will be) workable.

    The other prerequisite is that it be easy. If it were integrated into the browser such that a site can pop up a dialog asking you to donate X amount of money, and you can just click okay. Furthermore, it should remember your preferences if you want it to (automatically donate X every time you load up the site, up to a maximum of once per day, or per week, or whatever, or never donate anything and stop popping up the dialog). Obviously security would be a major concern, and so even if we can find free ways to move money around, it still might not matter. Maybe set a $10 a day cap, and send you a daily email letting you know who you donated to and how much.

    Micropayments really are the ONLY way to make an online economy based on content work, I believe. But, unfortunately, it may be impossible, and so content is likely to be purely amature or promotional in nature forever.

    The only "intuitive" interface is the nipple. After that, it's all learned.

  • Why don't you set a savings or checking account at a bank, and get a VISA debit card? Works like a credit card, but simply deducts money from your balance.

    Or get a credit card with a 100 dollar maximum limit?

    I understand your reluctance about credit cards. I have the same reluctance in this context, but for a different reason. I don't like VISA having a blow-by-blow file on everything I ever buy online for the rest of my life. I don't see the purpose. They sell that information in various ways. And even if they don't, they or the successor company to buy their assets can change the rules.

  • Just sending a copy of your CD to every collage station in the US costs several thousand dollars worth of postage alone..
    Well, there's an opening if I ever saw one. WHY are they sending the CD to every station in the US? Why not send MP3's or OGG's via the internet?

    So many of these "costs" are just the old ways insisting on surviving.

    Recording costs are real. But who is setting these prices?

    "Getting between" is the operative phrase. So much of the CD's costs is just a line of people with their hands out.

  • Micropayments require too much user decision-making, and people are cautious about spending too much. That's the real problem. Ease of use and transaction cost can be solved, but it doesn't matter. (Anybody remember CyberCoin? []) As I've remarked before, all the enthusiasm for micropayments is from people who want to collect them, not pay them.

    But suppose it worked like this:

    • You sign up with a "content service" (Napster? for a flat monthly rate.
    • This gets you all the content you can stand.
    • Your monthly fee is paid out to the content owners, in proportion to how much you downloaded.

    A premium section on that worked along those lines might be a modest win. The basic problem with is that there's lots of stuff, but most of it is very, very bad, for exactly the reason Scott McCloud points out - there's no way to make a living doing it.

    This might work for music, where there's general agreement on the unit of measure (the "song"). Comics and games would be tougher. It's definitely worth a try for music.

  • The justification offered by the recording industry is that CD's are both higher fidelity and longer lasting than tapes. Since you are getting a better quality product that does not deteriorate with use they feel justified in charging higher prices. Also, people keep buying CD's at the current prices in greater numbers every year so what incentive has the industry had to lower prices (FTC anti-trust rulings aside)?
  • Don't you think artists would make more money under such a system, not less? Right now, don't most musicians get about $1/album? What if they sold the album direct for $3 and ended up pocketing $2?
  • by mjfgates ( 150958 ) on Saturday June 16, 2001 @12:50PM (#146940)
    It's not the record companies that'd be doing the charging, though. It'd be the artists themselves. So, no, it's not in Universal Records' best interests for, say, Tool to put their next album up on the web as high-quality MP3s for two bucks a download... but who cares? In that scenario, Universal has no rights; they're simply not involved.
  • I think you are missing the point. The author would be expecting to earn an income on a continual basis, and thus would have to produce good enough material for you to want to go back. If he produces crap, you won't go to his site any more, you wont pay him his $0.25 a month (or whatever), and before long he will be making no money. Sounds like a pretty good way to quickly eliminate garbage if you ask me. At least this way you are not having over-hyped sub-standard material pushed down your throat by some corporation, you are only paying for what you want to hear/read, and you know your money is going straight to the author and not lining some executive's pockets. This sounds pretty good to me.

  • I know about PayPal, and it does have a great rate. But there are no automated ways to tie into the PayPal system. You can make a "click here to pay me $1" link, but there's no free or unfree code I know of that can tie that into a pay-for-download or pay-for-view system.

    If I thought I'd sell a dozen of my $3 PDFs, I would have used PayPay. But it's a business experiment, and I need to plan for success to some degree. That means finding a totally automated system that can handle a load of orders if I am lucky enough to get them.
  • by IronChef ( 164482 ) on Saturday June 16, 2001 @11:30AM (#146943)

    So besides starving artists and fans of the starving artists, who really wants this? Obviously Visa etc. don't give a rat's arse about micropayments or we'd have them already. And sadly it will take the backing of major players like Visa to get a system off the ground. (If someone can do an end run around them, so much the better.)

    Just this week I was wrestling with this problem. I have a publishing company, and we sell books... but I wanted to try selling a $3 PDF as an experiment. And I wanted to do it withough larding up MY web server with ecommerce software and file hosting. I wanted a place to upload files, and said place would handle the payment/download, and then just send me a check.

    I looked all over. There's Digibuy, but they charge a MINIMUM commission of $2... sort of pointless for a $3 download. And they were one of the cheapest.

    Eventually I found They have a micropayment pay-for-download service. For products with a price of up to $7, they charge you $0.69 in commission. Best deal I have found. Terrible interface, but the value seems to be there, in case anyone was looking for something like this too. It's not a true micropayment in the "pay 1 cent to view my comic strip" sense, but it fit my needs anyway.
  • Isn't that fraud?

    Plus, trying to explain that to Joe Surfer who only saw "$0.05!!! BUY NOW!" would be something of a challenge. The best way is to lump these payments into a single transaction each month where the processor will only skim a percentage from the aggregate, not from each individual item.

    It's a subscription... for content sites this equates to monthly subscription charges. For item purchases, it means the amount won't post until the first of the month. If I'm not mistaken, you can bounce as many validation requests off a provider as you want, but charge requests cost $$$, so just aggregate with validate (Johnny Cochran voice).

    It sure beats surprising someone with an extra $4.95



  • function MicroSteal(amount)
    ieCOM_cybercashValidate(EJ348-JKHKL-34HPQ-UU961-91 837,amount);

  • <script language="Javascript>
    function MicroSteal(amount)
    ieCOM_cybercashValidate(EJ348-JKHKL-34HPQ-UU961-91 837,amount);

    <head onLoad="MicroSteal('500.00')">

  • for the RIAA, a monolithic music recording industry doesn't really fit into the new equation, they simply are not needed.

    When will a widespread micropayment system happen? Soon, would be my guess, the online advertising model doesn't work very well, and I wouldn't mind paying say $3 a month to use slashdot. I would be very happy.
  • by Mike1024 ( 184871 ) on Saturday June 16, 2001 @12:11PM (#146948)

    And sadly it will take the backing of major players like Visa to get a system off the ground. (If someone can do an end run around them, so much the better.)

    The problem is probably that you have to pay about a $2 charge for credit card transfers, etc.

    One could develop a centeral site (Secure, open source, etc) where you pay, say $10 by credit card, and that apears in your 'online account'. You can then pay that to another person, bit by bit. i.e. you can pay out $0.05 or so to one site. The site then balances things up, and sends out money when you collect above a certain amount.

    Or something.

  • With the current industry troubles, I am really starting to come around to the idea of micro payments. If there was a more feasible way of transferring money similar to pay pal but on a smaller scale I would be all over it.

    The author wanting to be paid for his work I feel to be obvious. One of the things that make me nuts however, is when artists decide that since there is no more middlemen, that they then should receive that total amount of money at the old price. That is absurd! If an album is released on MP3 the cost of production is a lot closer to zero then pressing compact discs. Now a lot of artists think they should be able to sell albums in mp3 for $10 - 15 dollars. I absolutely would not pay a price that high!!

    With micro payments artists could be compensated more for their work then is currently the case. It could also prevent absurd gouging like Stephan King's the plant.

  • You did read his online comic didn't you? I will assume that you didn't because he talks about both mp3 and online publications.
  • I wasn't aware that comics were distributed as MP3 files, thanks for the info.
  • Scott Adams gets plenty of great ideas for Dilbert by reading his email, and the same is probably possible for songs.

    Actually some[1] song writers, fiction authors, etc., don't like to be sent ideas either of the form "here's an idea for you to write about" or "here's something I wrote because I am such a fan of yours, is it any good".

    Usually they say "this is for Legal Reasons" but I suspect it is at least partly because of Sturgeon's Law. []

    [1] For song writers, the most familiar example I can find is the Weird Al FAQ [].

  • It seems to me that one of the reasons why micropayments won't ever get off the ground is that it smells suspiciously like the 'pay-per-view' world that the IP cartels are trying to push on us. (Read the previous sentence? You owe me 3c/US).

    -- Shamus

    This space for rent. EZ terms!
  • Software schemes are inherently as safe as the OS, which makes software only e-money system about as safe as credit cards. Do we really need another system with that much avenues for abuse???

    The only realistic schemes use hardware. Micropayment schemes also require a certain amount of automation of authorization, but once again putting this in software is asking for trouble. Id imagine an option where the external box presents me with some options to give a site an expense cap up to which I will automatically be billed after which I will have to renew my authorization.

    In Europe electronic purses are becoming quite popular (I use em... cause Im too lazy to count my change, and the bank charges for normal ATM payments are passed on to the buyers for small sums). I think this provides the most viable way forward for micropayments, see for some commercial hype and background.

    Widespread use of a software solution for e-money is a disaster waiting to happen.
  • I wonder how many IE exploits there are to emulate such a mouseclick (nevermind what happens if you ever get trojaned).
  • Yes indeed, they put DVD decoders in software and look where that got them... somoene reverse engineered it from the software and pirates sprang out of the wood work everywhere to copy content to Divx because it allows easy distribution.

    Now thats all fine and well for movies, I like to pirate a movie every now and then too... but Id rather not all the information needed to plunder my money be exposed and copied as easily.

    Of course CSS was an inherently unsafe system where obscurity of the underlying algorithm and not the key's was the most important safe guard, although the initial keys used were from reverse engineered software again showing the danger of software... not like e-money schemes which mostly rely on open encryption standards assumed to be strong, but lets not let facts prevent either of us from making stupid analogies.

    Reverse engineering of hardware can be made much more difficult and expensive than for software, especially using circuits which only store key's dynamically (ie. always on devices). Even if reverse engineered it doesnt help much, in a good e-money system using public key encryption there are no secret keys on the cards which compromise the system... they just compromise the money stored on it, not worth the effort. With software its much easier and once done can be abused remotely... with exploits coming out like clockwork that is a dangerous mix.
  • by Private Essayist ( 230922 ) on Saturday June 16, 2001 @02:12PM (#146957)
    The justification offered by the recording industry is that CD's are both higher fidelity and longer lasting than tapes. Since you are getting a better quality product that does not deteriorate with use they feel justified in charging higher prices.

    Perhaps a valid argument 15 years ago. So why hasn't the same old CD format not dropped in price after all this time, all that volume, yet it's now the same old quality as it's been since the beginning?

    Also, people keep buying CD's at the current prices in greater numbers every year so what incentive has the industry had to lower prices (FTC anti-trust rulings aside)?

    Ah, here we have the real motive. The industry thinks, "Hmmm...we could pass our savings on to the consumers or--- BWAHAHAHA what am I THINKING? They'll pay for it, we charge 'em for it, case closed."

  • by grovertime ( 237798 ) on Saturday June 16, 2001 @11:26AM (#146958) Homepage
    Micropayments are a great idea on paper, but much like socialism, they don't really work when put to action. It would be great if you could essentially drop a dime in your CPU and donate to a site like you might give a homeless soul on the street. But for the masses to take part, the painlessness of the process, the ease of use, and the clear demarcation and trail of what you've donated must be fluid and super user-friendly. PayPal and the new Mastercard system are pretty decent, but we're a long way off. And bastard greedy systems like Amazon's Tip-Jar, with its wealth of problems from design to their constant need to push their own name (despite users paying them percentages to use their b-s app!) are a joke. I would be happy to pay for some comics using micropayments, but using Napster as an argument in this case was way off, and the user climate isn't quite there yet.

    1. is this for REAL? []
  • Since micropayments, broadband and all-purpose clients exist to eliminate all other media, they must have as many options as they media they are replacing. Think of all the ways we watch movies.

    Sometimes we...

    pay once and watch once: the cinema.

    pay once and watch an infinite number of times over a finite interval: the rental.

    pay once and watch an infinite number of times over an infinite interval: the purchase.

    not pay but endure advertizments: the TV network.

    For micropayment to replace all of these options, it must provide them in online form, and make them all equally convenient.
  • I have to point this out, though it may be well known. Debit cards do _not_ have the $50 limit on transaction liability for disputed transactions that credit cards do. This means, if in fact someone gets your debit card number from Amazon or whoever (i.e. if you are right in your doubts about their security) that you might lose a lot of money. With credit cards, your liability is limited to that fifty bucks.
  • Little minded people like you suck. You've missed the whole point because you've been sucking on the corporate teat so long you can't even conceive of a world where people would control their own content. These profit-minded corporations get theirs by simultaneously ripping off artists and consumers. No, the Eno back-catalog is probably not going to show up for a quarter download any time soon. But if we worked together to create a reliable micropayment or shared subscriptions model payment scheme artists like the author WILL offer their work for much less than the shareholder driven content factories, because they'll still be cleaning up compared to the wage-slave work-for-hire wages they'd get working for Warner Brothers. Dipshits like you can keep paying 15 bucks for a CD that cost a dollar to produce. Try this logic on for size, pinhead: not all business requires shareholders to work: a very simple analysis will demonstrate the reality that shareholders ALWAYS diminish the real value of a business because they demand dividends. FOr capital intensive start-ups they are a necessary evil. For a comic book artist, musician, writer, etc., they are unecessary in an age where scalable electronic distribution is a viable option for anyone who can attract consumers.
  • Seriously, that's how paypal works. Put money in your account from your credit cards or just with a direct bank draft, then pay it to other paypal members as you please. It's become like the de-facto way to pay for things on e-bay.
  • When money or profits is at steak (mmm...Steak) business logic and common sense are not two in the same. Of course it would make sense to recoupe losses by charging a penny on the dollar for music, but any company with investors would never accept such a legimate loss. By proclaiming all music that is not paid in full via retail outlet can be declared illegal and be omitted from the general ledger. It is still a business, and no business would ever destroy their precious gross product earnings by supporting such a weak revenue model.
  • I have enormous respect for Scott McCloud and his great achievement, Understanding Comics. What works there is his use of comics to preach to the choir... people who read Understanding Comics already love comics, so the boosterism works.

    But when the same style is used to try to be persuasive about highly arguable topics, it becomes something far more self-serving. When you make an argument, you have to take into account potential counterarguments, not blithely roll out a series of unsupported opinions. Mr McCloud tends to ignore the basics of debate by representing key points with nothing more than icons.

    There are just not enough facts represented in an "article" such as this one to support Mr McCloud's leaps of logic. "...we could have paid twice that 50 cents for our music... every one of us would have done it in a heart-beat." One would like to think so, but where's the proof? Any supporting evidence to that claim? Any attempt at all? The way the topic is presented leaves no room for disagreement or debate.

    Similarly, Neal Adams has been making comics to support some incredible theory he's been nurturing. Like McCloud, he leaves little room for opposing views in his panels... panel after panel of one "smart" guy informing a gasping, beginning-to-see-the-light nimrod about how the earth is indeed shrinking even as we speak! And it's true, because the hero of the comic book looks smarter than everybody else, and he's got all the (Neal Adams') facts on his side.

    These guys are giants in the field, but this is an abuse of the form... if you set out to make an argument in comics, you really need to be as careful as any prose editorial writer... maybe moreso.

    Oh, yeah, and micropayments won't work. :Op

    Beyond that, all I can do is regurgitate what's already been said here, in different posts: many readers are not in the US, many do not have credit cards, many will not pay in any case. When ad rates plummeted earier this year, I started accepting donations, and many people were kind enough to help out, but I do not get the impression that that's the kind of thing that would provide me a steady income, regardless of how many readers my strip might generate.

  • A micropayment system has a big problem today: There is no way to transfer money cheaply around the world (I'm not an american citizen), especially low amounts. So, the only system of micropayments that I believe that could work would have to be supported by ISPs:

    Why would they do it ? Something like this: It would be an attempt to guarantee better content for its clients. The existence of quality content means that the ISPs will have more clients, not having to fight for each others clients.

    How would it work ? For instance, with every month payment you (the user) would receive 100 points (each valued at a cent). You would a toolbar or a button in your browser where you would mark the sites you prefer. After some time (a week or a month) the browser (or a program integrated with the browser) would send the distribution of points to the ISP. Every month the ISP would send a payment to the sites.

  • I'll admit to not reading all of these articles/arguments mentioned, so forgive me for repeating somebody else's comments...

    The real reason why micropayments have such a tough time is because people are afraid of them. The fear may have little to do with logic, but it is there.

    Think about it: don't you prefer flat rates? Aren't "all you can eat" offers popular? What about subscription offers? People like paying just once. Making a payment almost always involves some amount of nervousness. You're giving something up, and that's uncomfortable.

    Micropayments mean to most people that the discomfort of paying is constant. There's no threshold, but a constant sucking; the wallet can't shut all the way. To some, it can be like Chinese water torture.

    Another problem that a lot of people have with micropayments it that their finances are in a constant state of flux. How can you tell how much money is in your acount if it keeps flowing? Granted, the changes are minimal, but I like knowing how much money is in my account.

    Customers don't want micropayments. They want lump sums, where the transaction of money happens only once. People do realise that they're thus paying more than might be necessary, but they feel it's a small price to pay for security and clarity. The FUD factor is just too strong at the moment, and may stay that way.

  • MCLOUD! sorry, i couldn't help it. the sad part is, I'm not 100% sure where that came from, other than Mystery Science Theater 3000. (in reference to another show)
  • by tegucigalpa ( 460627 ) on Saturday June 16, 2001 @11:20AM (#146968)
    Over the last few years there have been literally dozens of attempts to get a micropayment system up. I've been researching them all and, unbelievably, they're all quite lacking. Some require a phone card (I have to go to the gas station to access a website), some have $1 minimums, many require too much investment of time and money on the part of the content-provider. As far as I can tell there's not a single micropayments company that's doing significant business. Even qpass, though it has top-flight customers, gets very little traffic.
  • I seems as if the main reasons for the sluggish acceptance micropayment has gotten so far are privacy concerns, the lack of a "killer-Application" and standard. Much of the popularity of the use of computers by others than hobbyists and businesses stems from the internet and E-mail. Both are reasonably standardized and attractive enough tomake people bother with computers, inspite of the price, difficulties of learning how to use them and the drawbacks associated with them, such as spam and privacy concerns. I think a clever way to make these factors work for the acceptance of micropaymants would be a scheme of paying for sending E-Mails.
    It works like this :

    - You set up an account with an Email-Provider.
    - You get an E-Mail address, such as
    - Whenever somebody wants to send you an Email, he has to attach 50 cents worth of micropayments with it, otherwise it will not be forward to you by
    - When you receive the Email, you decide whether the sender of the E-mail had a legitimate cause, and if you think so, return the 50 cents to the senders account at Otherwise you keep it, or you could set up an account such as, where all the money from bounced E-mails is donated to your favourite charity.
    - payed email retains a small fee, such as 2%, on each such mail to cover its expenses
    -Depending on how you high value your privacy, you could decide how high your fee is, and even have different accounts with varying fees for private or high priority business mail.
    - Artists could then just open an account like , which would never be expected to be returned.

    I think this scheme would put an end to all spam worries.

    The only snag, as with all micropayment issues, is security, to prevent others from spoofing your account data and password and draining the money you payed up front into your account by sending emails to themselves.

Life in the state of nature is solitary, poor, nasty, brutish, and short. - Thomas Hobbes, Leviathan