Fame vs Fortune: Micropayments and Free Content

September 13, 2003 5:52 PM

Scott McCloud and Clay Shirky are trading ideas on Micropayemnts again. Clay Says user-pays schemes can't simply be restored through minor tinkering with payment systems, because they don't address the cause of that change -- a huge increase the power and reach of the individual creator.. Scott Says micropayments, well, BitPass are here to stay this time.
As a content producer I like the idea, but as a content consumer I'm just not sure yet.
If mefi went Micro, would you pay?
posted by Blake (28 comments total)

Considering everyone gets fucky ducky bitchy when asked to free register for the NYT, and the whole google ads debacle, I'd say no.
posted by Stan Chin at 6:14 PM on September 13, 2003

The reason I have an issue with Scott McClouds micropayment strategy is that it costs 50 cents to view one of his comics. If I remember correctly, wasn't he talking about micropayments around 10 cents in his book Reinventing Comics? Of course, if you don't already know Scott McCloud is an excellent artist and I feel his work has value, but I don't want to pay 50 cents for a click through.....

Oh yeah back to the point. HELL NO YOUR NOT MAKING METAFILTER "MICROPAYMENTED". Over my dead body.
posted by Keyser Soze at 6:26 PM on September 13, 2003

fucky ducky bitchy

no, stan. no. absolutely not.
posted by _sirmissalot_ at 6:39 PM on September 13, 2003

Pay to get abused? I don't think so.
posted by Fupped Duck at 6:47 PM on September 13, 2003

And yet NYTimes.com has more than 10 million registered users and over a million unique visitors a day....

Shirky's right that free is here to stay, but that doesn't mean there isn't room for micropayments as well. I definitely buy the vision -- imagine if everyone had a micropayment account, and the implementation was painless. Using just the one account, you could buy a song or video or original movie or ebook or what have you directly from its author or creator, just by visiting their website and clicking 'OK'. If such a system were in place, it would be economical to charge pennies for certain kinds of content; the market would determine what actually worked and what didn't, but it'd be really surprising if it didn't work for at least some kinds of content.

The question is how you get there; what will it take for a large enough number of consumers (and a large enough number of content producers) to adopt a micropayment system? My guess is it would take the release of some really desirable work, created by someone people think deserves some good fortune (i.e., are only happy to pay directly), but, well, who knows.
posted by mattpfeff at 6:59 PM on September 13, 2003

What it would take, actually, is a common host that could support and introduce the new technology to the masses. PayPal got its start as the market of buyers and sellers on eBay demanded a way to use and process credit card transactions as payment for auction wins. If micropayments were to become a featured technology on a popular and generalized website - Yahoo, for instance, or even Lexis-Nexis - it would take off. Conversely, scores of individual narrowcasting websites couldn't promote the technology nearly as widely or efficiently as one major website with millions of users.
posted by PrinceValium at 7:12 PM on September 13, 2003

Micropayments have to be seemless and small, very small — in the 5–10¢ range — for them to work.

You can't be forced to make a decision every time. Micro-payments will work when they have it down to a process not unlike phone minutes... when the cost is low enough not to be a hurdle, and there's only a one-time hit to your time.

If I could sign up once, and pay a .10¢/click, I wouldn't think twice.
posted by silusGROK at 7:13 PM on September 13, 2003

No, I wouldn't. Not because I don't use the site much, because I do, but because I'm sick of the general trend on the net of sites started to serve a community or subculture or create one (as metafilter has done) moving on to charge users for the privilege of using something created for them.

I see it like one of the kids on the block making a treehouse hut for everyone to hang out in starting to charge money for it a couple of months down the line. Maybe I'm idealistic, but I would hope that all sites created with a community in mind would stay that way. If, however, costs meant that the site needed support, I would much prefer hearing the author or creator posting the costs of running the site and adding a donation button to each page. It would work for me, I guess, but I'd assume there are people out there who would prefer the micropayment option or a paid registration. I see the whole payment thing as something to be avoided, though. It cheapens the whole site.

One last analogy;

I would compare the paysite to an underground magazine, not of a high enough quality to be popular enough to support itself with adverts alone having to be sold rather than given away. Payment cheapens the site and I see it as the wrong direction, rather than increasing the quality to get more users and therefore more ad revenue, the sight of authors constantly pulling out a money-grabbing die hard capitalist image (not saying that is the case) cheapens the site and drives away users.

As the title says, fame vs. fortune.
posted by Dillonlikescookies at 7:24 PM on September 13, 2003

And some of us don't use credit cards-I pretty much am shut out when it comes to paying for any content on the 'net. (I have good reasons for not having a card, so don't tell me to get one.)
posted by konolia at 7:37 PM on September 13, 2003

One problem I see, is that for micropayments to work, they are necessarily going to have to be based on a monopoly. There will have to be one website (like BitPass) that everyone on the net is signed up to, in order for it to be truly seamless and easy. No-one is going to want to give their credit card details to a dozen different companies, all running different micropayment systems. On the other hand, having one company running everything leads to a lack of competition and a high risk for both producers and consumers (as PayPal has shown).

The only other option is for banks themselves to agree to an international standard method for micropayments on the net. Some system whereby if you want to make a micropayment, it's handled through your own bank, similar to EFTPOS. I can't think how this could work though. It would either have to involve some kind of software on your PC (tough luck, Linux users) to handle the micropayments to your bank, or it would still have to involve a central server that hands your payment over to your bank.

It is a great idea to try and establish some kind of internet currency, whereby you can fill an account with credit and spend it on micropayments. I just don't know if businesses like PayPal and BitPass are stable, tusted, professional and mature enough to handle that kind of responsibility.

On preview - Yes, konolia, that's another great point. Not everyone has a credit card. Another reason for micropayments to somehow work as debit from your bank account.
posted by Jimbob at 7:43 PM on September 13, 2003

Here's the thing. You pass a busker who happens to be singing in tune, a song you like, and has some talent. You dip into your pocket and, since courtesy dictates that Thou Shalt Not Give Buskers Copper Coin, you toss him/her 50p. (Because most people who give to buskers are worried about appearing tight.)

Now, were the busker to stop after a couple of bars and request 50p to keep singing, the instinctive response is to say 'fuckit' and walk on.

when the cost is low enough not to be a hurdle, and there's only a one-time hit to your time.

But doesn't that bring up Clay Shirky's point, if I read him correctly? That the lower the cost, the more a hurdle it becomes, because it hurts our brains to work out whether something is worth a small value? We can cope with paying, what, 60p for a newspaper that gets left on the Tube once the crossword's done, but ask us to pay 0.6p for an article, and it fires off all sorts of synaptic short circuits.

Web content is a service, not a product. And people simply cope better paying more for accumulated services with built-in redundancy, or for open-ended access to services, than on a piecemeal basis. That's why so many stump up hundreds per year for gym memberships that they don't use, rather than paying per-visit. Yeah, they might say to themselves, 'Dear God, I wasted a month's wages on that fucking thing, and I'm still a flabby wheezing wretch', but the usual outcome is that they'll pay the next year's dues and promise themselves to go more often.

That reminds me, actually, of the insidious way that Murdoch's minions have pushed the idea of pay-per-view for the BBC, knowing that people will sigh and cough up £120/year for the licence, but wouldn't pay the equivalent 34p/day or 1p/programme. I'd try to remember all the theory of opportunity cost, but I can't be bothered...
posted by riviera at 7:52 PM on September 13, 2003

Salon can't even convince people that it makes sense to view a free ad. People aren't going to feel "better" being forced to pay a little bit constantly rather than a lot annually.
posted by XQUZYPHYR at 7:55 PM on September 13, 2003

If I could sign up once, and pay a .10¢/click, I wouldn't think twice.

...but I bet after a while you would. My hunch is that eventually most people would start to think "Jeez, how many of these 10 cent things have I clicked on? How much have I actually spent?!"

The payments being small makes them more approachable. But it'd be hard to shake that nagging feeling in a micropayment economy that you have lost control, and that you never really know how much you have spent or where. I don't think people are used to keeping track of hundreds of little payments. If they have to pay at all, people seem to almost always prefer a lump sum for unlimited access.

It might take a generation or two of folks to get over the old way of doing things. For now I think people are going to identify too strongly with the old phrase "nickeled and dimed to death".
posted by stevenf at 7:59 PM on September 13, 2003

konolia -

get a credit card.


I kid because I love

But seriously, I wouldn't pay for a micropayment plan because, frankly, I can't afford it. So, if metafilter went to a pay stystem, then it would lose at least 1 member. But I'm guessing I wouldn't be the only one to leave.
posted by Stynxno at 8:42 PM on September 13, 2003

i support free information on the web. but as for content i pay for, i'm worried about things. namely, i'm annoyed at the clear-channel time-warnering of movies, music and popculture in general. it's increasingly obvious to anyone that the web's one of the few proven distribution models that someone can gain an audience without the help (and censorship and creative-restrictions) of a giant corporation that ends up owning the content once things are finished. micropayments are a nice way to keep people and their creative property free from corporate ownership, because they can keep their stuff on the web and still make a little money or so. i'm talking about things we all agree is worth paying for, entertainment like music and film, comics etc.

i think the main argument for this bitpass thing is that some of the stuff it's offering through its service is completely worth the $ ...i plunked the three bucks for a bitpass card just to check out scott's 25¢ story, but also just assumed some porno or something would show up later for me to spend the remaining $2.75 on the card. the list on the bitpass featured sites just kept on growing with awesome shit tho. and before i noticed i've spent through my three bucks.

here's what i've gotten through bitpass

scott mccloud's right number - 25¢
and then

comics
a dog and his elephant - 50¢
this thing is pretty strange. i got hooked on the free preview, if it's your thing you'll get hooked too. funny and bleak - by the same guy who did this

trunktown - 25¢
tom hart is awesome. this is a collaboration he's working on. daily strips, a lot of charming comics for a quarter

i picked up four batboy the musical songs for a quarter a piece

and then i killed the rest of my $3 card off on this darling toy.

not a bad bunch of stuff for a very little amount of money.
i think this is what people like myself who are excited about micropayments are enthusiastic about. it's not that the web is becoming sold-out, it's that it's finally developed to a point where it is making solid incredible work and we can keep these things on the web by spending -such- a small amount of money.

i hope the bitpass list continues to grow. i love everything i've bought so far, to be honest.
posted by Peter H at 8:56 PM on September 13, 2003

I don't have a data account for my Treo phone/PDA, which means that Sprint charges me $0.01 per kilobytes to view webpages. That translates to about 15 cents per MetaFilter page when I'm on the road. At that rate I don't read MetaFilter on my phone very often (although the WAP version kicks ass).

Those few cents here and there really add up. If I had to pay even a few cents for the *all* stuff I visit every day it would radically change the way I use the Internet.

I'm betting that people would look for free options if they were forced to pay. Which is bad for people who build something cool and want to see some return, but good for people coming up with new stuff, and for us who want it all free.

On the flip side, many of us here contribute free content and resources to the Internet. Maybe we should think of it as a barter arrangement rather than a bunch of moochers.
posted by y6y6y6 at 8:59 PM on September 13, 2003

What this offers, essentially, is an alternative to other ways in which the content is paid for, since there is no free content (or pretty much anything else).

Right now the choices are:
1. Advertiser supported - see the upper right hand corner of this page you're reading "for free").
2. Volunteered resources - i.e. someone with a JOB, trust fund, school loan, etc. is subsidizing it. Or the government, or other charity.
3. Bulk-payment as in portal membership (AOL, etc), or bandwdth-access channel payments (DSL/Cable).

That's IT. So if you're an independent content creator, you either trying to become UN-independent by hoping to do a deal with some sort of publisher who WILL charge for the content, e.g. in the form of a book copy, or you get off on fame while being otherwise supported by mommy and daddy.

Or you can sell your stuff with BitPass.
posted by reality at 9:31 PM on September 13, 2003

People aren't going to feel "better" being forced to pay a little bit constantly rather than a lot annually.

I'm going to note, and contradict, my own comment now, because this just occured to me: in this country we actually DO pay constantly to alleviate paying a lot annually: it's called income tax.

In fact, one might consider sales tax a form of compulsory micropayments. Which, if you consider how much nicer Canada is social-service wise in light of a vastly higher tax rate for everything, offers some validation.
posted by XQUZYPHYR at 10:03 PM on September 13, 2003

Web content is a service, not a product. And people simply cope better paying more for accumulated services with built-in redundancy, or for open-ended access to services, than on a piecemeal basis.

This is very true of much web content (and of people, the latter part). Micropayments could still work very nicely for content that has unique value to consumers, however -- this is McCloud's "art is not a commodity" argument. Micropayments won't be a generally good way to purchase access to the newspaper, but they might be very good for purchasing content that we do tend to consume piecemeal. And they might serve very well as a supplement to subscriptions to web services, the way NYTimes.com sells access to archived articles right now. That is, a consumer might not want a year's subscription to Wired, but happily pay $0.50 to read an article about a particular hobby of hers, or to read an article on the recommendation of a friend (or even a weblogger...).

It's like McCloud says -- this isn't an either-or situation; there are advantages to free content, to micropayments, and to subscriptions. Unique web content has a real value, but it doesn't necessarily indicate the service that provides it has an ongoing value, so it's best sold in discrete pieces, not via subscriptions. And web content is cheap to produce and distribute, so it makes sense to sell it cheaply; and a convenient, painless payment system is essential for any large quantity of sales (which of course is the advantage of this whole Internet thing). So micropayments seem only natural, in that context.

What's more, Shirky's dreaming if he really thinks everything on the web is going to be free forever; some content providers, like the New York Times (for example), really do have a unique offering that people will be willing to pay for if they have to (though personally I think the Times is better off leaving its doors open, enabling web users to email and link to and generally propagate its content for it, but then I'm still outgrowing my idealism, I guess). Subscription services are the natural way to sell access to that type of content, yes, but if there exists a means of cheaply and easily selling access on a one-off basis, then that would offer real value to both content providers and consumers: Content providers could better profit from those occasional items they produce that appeal to a broader audience, and also attract new subscribers; and consumers could access those occasional pieces, and explore services they'd consider subscribing to, without paying for a subscription up front.

Micropayments won't work for everything, but it seems like they'd be really great for some things.
posted by mattpfeff at 10:36 PM on September 13, 2003

I find it difficult to disagree with Shirky. He sounds like he knows what he's talking about in this article. However, we currently have a micropayments scheme inbuilt into our mobile phones, and it appears to be working. 6p to send a text message. No problem. £1.50 to make your telephone sound like the latest Atomic Kitten song. No problem with that either. People can be made to forget that they are paying for content, and in this respect, micropayments on the internet must be able to be made to work.

Shirky concentrates on written (and drawn) content, and I have to agree that micropayments are likely to fail within this context.

Strangely, even though I wouldn't pay for a subscription to Metafilter, I have (a) paid to become a member and (b) paid for textads. I've done both of these because I like the site, and I want to contribute to its continued existence. But I wouldn't pay for a subscription. Weird.
posted by seanyboy at 12:24 AM on September 14, 2003

"Scott Says micropayments, well, BitPass are here to stay this time. As a content producer I like the idea, but as a content consumer I'm just not sure yet."

Sure, given a large enough potential audience and enough promotion for any given site, you could make have a "micropayment" system for your site that makes money...

But Scott is still on the wrong side of the issue, because ultimately, "free" services are more viral.

A good example of this are weblog services. You can use Blogger or LiveJournal (assuming you get an invite code) for nothing. Still, amazingly both services still make money and have really nice growth rates, in part because I can point you to the site and you can actually start using it today, no money down. Still, given the chance, a substantial amount of people will pay for extra features; more than enough to make a successful business.

It's a very telling fact that now that Google owns Blogger, they've actually started giving away features that they previously charged for, and have stopped offering Blogger Pro.

What You say? Are they crazy?! Not really, because there are a lot of business models they can use to support themselves with besides using a "paid service" model. Google doesn't charge regular users for its searches, and they seem to be doing well enough...

What they are doing essentially is making Blogger the defacto weblog application, thereby controlling the eyeballs of their audience. And once you have someone's attention, there are no shortage of ways that you can make money off of them, or leverage their attention to get someone else (say, a business customer) to pay you money.

Blogger (and Google) both know that ultimately they are competing against "free", so they're free themselves in order to have the biggest, most popular services of their kind in the world. ...but trust me, there *is* money being made.

So, yes, Scott Mc Cloud can sell comics in his little balkanized corner of the internet, and he will make a bit of money at it because he's a good comic artist and good at promoting himself, but generally only those who are willing to pay for his service will bother to tell you about it.

Meanwhile, most artists can't even get enough people to look at their work to have a big enough audience to make a living from. However, if you're talented, you can be a poor, struggling artist selling your art on the street, but if enough people find out about your website, you could find yourself rolling in the dough.

As an example, many of LiveJournal's most popular RSS feeds are of comic strips. Most are scraped, frankly, but if artists made a point of realizing that their work will either be widely available and scraped, or narrowly distributed and locked up, they would realize that the 3rd choice -- controlling how they choose to give away their work -- is by far the best. They could create their own feeds and add a link to their merchandise or an online tip jar, for instance.

I think a lot of artists will make it big out there. Tatsuya Ishida of Sinfest fame, for instance, has the skills to be really big. The question is how they will leverage their eyeballs and the significant interest in their work in order to break through.
Frankly, I think Scott McCloud's model for a centralized, locked up comic archive isn't that great an idea, but one model that might work better as a hub for indie comics is something more like Salon's business model... free, with ads, paid without.
posted by insomnia_lj at 3:35 AM on September 14, 2003

Shirky's right on every point, but there's a simpler version of his argument: if micropayments could be made to work, the porn industry would have already done it.
posted by fuzz at 6:33 AM on September 14, 2003

I just wonder how much Shirky would need to make a point against people finding a sense of economic survival from the Internet if he was a working/starving artist instead of a ranting cynic. The only commodity he seems to have that's valuable is his ability to dismiss things. I certainly wouldn't pay to hear someone bitch or moan, so his model of fame v. fortune works great for him.

However, if he made art or music or something that is valuable to culture, I think he'd think/rant differently about how the Internet is growing and maturing into helping people grow their own legs for survival. I mean, isn't that exciting?
posted by Peter H at 8:50 AM on September 14, 2003

However, we currently have a micropayments scheme inbuilt into our mobile phones, and it appears to be working. 6p to send a text message. No problem. £1.50 to make your telephone sound like the latest Atomic Kitten song. No problem with that either.

The big difference is that it's basically 'single-biller'. Now, if ISPs were to get into the microcontent business, things might get interesting. (I was watching the BBC news channel late last night, and it ran a piece on the French Minitel, which has been running for decades: it's been able to offer microcontent and all sorts of booking/billing services, because it's all done by France Telecom and added to the phone bill.)
posted by riviera at 10:05 AM on September 14, 2003

The bandwidth problem is a technical issue, and should be solved via technical means. There are millions of computers on the 'net with plenty of bandwidth, many of them operated by people perfectly willing to share their resources (witness seti@home, the rc5 project, napster, kazaa). The micropayments model brings along the old economy's notions of centralization and control, adding a whole new layer of complexity and restriction to the internet experience. Why not just apply the peer-to-peer filesharing model to the web in general? It wouldn't work for everything, of course, but "content" of the sort McCloud describes is generally static: audio, video, text, or some combination of the three, and as such is perfectly suited to caching and redistribution.
posted by Mars Saxman at 10:33 AM on September 14, 2003

"I just wonder how much Shirky would need to make a point against people finding a sense of economic survival from the Internet if he was a working/starving artist instead of a ranting cynic."

Oh please. I know Clay, and he's not a cynic. He just does his best to explain how the web works IRL. He is hardly skeptical about the prospects of creative people making money on the Internet either, but if they really want to do so, they should try to understand its realities.

First off, I am uncertain whether Scott Mc Cloud's business model could or should really be called "micropayments" as they aren't all that micro, nor is the "meter running". Still, despite that fact, I don't think Clay would ever tell you that you couldn't get thousands of customers to pay for a service that they find valuable. What he would tell you is that micropayments ultimately don't work because the decision factor that goes into making a $100 purchase is still there when you make a 10 cent micropayment, and that people inherently don't like it when "the meter is running"... they prefer paying one fixed price if they must pay at all.

Does that mean that you flat out can't make a buck with micropayments? No. It simply means that the very nature of micropayments (locked up content that nickels and dimes you) doesn't work well on an Internet where more is being made available for free everyday.

In the same way that the internet routes around censorship, it also routes around ownership. Anything that people truely find "of value" will be made available by someone on the Internet, free of charge. We've seen this in the past with pirated software and mp3s, and we're starting to see it with comics with scraped RSS feeds and fansites.

Clay isn't saying to give up on the idea of making money for your work. He's simply saying that you should consider a business model where you give away your work for free in order to get the "fame", while ideally finding other ways to use those eyeballs to make your fortune.

He is absolutely correct about his core assertion though -- in the long run, micropayments don't work, not because you can't make any money whatsoever off of them, but simply because other options work much better.
posted by insomnia_lj at 1:50 PM on September 14, 2003

That's why so many stump up hundreds per year for gym memberships that they don't use, rather than paying per-visit.

No. People pay that amount because the smarter gyms do not offer a pay-as-you-go plan. If they did, they'd make far less money, as gyms are literally banking on impulse and good intentions to override a rational forecast of actual use.
posted by Ayn Marx at 8:02 PM on September 14, 2003

I would not sign up for a micropaid Metafilter, because I read Metafilter too frequently for that to make sense. For me, in that case, a subscription model would work better.

However, there are plenty of things I'd prefer micropayments for. Songs, full-length comics, movies, TV episodes, academic/scientific articles, etc. Given the choice between paying a couple of bucks for a clean, high-res, replayable movie download and one from Kazaa, I'll pay. Same with music. I don't get cable TV because I don't watch enough TV to make it work it, but there are specials that I'd pay a small fee to download.

Just because micropayments don't make sense for every application doesn't mean that they aren't a useful, viable option.

Ultimately, "free" services are more viral.

Not everything is a service. Given a choice between free crappy art and good $.25 art, I'll pay. And damn, do I wish my gym offered pay-per-visit.
posted by blissbat at 8:17 PM on September 21, 2003