This is fine as far as it goes, but RPM on a blog post is what $1.50? $3.00? So to replace your ad revenue you need to charge 1/3 of cent, not the "15 cents" that was shown in the mock. That would be $150 RPMs which would make Google blush.
There is a fundamental disconnect in how writers value their writing, and how readers value their writing. Trying to understand the economic forces that drive information value will really help writers understand what is, and isn't, valuable prose to readers.
Too many people are stuck in the mindset of "buy a book/article" etc, but the web is 99.99% one and done. So nobody wants to pay 15 cents for something they will never read again, and may not even like the first time. But have them pay a third of a cent? Sure, if they go back an re-read it 100 time's they will have paid you 30 cents for it. The value would be emergent rather than demanded.
Until journalists can internalize that, this conversation will remain unresolved.
1. The RPM you posted is significantly off – at least according to the websites I operate.
2. The web is not "one and done." Successful websites exist because they have loyal readership that keeps coming back.
3. Say a writer spends 4 hours creating an article, and they're paid $100 for that article. (A pretty abysmal amount.) They would need 30k readers to pay 1/3 of a cent in order to break even just on the cost of the article. That is absolutely insane and impossible for most articles. Heck, even if the article cost just $5, they'd need 1,500 pageviews. This is outside of the realm of reality, and simply impossible for the vast majority of websites. If your numbers were the general rules, we'd be mostly reading $1 articles written in 3rd world countries, were people can live on $5 a day.
Jacob, you are conflating a couple of things in my comment.
So there is "RPM" for a web site and there is RPM for a web page. No doubt you run analytics on your site to track who goes to which pages and which pages generate the most advertising revenue. In my experience the "landing" page gets a lot of traffic, the "spokes" pages (typically branches to a bunch of related content) come next, and then there are the articles, some of which get a lot of traffic and some which get only a few page views a day/week. You also probably track dwell time so that you can recognize people who land on the page, probably from a Search engine result, and then "bounce" off because it wasn't what they wanted. Or stay and read. Or the unicorn of the bunch, stay, read, and then read a bunch of other pages.
I've also been an author in both the print and web world, my columns on JavaWorld continue to get page views and I continue to get various folks popping over to my poorly maintained web site to grab a copy of the sources. While I'm sure there are probably people who have read my BYTE and Dr. Dobbs articles that is harder to track long term.
The point being that I'm pretty familiar with the space and if you're looking for median values for revenue for a given article, its "large" and it became small enough to result in folks like Dr. Dobbs dropping out entirely. Web page revenue, which generally represents one article for a journalist, is "good" if it has $3 RPMs and that is super great if it is getting a lot of traffic.
Number 2, the web is often times "one and done" for articles, not web sites but web articles. So if you're a journalist or an author that has a loyal following, folks will come back and read new articles that appear, but they don't generally read the same article again and again.[1] Given that you're running a site, and no doubt you have analytics on that site, how many times does the same person come back to an article? What is the 25th, 50th, and 99th percentiles? If you're 99th percentile breaks 1.15 I'm going to be super impressed.
So lets unpack #3, the money shot (no pun intended)
Lets start with your writer who was paid $100 to create an article[2]. Setting aside the unreality of someone doing their best work in 4 hours, you have to consider how information gets "value" to consumers, there really is only a few ways, it's "rare" (which means few alternate sources), it's "timely" (which means alternate sources don't have it yet), or it's "enriched" (which means the information contributes to a bigger understanding). So how much value is your author creating here? Do they have the inside scoop on a big deal? Or maybe they are the first with the complete picture, or maybe they have been following a topic for years and can put it all in perspective for people just coming into contact with this thing or concept. That is what creates value in the piece. If they are paraphrasing an AP press release? (or any press release for that matter), or adding a bit of irrelevant trivia to a bigger story, or regurgitating something which has been covered by 16 other authors already in different ways, there is very little in the way of "value" in that writing.
Information can demand a price commensurate with its value. While people complain that the NYTimes is a "paywall" they have reached 1M digital subscribers today. Those are people who have paid them money because they expect the value of the information they will get out of the NYTimes will be high relative to the price.
So let us look a bit critically at your numbers. "They would need 30k readers to pay 1/3 of a cent in order to break even just on the cost of the article. That is absolutely insane and impossible for most articles."
Fred Langa, who was the Editor-in-Chief at BYTE advised me as follows when I wrote for him, "Chuck, the idea article for us would interest all our readers, but that only rarely happens, you should shoot for being interesting to 1/2 to 3/4ths of the readership." Their subscription base was a couple of million readers, so that was targeting 1.5M people.
There are over a billion people who use the Web today, a large fraction get most of their information from it. If you're unable to get 30K page views for an article, then I would suggest that either the information it contained was not valuable, or that nobody knew of its existence.
The second thing working in your favor today is that the Web never forgets. If you want to read an article of mine in BYTE you have either find a reprint or find some kind soul who has scanned it into the web. But if it was online to begin with (like my Javaworld columns) then people find them again and again and again. Some of those have over 5 million page views. And that is over 20 years. So you write something today, and then it can live forever for pennies a day (a Digital Ocean web server to serve it up is $5/month which can be amortized over all the things you are keeping alive on the web).
If you're going to write on the web to make money, make it something worthwhile to a million people. Not three or four thousand. If you are just passionate about something feel free to spend all your time writing about it, that is its own reward and any remuneration is just bonus.
[1] The exception for fan fiction is noted.
[2] I don't think that would be a particularly good investment in time unless someone was just passionate about what they are writing about.
> If you're going to write on the web to make money, make it something worthwhile to a million people. Not three or four thousand. If you are just passionate about something feel free to spend all your time writing about it, that is its own reward and any remuneration is just bonus.
Wouldn't that just create more content that appeals to the least common denominator? Why would you want to focus the efforts of a professional writer toward creating that?
A million people out of a population of 1.5 billion is 0.07% of the web population. In most places that is a very select group and not the common denominator. Something that is some times missed is just how big a group you can reach with the web. Finding all of them can be a challenge but such groups tend to self organize around seeds.
There is economic value in an article which acts as a seed to attract an audience. This value may not be fully reflected as a multiple of inbound page views, and may need to incorporate interactions among the self-organized audience and content that is "related" to the original article.
You misunderstand what was written. ChuckMcM was suggesting that most people only read an article once. Even if they frequently go back to the same website, they don't re-read articles that they've read from 5 years ago. That makes the economics different than buying a book or a magazine. People do save magazines. My dad saved all issues of Scientific American from 1949 to 2009, and when I was a kid I would read through old issues to get a sense of how science developed during the decades before I was born. Nobody does that with web articles. So the economics are different. You can become the owner of a magazine, but trying to claim ownership of a digital article is a subject of endless debates regarding copyright law.
As ChuckMcM said, the web is 99.999% "one and done". People read articles once and never go back. They don't want to pay for things, the way they might pay for things where they are actually gaining something on a permanent basis.
Actually, I have a fundamentally different perspective.
> They don't want to pay for things, the way they might pay for things where they are actually gaining something on a permanent basis.
The goal of good writing is, in part, to permanently change the reader. Even if they read it once. This is true of literary content, educational content, news content, and even entertainment.
But more than that, what good content does is establish a relationship that can be cultivated. Even if you read an article just once, it can become part of the greater relationship that serves a larger purpose. (Perhaps, educational, building towards expertise in a certain knowledge area. Or, perhaps, entertainment, where the reader can reliably expect a change in their emotional state.)
> My dad saved all issues of Scientific American from 1949 to 2009
Many of my subscribers save all of the emails I send them. How is that different?
> Nobody does that with web articles.
Have you never referred back to the same web resource? How many times have you viewed this discussion? Do you wonder why there is a "bookmarks" menu button on your browser? Have you ever emailed an article to yourself to read it later, or printed it out? These are all common behaviors.
Someone regularly comments on my Facebook article posts, saying "bookmarking", just so they can reference it later.
Ironically, I often email the same article to the same audience multiple times, and the readership rate remains high.
Yes, the web is full of low-quality content that degrades the reader, the writer, and the entire culture of the internet. Maybe that content earns 1/3rd of a cent per view -- and deserves it. But is that really what we want to be supporting?
Both ChuckMcM and I were remarking on how people actually use the Web, whereas when you write:
"But is that really what we want to be supporting?"
you are instead remarking about how things should be. Maybe there is some alternate universe where utopia has been established and people pay a lot of money to support good content. However, I would suggest that you read Clay Shirky's remarks on the death of print:
"When you have an audience mostly made up of nostalgists, there’s not much market demand for unvarnished truth. This kind of boosterism wouldn’t matter so much if it were only reaching weepy journos whose careers started in the Reagan administration. But the toxic runoff from CJR and Nieman’s form of unpaid PR is poisoning the minds of 19-year-olds."
There was a long time, during the 1990s and early 00s, when it seemed it might be possible for newspapers to gain revenue by publishing on the web, but we now know that is impossible.
See also "This is why the news media is dying: global online ad revenue is $40 billion"
Combine that with “Google Controls 44 Percent Of Global Online Advertising“.
That leaves at most $25 billion for every content site in the world. Pathetic. Consider that television advertising in the USA is $160 billion a year.
> Again, my comments are more about how people actually use the web, rather than how they should use the web.
Which is why I addressed each of your points, before adding a new point.
> whereas when you write: "But is that really what we want to be supporting?"
In this case, I was adding a new point.
People DO go back and engage with content more than once. The assertion that people don't do that is wrong. Your reply alone is evidence of that.
The additional point I was attempting to make is that bad content is "one and done." Not only does bad content leave the reader unmoved, it is quickly forgotten, usually anonymous, and does nothing to build a relationship with the reader.
I'm not sure why you bring up newspapers. 1/3rd of a cent for a newspaper article "view" is in no way sustainable.
The content on a comment page is each individual comment. Why would I come back to reply to a comment more than once?
As for newspapers: today's Sydney Mornig Herald is a few dozen pages, with multiple articles per page. Let's call that 100 articles (current affairs, technology, finance, sports). It costs about a dollar per day. So each article is worth about a cent, for a paper newspaper delivered to your house.
The same articles on the web at 1/3 of a cent each read doesn't sound beyond the realms of realistic pricing for a sustainable distribution.
Of course I would prefer to spend my money on a non-Murdoch paper. But that gets into politics rather than economics.
> As for newspapers: today's Sydney Mornig Herald is a few dozen pages, with multiple articles per page. Let's call that 100 articles (current affairs, technology, finance, sports). It costs about a dollar per day. So each article is worth about a cent, for a paper newspaper delivered to your house.
> The same articles on the web at 1/3 of a cent each read doesn't sound beyond the realms of realistic pricing for a sustainable distribution.
That demonstrates perfectly how the micropayment model is fundamentally different than the subscription model.
The assumption with micropayments is that you're paying only for what you view – not for everything the website produces.
With a subscription, you're paying for everything, whether or not your read it.
Say you 10 read articles in the paper each day. That works out to $0.10 an article, not $.01 an article, if you're being charged just for what you read. A huge difference. $0.10 would possibly be sustainable for micropayments, especially if you guaranteed the publisher a minimum payment each month. 1/3rd of a cent is simply out of the realm of reality – unless you're agreeing to pay, in advance, for all of the articles they produce. In which case, I don't think you're talking about micropayments anymore.
> People DO go back and engage with content more than once. The assertion that people don't do that is wrong. Your reply alone is evidence of that.
I would like to see the the empirical support for this.
Indicated by data collected from advertisers, internet content consumption is driven largely through social media platforms and mobile direct messaging. Shareaholic's report from the beginning of this year [1] indicates Facebook drives a quarter of hits to sites.
Social platforms and mobile applications thrive on new content. If people are getting to their content through social / mobile apps, and those places maintain eyeshare by presenting fresh, new stuff, it would lead that those platforms de-emphasize old content, not pushing users to return to it.
> The goal of good writing is, in part, to permanently change the reader.
This is a lofty goal. Very little on The Web comes within shooting distance of it. What's more, it has little to do with the fact that paying for access to soft copies of material is -unfortunately- [0] quite a bit different than paying for hard copies of the same thing.
> > Nobody does that with web articles.
> Have you never referred back to the same web resource?
Unless it's a reference manual or similar such thing, almost never. Even the issues of SciAm that I did save were saved for the sections that could be used as reference manuals. Frankly, I'm not one for sentiment. :)
> Have you ever emailed an article to yourself to read it later...
I've emailed the URL to an article to myself to read later because I was either
* too busy with another task at the time to read it, but it looked like it was related to another one of my projects
* on a smartphone, which is often terrible for reading idea-heavy material
[0] I say "unfortunately", because it seems that "most" people don't understand how to save complete copies of online resources to their local machine.
So, that will never happen. The quality of writing coming out of wherever is not going to be the same as that of a native English speaker. I've seen many documentation projects outsourced to non-english speaking countries and the quality is consistently awful. The product that comes out of there is worse than nothing because its completely incomprehensible. My last quarter was entirely devoted to rewriting examples of such documentation.
> The quality of writing coming out of wherever is not going to be the same as that of a native English speaker
Any evidence supporting your statement? Or is it just pure anecdote. To counter your point: there is a long list of writers with accolades in writing (in English) who are not native speakers.
There are people who are just poor at language, native or learned. Also, there's a class of errors that only exists among 'native speakers', the most grating to me, is "would of"
We could do that all day. For example, it's "non-English" not "non English." I don't think anyone expects perfectly refined grammar in one-off comment on the Internet.
I'm sure you can write English very well and there are probably many people like you (maybe even yourself) who can write far better than I can. It's just in my experience such people are few and far between where outsourcing is concerned.
30k readers is quite low for an article of any decent quality site though. There are a billion+ people on the internet. For articles getting 30k or less reada probably shouldn't be montizig or won't be getting much. Unless you want the cost of the articld to be paid back in 24 hours. Which is kinda anti web isnt it? I can see it becoming very quickly where someone can paraphrase or mirror the content somewhere else for cheap.
I see any per article pay model as likely flawed anyways. Netflix and many others do well because flat rate. I'd hate if nytimes charged me per article. I'd likely go somewhere else
But not, if you write in a language that is not English but a native language to the country you are living in, like German, French, Spanish, Portugeese, Italy, Polish, …
Maybe with the exception of Spanish (Middle and South America) and French (Africa) you have a rather small audiance but still the same living costs like in the US.
If you audience is not the general public but a specialied audience like Technology, like Astrophysics, like historic cars, then you don't have the audience like an article about Lady Gaga or some general politics.
By breaking it down to pay per article vs. flat rate, you're missing the multiple alternative payment schemes possible with micropayments and massive scale. Just for starters think of the spotify model, where users are charged a flat rate, but their money is then paid out to artists based on the number of streams (or attention paid to each song).
But to your point about scamming, that is definitely a concern - but no more of a concern than aggregators and viral sites (think uproxx) are today.
Exactly. I used to be a journalist but now work as a technical writer. Wages for content writers are already in the basement, with such a low compensation scheme it would kill online journalism entirely.
You can't just charge people the same rate that an advertiser would pay for that person to view something; by charging for the article, you are going to certainly get less viewership than if you publish it for free. To earn the same with a pay-per-view model as you would with free-but-with-ads, you are going to have to get paid more per viewer.
This is the same fallacy that content providers make with piracy; you can't just multiply the number of pirates by the cost of the item to see how much money you 'lost' to piracy. You will always get more viewers/readers/users when something is free.
You make the comment "... by charging for the article, you are going to certainly get less viewership than if you publish it for free. To earn the same with a pay-per-view model as you would with free-but-with-ads, you are going to have to get paid more per viewer."
I don't believe this has been established yet. Sure there are lots of people who won't even give up their email address and they run AdBlock and they whine everytime an article to the WSJ or NYTimes is linked to on HN.
But that preference for "free" information is being proven unsustainable as we type. And Apple's moves are going to make it that more obvious. And like Netflix which showed piracy was a service problem not a content problem, so is written text on the Internet.
Imagine there was a service that you could pay $25 a year for, that in exchange for your $25 a year, would take all annoying ads off every page of every website you cared about to read. Think about that. And if that $25 got distributed, a third of a cent at a time, to every web site that participated in this, and you read their articles, that money flowed to them, for providing the content you wanted to read? It changes the dynamic, it changes the parameters of A/B testing, and I suspect that a large chunk of the 40 million AdBlock+ users would sign up for it. A web site with a million of those page views a day, would bring in $90,000 a month.
Piracy, and articles on the web, is a mismatch between what the content provider thinks something is worth, and what something is really worth. If you artifically price it above what people think it is worth, you get piracy. If you provide a way for market dynamics to price it and capture the value you can see what it is really worth.
So rather an author saying "This article is worth $10,000" you throw out that article into a networked system which has millions of "small" votes, all articles compete for votes based on their value to the community. Value wins.
And like Netflix where a movie that is a dog may not make any more revenue by being part of the instant catalog, articles that aren't actually valuable won't suddenly have value by participating in this market. Conversely, articles that do have value, will automatically do very well financially.
> If you provide a way for market dynamics to price it and capture the value you can see what it is really worth.
And here is the problem. Content creators are still finding out painfully that what they create isn't worth what they believe it to be. Welcome to price discovery!
Chuck, I appreciate your thoughtful insights on this.
But what happens if it turns out that an insufficient minority are willing to pay for content to make businesses like the NYT and other publishers viable businesses (or at least viable at their current scale in their current incarnation)?
My current thinking is that if they were to stop writing, people would just get their news from elsewhere, and other publishers would gladly fill their shoes.
What are your thoughts around that? If enough people keep rejecting approaches to payment models (indicating they are not willing to pay), will we simply see the publisher space continue to shrink/degrade until it reaches equilibrium with the revenue they can manage to eek out?
"But what happens if it turns out that an insufficient minority are willing to pay for content to make businesses like the NYT and other publishers viable businesses (or at least viable at their current scale in their current incarnation)?"
I think about it slightly differently. If you ask the question "Will all the news organizations and publishers go out of business?" And the answer is obvious, no they won't.
The reason they won't is because there is a demand for content and the only people left standing will be the ones who can deliver content in a way that pays their own bills. Will the NYTimes go out of business? Perhaps.
This is the fallacy in a nutshell : "My current thinking is that if they were to stop writing, people would just get their news from elsewhere, and other publishers would gladly fill their shoes."
Nobody will commit finanical suicide to serve a market. They have to believe that there is a way to make money at it, so the only way "other publishers" jump into the market is if they can do so without losing their shirts.
What we're observing is the death of the "put up some content and slap some ads on it" way of making money. That it has worked this long has been very impressive as there is very little barrier to entry, but the commons is so thoroughly stomped upon with blog spam and content farms is finally killing it. Having service providers listen to their users and allow them to disable ads, puts the final nail in that coffin. Is it no wonder they scream loudly?
The vote is being called as they say, "Either put up with ads, or pay for your content."
The challenge though is how to negotiate what the content is worth? How do you make a market so that people can actually implement that choice over a wide range of pricing so that the market collectively they can arrive at a price?
It is something I thought Bitcoin like systems might help with, but any microtransaction system if it has low enough friction would work. Publishers could tweak the price of page views, readers could read or not read the content provided. Prices would float up to equilibrium and people will be able to once again reason about what an article is worth, whether it was written by a hack in a third world country or written by someone with an established reputation for quality.
The existing market is collapsing, and in its place a new market will emerge because people really do like reading stuff. And enough people like it to make it into a market. Capturing that value which was learned back in Ben Franklin's days for what became newspapers, will be relearned given the channels and technology we have today. Its cost structure will be different, I would hope more of the value would flow through to the authors but one can never predict these things. Music is in the middle of the same process. But the music industry won't cease to exist, but it could very easily transform into something we would not recognize.
You can look at other fields like classical music to predict what will happen. They have very high quality content, but the public isn't interested in it. As such, many orchestras are going bankrupt and closing down. It's unfortunate for those of us who like listening to or playing classical music, but that's just life.
There are other high quality music outlets for people to choose and they are choosing them instead. C'est la vie. The same could happen to writing on the web, or something else could happen. You don't know until you run the experiment. But it is possible that people will not be interested enough to either put up with ads or pay per view (in whatever form) for readable content on the web.
Sure, there are orchestras that are closing down, but there are also a lot that are thriving (mostly in big cities). Are there really a lot of people who want to be able to go to an orchestra performance but are not able to because there isn't enough supply?
There is the issue of location (i.e. you have to live in or near a big city to be able to go to an orchestra), but that is a consequence of the physical world (you need to be close to something to visit it, and for niche things like an orchestra, there will only be enough people to support it in a big city). This isn't the case on the internet - if your worldwide market is small, you can still reach them wherever they are.
I, too, have thought about a system like what you describe ($25 a year, distributed to each thing you visit). However, there are some issues.
1) You say 1/3 of a cent per visit... what happens after you visit 7,500 sites in the year? Where does the money come from at that point?
2) Say that instead of a 1/3 per year fee, you just take the whole $25 and divide it by the number of sites I visited...so if I visited only 5 sites in the year, they each would get $5, but if I visited 25,000 they would each only get 1/10 a penny. The question then becomes, how much is a reasonable amount to charge per year, if we are going to charge the same rate to everyone? Should someone who consumes much more pay more, or is it a flat rate?
3) No matter your system, there are going to be issues of content. Does a click-baity article that takes 10 seconds to read cost the same as a 10 page, in depth and well researched, article? You are going to incentivize people to make cheap and quick content, since you are not rewarded for anything besides clicks.
I also think your analysis of piracy being a result of pricing something above what it is worth to be a bit of a stretch; no matter what something is worth, if you offer the same thing to me for free, I will take the free.
To give an example: Suppose I was selling $10 bills for $10, and the guy next to me was giving away $10 bills. Everyone will obviously take the free $10 bills from the guy next to me - that doesn't mean I was selling the $10 bills for more than they were worth, it just means that people will always choose to pay less for something no matter what it is worth.
It is similar to Flattr which is a good experiment in the space.
1) Something of a red herring, my VOIP provider starts sending me emails when by balance drops below $20. But it works well in terms of periodically topping up the balance.
2) For markets to work it is essential for them to reward individually. A basic income for authors would simply raise the noise level, an income for "quality" authors based on readership encourages an increase in signal level.
3) Perhaps we could use the phone call method, and accrue fractions of a penny the longer you stay on a page. I agree that you would want to be able to express a desire for less click baity and more useful articles, the mechanism for that isn't as clear.
On the whole piracy thing, I presume you were around when NetFlix streaming knocked the winds out of torrent streaming? It didn't do it because it disable the torrent protocol, it did it because people who had been pirating content switched to Netflix because it was a better service experience at a price they were willing to pay. That is a very very important lesson for content providers. Their pricing authority is extremely limited in a high tech world.
I like your story but we both know that the guy next to you would quickly be out of free $10 bills, and then he would have to go to the bank and give them some money for another stack to give away, and eventually, like content providers today, would get tired of giving away $10 bills to people. And eventually he would run out of the funds as well.
The basic economics of a functioning market are that suppliers try to get as much as they can for their product and buyers try to pay as little as they can. The process for creating the process creates a price floor, below which nobody makes the product because they go broke doing so. Between that sad place, and people paying way more for a product than it costs to produce, lives the market economy.
Historically people have argued that information flies in the face of this view of the world, after all if I can produce infinite supply of something (copies) shouldn't the price go to zero? And yet it doesn't. I've spend about 20 years looking at how information gains and loses value, and how people can capture that value in a transaction. Google, for example. doesn't sell the eyeballs of a person to an advertiser, they sell the eyeballs of a person who just asked a question about the product that advertiser sells. Google is selling the information about searcher intent and that is very valuable indeed.
There is a fun experiment you can run which can show you information pricing in action.
Set up a chessboard at some distance removed with the white queen on a certain square. At a nearby table, offer to pay someone $2 to go to the far off chess board and come back and report the position of the queen. As soon as its reported the queen is moved to a new position. Now an entrepreneur can walk down to the chess board and on his way back sell the information to someone coming the other way, walking less and getting a fraction of the value. A really creative entrepreneur can set up a web cam that watches the board and they sit there 10 yards from the source table repeatedly selling the new positions as they come in. In that respect they are doing what high frequency traders do, applying technology to achieve an information advantage which is then convertible into revenue.
Understanding how information develops value will illuminate the strategies that will capture that value. As more and more people figure this stuff out we will see more things like flattr.com and other services. For a long time I've been expecting a curation service to appear which does what an executive secretary might do for a busy executive, pull the the top 10 or 15 best articles describing that news of the day or the area of interest, and making those easily consumable on the go. Capturing the value of the information curated, versus a giant pool of information one is forced to forage through to get to the good bits.
> Apple’s new content filtering and São Paulo’s Clean City Law both use code — one via the law, the other through software APIs — to enable the creation of ad-free public spaces.
Except that content filtering isn't about the creation of ad-free public spaces, but rather ad-free private spaces. There are (or should be) only two parties to a web request: the client and the server. Neither Apple, nor the State, nor Google, nor anyone else, is legitimately a party to my session.
The reason that I'm free to use an ad blocker is that it's my browser, and I am free to configure it however I want; the server, of course, is free to try to determine whether I'm actually viewing its ads or not, and may refuse to serve my requests if it chooses.
As for micropayments, I love the idea but people in general seem to be extremely resistant to them. For one thing, they definitely don't want unbounded monthly charges. That could be solved by having a set amount of money, divided up by the sites one visits—but the service that does that would be a privacy nightmare.
"There are (or should be) only two parties to a web request: the client and the server. Neither Apple, nor the State, nor Google, nor anyone else, is legitimately a party to my session"
The ad is arguably part of the content, as it's what's paying for you to see it in the first place.
"The reason that I'm free to use an ad blocker is that it's my browser, and I am free to configure it however I want"
That is a very selfish view, one which ignores everyone else except yourself. What if your company decided that you're not worth paying, but still wanted your work?
Let's say I'm offering you food. If someone else paid me to feed you horse manure, would you have an obligation to eat it? No, because it's not food. It doesn't become food just because some other party is paying me to feed it to you. You certainly aren't coming to me because you wanted horse manure. You don't have a deal with me regarding horse manure. I have a deal with the third party, and that has nothing to do with you.
This is completely ignoring the fact that ads are how the content you enjoy gets paid for, and part of the social contract is that, since people won't pay, that the content will be paid for by ad views.
There is no social contract here. If you have a website and you want to get paid for it, fine. But you don't get to do that without the risk of obsolescence just because, historically, it has worked in the past. Walmart can't order 20 million giant CRT Tv's and demand that customers are obligated to buy them just because they would have 10 years ago. There is no social contract requiring me to see ads I don't want to see.
Contracts don't exist if nobody enforces them.
PS: Most of the content I enjoy is not ad supported. And ads aren't the only way to spread money around while creating value in an industry.
This discussion never ends in changed minds. Best to abort it before you waste too much time.
Remember that there is a camp who thinks that they can do what they wish with the data sent to their computer -including refusing to process said data-, and there is a camp who feels that one has a moral imperative to process all data sent by a website to one's computer.
> It's not a moral imperative to process all data, it's a moral imperative to pay others for the product of their labor that you're benefiting from.
There's a very reliable method of ensuring that one who labors and posts to The Internet gets paid: refuse to deliver the fruits of the labor to others prior to payment.
If camp #2 actually thought as you claim they do, they would advise all Internet-publishing laborers to eliminate the ad-blocking worry -and keep the dishonest among us honest- by putting their creations behind a paywall.
If you want me to not block ads from your site, don't have ads that obscure content, deliver malware, or abuse my browser to make life difficult for me ("no do not close this browser window! Come back!").
If your ad network delivers autoplay video with sound, it gets blocked. If your ad network delivers annoying animated graphics, it gets blocked. If your ad network delivers malware, it gets blocked.
If your ad network is The Deck, you are fine.
Part of the social contract is that your ad network shows me ads, not distractions and malware.
There is a balance where the ads your site displays are not nuisances, and I do not block them, and you get paid more than I am prepared to fork over for each read.
If your work arrangement was "I'll show up and work on what you ask, then you tip me if you want", then your analogy might make sense. No one is forcing websites to respond to requests and serve content.
Great, then the social contract is clear. I can click the back button.
There is a lot of good content out there that is not ad-dependent. If all ad-dependent websites made a clear declaration that "you are not welcome, go somewhere else" that would solve my problem. Not theirs though...
Agreed that I generally prefer clarity, but I'm also one of those who don't mind the occasional "unobtrusive" ad. I would hate to see ads become more obtrusive solely for me to have the opportunity to decline them.
Sure thing. That's why I regularly use the threat of force to get my meals from the corner market, once monthly carry a thermonuclear device into the lobbies of my utility company, ISP, and landlord to make those bills vanish, and am always trailed by a cadre of highly competent ninja for one-off encounters.
Far more seriously: your statement is a non sequitur.
No "micropayment" system has ever succeeded, and no such system will succeed in the future. This is not a technology problem. It's a matter of human psychology.
Every single example provided by the author takes one of two formats. Either you pay a monthly bill for "all you can eat," or you make discrete payments of $1-$2-$10. These are the models that work.
It's not that your article isn't worth a nickel, it's that it's not worth my mental energy to debate whether to spend a nickel.
It is not a question of whether it is built into your phone, your browser, or any other platform. It's what's built into your brain. "Pay as you go" is incompatible with the observed preferences of consumers.
I'm sure that most sites that rely on advertising would have rather been paid directly by consumers, such that they would not have to rely on ad networks or other third parties. But consumers don't want to spend a penny or a nickel at a time. It's not worth the mental transaction costs. Ad views were the only realistic way to squeeze a penny out of a page view.
This is wildly incorrect. $ billions have been transacted as micropayments in social games[1]. The key to their success was bulk purchases of intermediary "currency" that frees players from the mental energy of thinking about actual money (its a sunk cost because the currency can't be redeemed).
[1] Distaste for social games and the business model does not invalidate the financial success of their implementation of micropayments.
Note: I started a micropayments company.
Social games are a prime example illustrating the parent's point that true micropayments (as in, lots of very small payments) don't work - they all have found that the payment models that actually bring in revenue are "micropayments" only in name, they're exactly as it was said, either "a monthly bill for all you can eat" ... or "discrete payments of $1-$2-$10", or even very high price packages targeted to a few "whales" that still bring in a substantial portion of total revenue.
Charging $10 is accepted by the paying consumers, being nickel-and-dimed isn't. Even in the "micropayment" games.
So what? Your micropayments platform makes it easy to create an account with a website, put $5 into their payment bucket, and then automatically pay a cent or two every article you read. You're splitting hairs over definitions, but the grandparent's point is simple: The model is already there. Candy Crush bonuses or Journalistic Articles doesn't matter. Give the payers a bucket they can throw five or ten bucks into at a time, that gives them pain-free access for long enough that they don't feel annoyed throwing another five bucks in later.
In-app-purchasing in games relies on conditioning the user across many hours of gameplay. 98% of users never take the bait. Roughly 0.15% of users make up 50% of the revenue.
In short: I don't think the "skinner box" model is relevant to web content. I can't set up a pain/pleasure response in readers and condition a tiny fraction of them to pay vast sums after 10 to 50 hours of engagement. That's not an option in journalism.
(Not that this has stopped the FT from trying it: $1 for a one-month trial, $480 a year for a subscription. I wonder how good the conversion rates are?)
IAP in freemium games is often a substitute for time (grinding or waiting). I wouldn't pay 5¢ for an article, but I might pay 1 token for a well-written summary of an article with the main points highlighted, if a quick skim identifies that the article is interesting.
Could 98% be an artifact of the 100's of millions of people who have tried social games? 2% is at least in the high millions if not low 10s of millions of people.
I (and it appears a significant number of others) ended up paying for the Economist - the 10 articles free / month was conditioning enough.
> $ billions have been transacted as micropayments in social games
Web content and gaming aren't remotely the same. Micropayments in gaming is almost akin to gambling for many games. Then there's the whole "pay to win" aspect, and "pay to play" aspect where you have points or stamina that gets eaten/spent as you play. When it reaches zero, you need to wait hours for it to recharge, or pay to recharge.
Web content is like buying a magazine in a store, or a newspaper from a gas station. It's nothing like mobile gaming.
Flattr really hit the sweet spot for me in this regard.
I set up an account, put some money in it, set a $20 monthly limit, hook it up to soundcloud and github, and then every time I "like" a song or "star" a repo it adds them to that month's list. At the end of the month it divides the $20 between everything I enjoyed most that month.
A similar system would probably work for ALL web content. But as always this gives the control directly to the consumer and big companies don't like that at all.
A similar system would probably work for ALL web content.
With the obvious proviso that it would need to be simple enough for everyone to set up in order to get the traction necessary to be useful. Simple enough for everyone means one button with a single 'Yes please' screen (eg OAuth). Anything more complex than that is destined to fail.
Do you really think it's a good idea to put ISPs in the position of doling out micropayment money? They would need to collect a fee for processing it, and what business rules are in place for transactions smaller than the fee?
And similarly, how do you prevent fraud? WAP was a walled garden experience; if I can send money to any site on the Internet by clicking a button, what's to stop a malware author from using their malware to send lots of clicks (and thus money) to a site they run?
Technically, micropayments aren't a difficult problem to implement. The business rules around financial transactions (which exist for good reasons) often present an intractable conflict with what would be a viable user experience.
> if I can send money to any site on the Internet by clicking a button, what's to stop a malware author from using their malware to send lots of clicks (and thus money) to a site they run?
Yeah, but with PPC ads everyone knows it happens and doesn't care. Ad fraud in general is a bad analog; when an advertiser buys an ad, they're looking for a certain response from a campaign. If they get the response for the dollar amount they paid, they don't care what the CPM is (and all removing the fraud would do is raise the CPM).
Micropayments would be a different story since the money would be coming out of individuals' pockets.
This is called "friction", and you're right -- it's the core reason microtransactions have never taken off.
Now, you can remove the friction by devising some automated system that pays sites some amount of money based on how long you spend there, but then you have to build an entire fraud-detection system to make sure people don't try to game the system and take more money than they are owed. This would add significant transaction costs -- and these costs would be high enough that very small transactions would no longer make sense to process. Keep going down this road and you'll eventually realize that you're just another credit card payment processor and have a similar cost structure. Bitcoin solves none of this, btw - you still want to make sure whatever micropayment scheme you use doesn't hand over your Bitcoin to a fraudster.
So now we're back at the user being the "filter" for good vs. bad transactions by making them explicitly authorize those transactions. And the friction problem you describe is very real: something like 90% of buy flows are abandoned at the credit card entry page. Micropayments are an intractable problem in my mind; they would solve a lot of business model problems but I don't know that they're very attractive to consumers.
> something like 90% of buy flows are abandoned at the credit card entry page
I'm interested in this statistic, do you have a source?
Are you saying that 90% of all buy flows are abandoned at the payment stage while x% are abandoned at another stage and <10% are completed or are you saying that 90% of all abandoned buy flows were terminated at this stage? In case of the latter it seems like knowing what percent of all buy flows become abandoned would be relevant to your point.
Also, was this data collected from one vendor/industry or from multiple sources? I'm also curious if the study examined cases where the "pay now" screen already had the customer's payment information (e.g. for a pre-existing customer).
I've abandoned a lot of payments at that stage --- mostly because frequently, the only way to find out how much shipping is going to cost is to almost complete an order!
I bought some electronics today; I ended up almost placing an order at three different distributors until I found the one I wanted.
I'll second this. It's the most reliable way to know what your total charge will be, including all the (potential) bullshit "convenience fees", etc, etc. You go to the "How much are you actually telling me you're charging my card?" screen, then compare prices there.
This was a statistic that was largely pulled from experience; so I don't have detailed stats on it.
It varies quite a lot based on how your individual buy flow is set up. I personally prefer to be up-front about pricing with people; it skews your metrics if you make them get to the credit card entry page just to see a price. Regardless, if we're talking a SaaS buy flow the conversion rates are usually far worse: your best case scenario is that 3% of customers who sign up for a free trial will convert.
Honestly, this is a case where A/B testing helps. Build both buy flows, measure the outcomes you care about, and go with the one that produces the result you're looking for. This assumes you have sufficient volume for A/B testing: if you don't, you shouldn't be focusing on optimizing your buy flow, you should be focusing on traffic acquisition :)
> Bitcoin solves none of this, btw - you still want to make sure whatever micropayment scheme you use doesn't hand over your Bitcoin to a fraudster.
Such scheme being HTTPS? Unless you are speaking about "stolen content" which basically boils down to the fact that copy costs nothing and nothing in the world will solve this.
That's flatly untrue. I've got a good example: SMS
When texting started it was almost universally $.25 or $.10 or so per text. One would definitely be aware of that fact when communicating with friends but you get over it because it's useful.
Wait I have another example, $0.99 songs via iTunes. That was the model that created the largest music retailer in the world from whole cloth.
It's not that complicated, all it would take is for someone (gee I wonder who) to standardize the price (or price tiers) and have a quick modal OK to continue on to the article for one credit, or equivalent.
SMS at $0.10 per text is an excellent example: it was total a failure as a business model. Every provider in north america, even prepaid, now offers SMS services on a monthly basis. It was critical to uptake.
A $0.99 song from itunes isn't a micropayment. It's a dollar paid for a music track you are likely to listen to over and over. Additionally, you knew what you were buying because you heard the music for free on the radio or in a club.
Journalistic work doesn't fit the iTunes model. News and blog posts tend to be fire and forget. Nobody will pay $1 up front, and once they've consumed the content once, they no longer need to pay for it.
'Total failure' is a pretty strong description. 'Dominant text messaging billing structure for over a decade' comes closer. And I think it's an important distinction that per-message charges disappeared because they were out-competed by flat plans, not because people weren't willing to pay per-message fees.
When texting started it was almost universally $.25 or $.10 or so per text.
When texting started, it was free until the phone companies figured out that my wife and spent more time texting for free than we did talking for money. When I'd be on the road, we texted until our thumbs had callouses. Imagine our disappointment when Verizon (and everyone else) started charging for it. (Caveats: U. S. on Verizon using pay-as-you-go phones, and at least 12 years ago.)
$1 isn't exactly a micro-transaction though, is it? Maybe by comparison to buying a full album...but I think the article is about more 'temporal' type exchanges (reading a post ad-free) whereas the iTunes "purchase"/license does indicate a tangible item, so to speak.
In my opinion iTunes is an outlier due to several factors: 1. The tie-in with the hardware (Apple iPod), 2. High-profile discussion about piracy and "punishment" avenues that were being discussed prominently, and 3. Steve Jobs working in the background to capitalize on 1 & 2 for very favorable terms with record labels enabling the price point (which was again maneuvered by Tim Cook with iTunes Music getting good deals for the new service).
Sure and I used to watch SNL for free over the air, now I pay $8 a month for Hulu. Things change.
The market, like all markets, is defined by people's willingness to pay and their next best alternative. Make the transaction cheap and nearly frictionless and it might be the choice with the highest utility.
So... pretty much every web paywall I've ever encountered. Where's my amazon 1-click for news website paywalls? Several of which I encounter using this very site?
I don't want to create an account, subscribe, save my details, unsubscribe from services I no longer use, etc. for each individual website.
SMSes weren't taking payment one SMS at a time. The amount would be aggregated and you'd pay in a lump sum, either as a monthly account, or as a prepaid lump. We definitely weren't doing a 10c transaction for each individual SMS.
> It's not that your article isn't worth a nickel, it's that it's not worth my mental energy to debate whether to spend a nickel.
I agree with the above, but disagree that this makes micropayments for online content a futile venture. There are a couple ways that come to mind to solve the mental fatigue issue:
1. Automate all the payments
2. Automate all the payments w/ a cap
3. Automate payments from whitelisted domains
4. Don't automate payments, but ask to whitelist new domains (similar to: "remember me").
These could all just be user preferences, just as described in the post.
I think proposition #2, ala flattr, is the only viable one out of this lot.
The other three all fall on the sword of "should I pay $0.05 for this mouse click?". If the user ever has to ask himself that question, the game is up.
TBH, the entities that should be paying sites are the link aggregators like HN, Reddit, and especially Facebook. Reddit lets you give "gold" to individual users if you like what they've said; I wonder what would happen if they allowed the handing out of gold to sites linked from Reddit?
I dunno how real the story is, but this bring to mind the exchange between Disney and Microsoft over who should be paying the other. Either Disney for using MS video formats, or MS for using Disney content.
The whole thing basically heads face first into net neutrality territory.
That said, back during for pay phone services the service got paid by the telco, and then the telco added the cost to the callers bill.
So should perhaps my ISP bill me for my Netflix viewing, rather than me paying Netflix directly?
Agreed. I'm actually starting a link aggregator (http://www.filter.news) and would love to implement this in the future. Besides supporting quality journalism, I think the signaling could be important as well.
Automated payments are that great of an idea, because then I have no idea how much I'm actually spending. And you're crazy if you think most people will go in and look at their itemized "content bill" unless they find a huge charge on their credit card.
Micropayments are fundamentally bad for websites. It is an inferior business model.
Think about it this way. Businesses need stable, predictable income. If they depend on "micropayments," then they would depend on producing consistently high quality articles. I am a subscriber to the New Yorker. They have some of the best writing out there -- but some of it is just not that good, in my opinion. And yet, I still pay for it.
A subscriber is willing to forgive bad content -- and still give you money. You're able to build a relationship, and ask for the money once (a year), not constantly.
$70 * 1,000 subscribers = $70k a year. Plenty to support the livelihood of a good writer.
How many "micropayments" would they need? What if they struck out a few months in a row?
What about a two-tier system: flattr/contribution for casual visitors, and a monthly/annual subscription which removes all ads (including Contributor fillers)?
As a new visitor I might click the flattr/contributor button (equivalent to "+1"), then when reviewing a statement I realise that I am visiting your site a lot, so switch to subscription instead.
The core issue is people recognising the value of good journalism or tech writing in terms of dollars, and being willing to pay for stuff that is worthwhile. After that the problem is only removing "friction" in getting a payment to the publisher.
All of this is true of the existing advertising system, which is a micropayment system, but instead of taking money from me, it takes resources and information about me and gives them to advertisers for a fraction of a cent.
"it's that it's not worth my mental energy to debate whether to spend a nickel."
Related in a way: How people can easily waste "energy" because it takes no "mental energy" to do so. Each time you turn on a light or decide to leave a light on (or even drive to a store) you are not confronted with "going to drugstore, cost 1.23, proceed?". ".10 to turn light on for 1 hour, proceed?" The cost is hidden and given to you in bulk. You just have to decide generally that spending $35 per week for gas is "worth it". (Along with other fixed type expenses).
It's interesting that the opposite of netflix was the video store, even with a monthly plan and no cost per DVD. You would have to get to the store, review the available movies, and then decide which one to rent. All along knowing that if you got home and didn't like the movie, you'd have to trek back to the video store and repeat the process. In that case, and even assuming the cost was $9.99 per month, you are closer to having a "cost" and energy (physical and mental) than you do on netflix.
On netflix the mental energy requirement is there as well but not the same as a video store obviously. You still have to cue up the movie, watch some of it, and then decide when to stop watching (3 minutes in, 20 minutes in etc/) if it doesn't appear to be what you like. This is after spending some thought to what you want to watch in the first place.
Which brings me to my point. One of the things that I have learned in business is to not make people have to think, that is to make it easy for them to make a decision. Instead of giving them 20 choices only give them 3 or 5 choices. People I have found, at least with things that I have sold, like this a great deal.
I tend to agree but I'd like to see a frictionless system in the 5c-50c per article range. There would need to be a decent preview so you have a decent idea what you're getting (like Benedict's newsletter or The Information). And one-click.
Why is the "independent web" in all of these articles exclusively referring to people trying to make money with ads? I make software and put it on the web for free. There are millions of Github repositories like this, are they not the "independent web"? I post pictures on various sites, under CC0. In high school, I made games and put them on the web, always for free.
It's disappointing to see the web portrayed as so profit-minded :(
That's one way of putting it. Another way of putting it would be: people that make a living wage, with enough time off, have the resources to donate to the creative commons.
If you frame it that way, the problem isn't how can people charge for their passion, but how can we get people decent working conditions so that they can have a meaningful and rich life outside of work?
But knowing the internet, people will claim up and down that it doesn't have any value, while still using it. And then call the person greedy for wanting to feed their family.
For one thing, I'm talking about the people that are posting things on Github, and Github itself is just an example. You can replace it with "a personal website on a server in your living room" if you prefer, although I suppose that's just an ad for your ISP's services?
Secondly, you are not the product. You are never the product, unless you live in a country where slavery is still legal. "Inclusion of text and image content in HTML sent to you" is the product Facebook et. al. are selling, but that doesn't quite have the same ring, does it?
"I would argue that your browser should be helping you safely, securely, and easily make purchases of content and services across the web."
It's tragic that the author's highest desire for what was envisioned as a global hyperlinked information system is to make it into a more efficient virtual-reality strip mall.
We already pay for every byte of data that moves across the wire. Infrastructure and upkeep costs are why ISPs are actual businesses. The right answer to the current problem of asymmetry in communication pairings is peer-to-peer content distribution, which spreads costs much more evenly while decreasing latency by bringing data closer to edges of the network. You support Wikipedia-over-IPFS by flipping a switch in your settings to help host it, rather than doling out a handful of USD to the incessant baleful banners of Jimmy Wales' face.
Meanwhile, the right answers to the costs of content creation are universal income and voluntary sponsorship, not DRM, paywalls, and moneyware.
You are correct. I've corrected it to socialism. Its a forced redistribution of wealth. My point is the gaping logical flaw in the original post. How is this the top comment?
Socialism defined as the "forced redistribution of wealth" is a highly revisionist view, and makes little sense. It would retroactively make almost all governments throughout history and in the present be socialist (via land laws and taxation), in addition to most political ideologies, even ones firmly right and capitalist.
In fact, it is completely devoid of meaning. You're going to have to make an actual case, rather than just engage in red-baiting.
That is nominally correct, but it's not a "socialist" policy in the slightest. What's interesting about UBI is actually how syncretic it is, being supported by elements coming from all sides of the political compass.
What precisely is the logical flaw? My line of thought was that it's productive to delineate the costs borne by those who wish to create and share digital objects into two categories: costs of designing/making the thing and costs for producing copies.
The latter can easily be defrayed with appropriate network technologies, which is along the lines of the original intent of the Web as a platform for sharing information; the former requires some change in how we fund creative work.
I think it's productive to address them separately, as their relative scales are vastly different for digital objects compared to physical ones. Since the incremental costs of producing additional copies of physical objects are so high, it's easy to absorb design costs into the price paid for each copy, but for digital objects this makes much less sense.
I am advocating a humanitarian system of patronage of the arts, yes. I think it's worthwhile to have faith in the ability of people to self-actualize when their basic needs are met, and I'm hoping we can thereby support creative endeavors of modest scale, like writing articles for the Web. A coercive system like communism has been shown to not work for various reasons, but socialist basic income on top of a relatively free market seems viable.
You are creating a delineation to in order to obfuscate that you want to deprive content creators the option of charging you directly for their work. The unit costs of digital copies are irrelevant when the alternative, patronage, doesn't covering the fixed costs of designing/making. Instead, you want society to bear that cost because ... anything on the internet should be free.
That instead of having the people who are consuming and enjoying the content pay for it, that the entire economic system needs to be overhauled.
I'm not opposed to UBI, but that is clearly not the solution to the problem here, especially because there is no way in hell that UBI will be even close to reality in most nations, let alone the US.
I accidentally liked it. I wanted to press the dislike button. You are right, I can't believe he suggests universal income as a way to solve the ad problem. Absolutely ludicrous. Problem: Content creators struggle to monetize their stuff and people are sick and tired of ads. Solution: Socialism. No, that's not how economy works. Either more valuable content should be created or else some sites will die, it's economic evolution if you want.
It is already fucked up situation that I have to pay for a movie, which ends up being complete crap, but with millions spent on ads, and I have no way to get my money back.
As soon as I see random site asking for money before I even see a content, I just close the page and find another with roughly the same content. Just ask nicely and maybe I'll disable adblock or donate if I feel like the content was worth it.
"Just ask nicely and maybe I'll disable adblock or donate if I feel like the content was worth it."
No you won't. You'll think, "Maybe I'll do it tomorrow," or, "You know, I didn't really enjoy it that much," as you go back to the site every day.
Your statement is just like the people who put a rating for one star on an app, and say, "I'll change it after I've used it if I like it," or, "One Star until Feature X is implemented," when Feature X was never promised as part of the app. And then when the change is made, the rating is never changed.
I've disabled adblock on some sites, that are really useful to me, like TV series calendar and donated to some sites that I read often, I bought indie games I liked, but I'm not going to pay to some random blog I accidentally landed from some random link once and never came back again.
Proposed micro transaction model won't make me pay for it anyway. Why someone feels entitled to my money, just because they facerolled their keyboard for a half an hour? Sometimes it feels like authors should actually pay me for reading/installing that pile of garbage they call "content".
"Why someone feels entitled to my money, just because they facerolled their keyboard for a half an hour?"
They're not the ones feeling entitled. You read their content. You used the product of their labor. Isn't the entire basis of Capitalism that you pay for the product of other people's labor?
"Sometimes it feels like authors should actually pay me for reading/installing that pile of garbage they call "content"."
I'm not saying you're wrong, but if your plan for dealing with content creation on the web includes overhauling the economic system of the world, then you may have a mismatch between the size of the problem and the size of the solution.
I can't imagine why the right answer to content creation is universal income, but I can certainly recognize a dogmatic statement offered as a conclusion when I see one.
> It's tragic that the author's highest desire for what was envisioned as a global hyperlinked information system is to make it into a more efficient virtual-reality strip mall.
That has basically been the dream of every exec out there since the .com boom.
"We already pay for every byte of data that moves across the wire"
You're paying for that byte to get from Point A to Point B. You haven't paid for the creation of that byte, though.
"The right answer to the current problem of asymmetry in communication pairings is peer-to-peer content distribution"
Again, that helps with the cost of sending that byte somewhere. It does absolutely nothing for the cost of creating that byte (writing the article, drawing the cartoon, creating the song, etc) in the first place.
"Meanwhile, the right answers to the costs of content creation are universal income and voluntary sponsorship, not DRM, paywalls, and moneyware."
Are they? I mean, why do you feel entitled to read someone's content without paying for it?
> You're paying for that byte to get from Point A to Point B. You haven't paid for the creation of that byte, though.
I don't know why you were downmodded but this is absolutely correct. Just because I bought a car and paid for its gas doesn't mean when I get to the theater, the movie should be free.
Better yet, it's like buying a TV then expecting all the stations, including pay-per-view channels to be free. You bought the TV, not the content that gets displayed on the TV. You can watch the free channels but guess what pays for those free channels? Yep, ads. Ads subsidize (pays for) your free content. That content isn't actually free at all, the ad companies paid for it. And they're allowing you to see it in exchange for seeing their ad.
> Are they? I mean, why do you feel entitled to read someone's content without paying for it?
Amen. Why is everyone suddenly so entitled? Makes my skin crawl to see people so naive about how the world works.
Working within the existing HTTP spec is an idea worth pursuing. Of course I'm biased because my startup is in the process of doing just this by implementing a 402 server. http://www.fairtread.com/
While the status code is a good place to start, you really need Accept-Monetization and the corresponding Content-Monetization headers to fill out the picture. We propose these to work the same way that Accept-Language and Content-Language headers work. Essentially the user passes along the monetization methods they allow, and when there's a mismatch on the server, a 402 error occurs...along with instructions on how to fix that.
The ideal system would allow multiple ways to pay for content, and would include advertising as a "free" option.
Building on HTTP 402 looks like a good path forward, but some tough love: the name fairtread.com looks like "fart read" or "fair read". The 't' gets lost in the middle because "read" makes more sense than "tread" in the context of paying to read web content.
We need to also then figure out how to handle a situation where a purchaser is unsatisfied in some way with the paid-for content. How do you refund their money (regardless of the amount)?
It's all well and good to tell someone that their idea sucks in the comments, but they still have your money.
Exactly. Microtransactions don't have microdisputes. Not to mention that payment with user intervention is annoying if it's on every page and payment without user intervention is wide open to fraud.
Yup. Payment is a decision. Even if it's a small one, it annoys users to stop and think "hmm, is this worth X" every time. That said, cellphones give us the same frustration since many of them have hyper-complex automatic payment schemes. But does anybody like the way cellphone bills work?
My cell phone bill is awesome. $35/mo prepaid, unlimited everything.
I don't like the way other cellphone bills work. My previous cell phones were AT&T and Sprint, and they were awful enough for me to permanently swear off of them. Maybe more people should quit trying to bend over backwards to convince their cell carrier to 'allow' them to have an iPhone.
Not only is it $35/mo, but I can top-up the account for several months at a time, so that I simply don't have to worry about it.
My one complaint is that my provider still "warns" me every month that my plan is about to expire, even if there are multiple pre-paid months to go. They really need to fix that.
Do you ask for a refund when you bought a newspaper and, after reading it, you don't like what you read?
Do you ask for a refund when you bought an app on the app store and you stop using it after 1 hour because it doesn't fit your need?
I think it probably depends on the amount you paid, though...
>Do you ask for a refund when you bought a newspaper and, after reading it, you don't like what you read?
No, because i know what to expect from different newspapers and in the very very rare cases where i buy them, i do that only after skimming the front and relevant pages.
>Do you ask for a refund when you bought an app on the app store and you stop using it after 1 hour because it doesn't fit your need?
Asking because it seems unusual to me, and I think those situations are really similar to what GP was referring to: "I paid to see what you had to say, but I don't like it so I'd like my money back". I can think of a lot of similar situations (movies, digital music, books, ...) where I wouldn't consider asking for a refund after I have consumed the content, whether I liked it or not.
It may be in the interest of content providers to provide refunds. Although I don't have any studies that say so, I suspect users will more willing to purchase content if they know they can get a refund.
Perhaps optional refunds can be baked into the protocol, so content providers can decide if they give refunds, and users can decide if a purchase is worth the risk.
If I already know that I can’t get a refund if the newspaper sucks, then I will stick to the known / reputable newspapers and avoid paying for small time newspapers.
So? If the payment is less than $10 or less than $50, who cares? The best you can do is warn other people and that sends a stronger message than just getting your money back.
Reputation is what counts and you can see this on Amazon and ebay where a poor rep means no future earnings. Good rep means higher potential future earnings.
IF someone rips you off you have multiple forums in which to vent your frustration and lower the seller's potential future earnings. That's a lot of power. That's more power than most corporations and countries have when they over-pay for a costly piece of shit system. Hell this is more power than you have when it comes to taxes! When your tax dollars are misspent there's absolutely no chance for a refund and you have an election every 4 years but you ain't getting a dollar back.
There may be short lived websites that exist only scam a large number of people out of small amounts of money. What makes this worse is that most people would (rationally) not consider it worth pursuing the website operator unless recourse were very easy. Is it really worth your time to chase down $0.25 from a scammy website, other than perhaps doing it on principle?
Any mircropayment protocol design should take this into account.
Arguing that micropayments are the fix is analogous to using the live tiles ux on the desktop or the querty keyboard on a cell phone. Migrating a solution to a new form factor because it has been succesful in the past or because there is a sulerficial similarity rarely ends up being a good design decision. Often when it works it is not at all for the reasons one initially presumed.
UX is all about matching intuitive user behavior with a solutions feature set as naturally as possible. The free vs fee problem is more similiar to this that on initial inspection. How does the user behave when coming across a web site which, as a part of its feature set, requires a transaction prior to proceeding with the use case?
To say that micropayments categorically won’t work is to equate the Internet with a homogeneous payment network. Sure, it’s been huge for commerce, but that isn’t what the internet is, at all. The analogy doesn’t carry. Micropayments are already working in some cases. This is exactly what Spotify is. User pays Spotify. User listens to tons of random songs. User pays Spotify. Spotify pays artists/corps pro rata. Sometimes a penny here, a nickel there. Kinda like, micropayments. Spotify seems to be doing ok. The artists, that’s another story.
The Internet is not one thing. The Internet it more than the sum of its physically parts. It will have many solutions.
I wish one-size-fits-all solutions would stop being put proposed. It’s exactly what the Internet isn’t. In fact, the centralization of advert brokers and personal information brokers is exactly what I don’t like about the Internet at the moment.
My first concern is the lack of (popular) payment providers that enable microtransactions. If you want to pay $0.15 for a web page, and there's a flat 30 cent + 2.9% processing fee on every transaction, the model doesn't work.
Second concern is using primarily commercial payment providers nothing to break the oligopolies created by payment gateways, which is what makes these transaction fees so high in the first place. I would love to see cryptocurrency support baked into any implementation of browser payments, as microtransactions and user freedom are both well supported.
Why are there transaction fees when seemingly all you're doing is updating a value on a ledger? Fraud. Investigating transactions involves humans, which gets expensive.
Global-shared-ledger cryptocurrencies aren't suitable for this case: a global record of every web page the world views is far too huge a quantity of data.
To deal with the per-transaction flat rate fees, you could simply group multiple purchases together into a single transaction. For example, a micro-payments provider could operate like a prepaid debit card, whereby you upload funds and then they subtract small amounts from the balance.
The cost of a transaction on bitcoin is likely to go up over time, especially if the block size doesn't increase.
The micropayments protocol for cryptocurrencies doesn't really cover the use case of using many website, unless you have a trusted 3rd party to accumulate the micropayments.
Who says we don't want to pay? Some of the most profitable newspapers are completely paywalled and have been for years. Someone wants to pay. I will gladly pay myself.
But I will only pay for ad-free content.
Remember how cable TV used to have that promise? You pay for your TV and you don't have ads. I remember that back in the day my cable provider would broadcast listings of today's programming schedule to cover up ads in the source transmission. Now you pay and you watch ads. If we do pay for websites, I hope we pay for no ads.
Exactly. We as people are not inherently predisposed to steal, take for granted or abuse. While these are strong words and they may not be related to all cases uniformly, we want to participate without taking anything away from the other party.
Google Ads is the embodiment of leveling that relationship now, and seeing that the conversation has shifted towards supporting creative processes which make the web great.- we need this. We just don't need Google Ads or ads in general to be the medium for transfer.
Looking at my content subscriptions, about 40% of the content is created by people who seem to be earning some type of income by that content. If eventually we found ourselves at a web-bankruptcy where everyone suddenly realized that there is not going to be any economic model that works - well, most of content would still keep getting produced, and for the rest there would be alternatives made by people who don't make it their business. I mean, that alternative content is already being made, it's just not viewed as much because it's crowded out by the overwhelming amount of other content.
The quantity of available good content created every day in many areas from internet posts to music far outweighs anyone's ability to consume them. We're throwing away 99% or more of it anyways, so if changing economics would make half of the content producers stop producing content, it's not a big deal for the total market. The song from a local artist with 5000 listens is as good as the hit with 5000000 listens, and it's not going to get there only because all the attention is already busy; if the producers of that hit wouldn't distribute because of economic reasons... well, the other song would suddenly get the same listeners, that's it.
A decrease in available content is a bad thing, but just a bit bad - if a reasonable model works out, it would be great, but if not, then "no ads, no payment, less content - if you want, then make it, you might get some donations, but it's not a business" will be a natural outcome that's actually not that bad for most people. Well, except the current crop of web-content-manufacturing companies - but the whole cause of this debacle is that people don't value them nearly as much as they would like to be valued.
Its not that we don't want to pay - its that we're only willing to pay when asked to do so - nobody is going to stand up and say I'll pay. And publishers aren't trying to make things readers want; advertisers have become more important to publishers than users, and that dynamic is what needs to change (just as its changing with TV/netflix/hbogo/amazon, etc)
I will gladly pay for something that I feel to be more valuable to me than anything else I could buy with an equivalent amount of money. Typically, I demand some form of material benefit in exchange for my cash.
I do, in fact, pay for a voluntary subscription to a web site that is free to use, ad-free even without ad-blockers, and entirely donation-supported.
But that's pretty much the only thing I pay for on the entire web. All other sites fall into one or more of several categories. (A) They don't need my money to continue operating as usual. (B) I wouldn't care all that much if they disappeared from the web. (C) The effort of paying makes payments worthwhile only for amounts greater than I am willing to spend. (D) I am not confident that any payment I might make would specifically support something that I like, and not things that I do not like. (E) My budget for frivolous spending has already been pre-empted by higher-priority spending this month.
The "independent" food blog in the linked article could be financially motivated to review certain things at a certain result; think of video game publications as a model.
The more likely result is the cost of providing a service over the internet continues to constantly implode; if the independent food blogger is motivated enough to spend $5/mo for internet "fame" there are numerous providers today who will take money in exchange for hosting. There may be a revolution in web design; a "cool looking complicated" web page might cost 5 megs of javascript and graphics and that might cost a blogger $5/mo if less than 1000 visit per month, but if the blogger gets famous for actual content (as opposed to web design) then once the blogger hits the 1M visits per month big leagues, shrinking the page from 5M to 5K might save the blogger a factor of a thousand in hosting costs. I don't think web designers will be happy about this; then again they won't be paying the bills. This will lead to something like the ancient "adobe flash" effect where the fancier a web page is designed and appears, the less likely it is to contain useful content, so it can be skipped, and the less complicated a page looks, the better the content it serves.
Another way the economics of the model would work is a trivial extension that probes all links at rendering time and if the link comes up as payment required the link is eaten. Currently I have to remember to ignore NYT links; in the future with the new extension I won't even see NYT links.
Another model that may develop is content that sellers want, like glowing "independent" reviews of a restaurant, might go away (relatively speaking) in a consumer oriented internet. This works on all levels from very small to very large, the advertisers pay for Gawker no matter if I look at it or not, given supposed levels of click fraud. Without the advertisers, if we don't look at Gawker it simply goes away. Rephrased and simplified, now you can push something no one likes except the advertisers if the advertisers pay for it, but in a future internet economy if you push something no one likes, you'd better be prepared to pay for it by yourself. That might have interesting socioeconomic class issues WRT widening income inequality; all billionaires will have blogs, no poor people will, and a way to filter college applications to make sure the "right" people are let in would be to require blog submission instead of traditional essay submission or the other socioeconomic filters we use now like extracurriculars or disaster tourism, etc.
Rephrased and simplified, now you can push something no one likes except the advertisers if the advertisers pay for it, but in a future internet economy if you push something no one likes, you'd better be prepared to pay for it by yourself.
All the web has to do is figure out why people will spend $1 at a vending machine for tiny terrible snack that is completely unsatisfying but won't spend $1 on a mobile app that they would use every day.
There are several highly relevant and clearly apparent reasons:
1. Snack food is very highly consistent. As with other mass-market goods, it's entirely homogeneous. You know precisely what you're getting. Information goods are virtually by definition not homogeneous. Virtually all successful sales models for information goods are based on some level of subscription or branding (frequently by author, venue, or publisher/publication, particularly periodicals).
2. The typical vending-maching payment mechanism has no extended-tail risk. Deposit a few coins or bills, receive your product (yes, I suppose there are debit/credit based vending systems). Every time I make a debit or credit card payment, particularly online, I'm creating a risk of future account fraud. That's something I weigh heavily, have experienced in the past, and quite simply do not consider worth any putative convenience benefit. Paying cash is a very reliable stop-loss risk mitigation strategy.
3. Privacy. Particularly for information goods, leaving a perpetual trail that I specifically paid for specific items of content is ... highly unappealing. I don't pay for my physical books with credit (or use "loyalty", a/k/a Snoop Card programs). It's why I don't and won't use Kindle or similar apps (I do read eBooks, but open, untracked formats, on other devices).
Oh, and I really don't buy much from vending machines. Prefer fresh foods or a good street vendor if I can find one.
Ha! Yeah, I think the real answer is, food. Food is different - we have a strong urge multiple times a day to get whatever food is in front of us, now.
If only apps were that way. "I feel a visceral need for a new app, and if I don't get it somebody is going to get hurt!"
Because it used to be "free". People don't value that much their private data nor ads-free web. I always say to my friends that "if the product is free, then you are the product". They understand that fact, they just don't care - and why would they?
I would pay .02$ for displaying a news page (it's is still 4 times more than what advertisers give to publishers) and probably everyone would - but disrupting trillion ad business is not that easy.
I don't see this flying because putting this info into my web browser means that lending someone my smartphone or tablet empowers them to spend my money, practically without thinking about it. Yeah, no. I think things like Patreon and tip jars just make more sense.
It's worse than that: considering that browsers are never completely secure, especially against user stupidity, it means it empowers random websites to spend my money.
> Of course not everything on the web needs to cost something, and I’m not arguing that every site charge for its content, and go behind paywalls.
I can't help but think that if the implementation becomes easier then more sites will start to demand small sums for their content. I'm curious about how these charges might work with the existing distribution platforms. Would a user who reads a 402 article through Facebook's Instant Articles or Apple News still have to pay? Apple News at least was offering pubs 100% of the ad revenue they generated off the ads they list themselves, would they give 100% of the 402 payment?
"At the point where you want to read one, you are presented with a Buy now with 1-click button. Clicking it does just what it says, and suddenly, instead of being denied access to that book’s content, you can read it."
What a recipe for disaster. Anyone who has ever downloaded something knows how confusing and difficult it is to press the right button (instead of some ad or virus or whatever). The idea that one single click could reveal my identity to the site owner AND wire my money to them is truly frightening.
In the articles' vision of utopia, people pay for downloading things, so putting misleading ads not only becomes unnecessary, but actually harmful for the content provider's bottom line.
There is no way people are going to pay for individual articles, what might work though is letting people customize what kind of ads they see.
For example I want to see car ads, movie trailers, new gadgets and I want to see what's on sale at grocery and hardware stores with 10 miles of the zip code I give it. No video, no animation, no tracking, no targeting, no fucking Taboola. And if an ad pisses me off I want a "never show me ads from this company again" button.
There are not many sites I would pay for that are purely content. I think HN is one of the few that could get away with charging $5/month and not lose me as a reader. The biggest problem is that most sites can't transition from free to subscription without losing most of their customers. Even a site that proves to be extremely useful could not do that without a competitor popping up that'll offer the same service for free.
There is also the situation of security to consider. Although browsers have made great strides in improving security, if we start including our payment information directly in the browser it could lead to potentially interesting situations. If a malicious entity escapes the sandbox or some memory reading vulnerability, they could figure out the payment information.
Of course there's also XSS and CSRF which could potentially allow a malicious entity to silently authorize payment by the user for their own website, all of which would have to be considered not only by the websites implementing the 402 API but also the browser.
Sure we're already working to fix these problems for all other data and account purposes, but if history is any indicator then I don't think we're ready just yet.
I've been thinking about this kind of thing for a number of years (even coded a micropayment solution which was terrible). But this article reminded me of that and just gave me a thought:
What if you flipped the burden to online commerce providers?
For example, stripe provides a small toggle so that your integration can add an extra 0.1% to all transactions (so your $49 SaaS offering pays an extra $0.049). In exchange you get a small JS code to embed on your marketing blog.
I'm not crazy about the bitcoin bandwagon, but this seems like a good entry point for distribution. Multiple providers other than stripe can deposit to the same bitcoin address stored in your browser, and then that bitcoin address is paid out according to the sites you visited that had "opted in" to the revenue sharing.
That is all well and good if you can use Paypal (As per screenshot in article)
Some of us can not use Paypal (and are not being told by paypal as to why after being banned) so have to use bitcoin, bank transfers, prepaid cards and cash for day to day transactions.
all centralized companies that do restrict access to their systems for all sorts of reasons (often not shared with the person being blocked)
all are "pull" methods where your account can be charged in an unauthorized manner
bitcoin, prepaid cards (such as paysafecard), cash and bank transfers are "push" methods giving the owner more control and cheaper fees for that manner
Not sure how practical paypal would be if you only want to spend a few cents (or more interestingly fractions of a cent!)
Again, it's clearly a mockup. Complaining about the processors shown is like complaining Mozilla's going to adopt a light-grey-on-dark-grey color scheme because they show that too.
You can also get prepaid Visa/MasterCards, incidentally. No trackable information required.
I like it, and I would like to be the first meta comment about the topic. Please reference my proposition from 10 days ago: https://qht.co/reply?id=10274226
I actually have been thinking about this for some time and while there are many things to consider, this is a problem Mozilla could get behind. My assumption about them is still unsubstantiated, but given enough research, it is a solution that is in serious need.
I might do a write up on my detailed thoughts on the subject.
When web advertisements finally die off, I imagine subscribing to one or two news websites, maybe the NY Times and a local site. Other than that, I'm not interested in paying for web content.
The funny thing is, the sites I'd be most likely to pay for don't have ads in the first place.
I really miss the days when people made websites and posted things on the web because they enjoyed it and were trying to be helpful, and not because they were out to make a buck on ad clicks. Quality has plummeted so far it's not even funny.
In reality I don't think ads are a problem, as long as they aren't annoying, are hosted by the webpage I am on, have zero trackers and are related to the content on the page.
Though the best system will always be free primary content with paid "premium" content. That way if you enjoy the content of the webpage you can support them, but you aren't required to pay to figure out if you do enjoy it.
Maybe internet providers should pay fee to the website owners. Same as cable tv providers pays HBO or other channels. We could log the time each user spent on website and then similar to spotify pay proportionally to the website owners. For each internet connection we could pay e.g. $10 that goes to content creators.
Ofcourse Facebook and Google would earn most of this money.
Sorry, I have to say it. If someone isn't willing to pay money for your content or service then you probably aren't offering anything of value. Instead you're surviving off of ad based revenue that you're generating while people are figuring out you are offering nothing of value.
The real story should be: why don't consumers have full root access on their mobile computers so they can do whatever they want? It shouldn't be controversial for Apple to let consumers have a little more access, it should be controversial that no major mobile OS allows full access.
Any way the solution to this problem will be the same as streaming movies and music. There will be an aggregator or curator you pay money to for access, and they will pay pennies to the content creators per view.
> Hey, we took this perfectly fine content and made it worse by plastering it with annoying banners and spyware. If you give me $5.99 a month I'll make it not shitty again.
This is not a business model I want to support. I'm happy to pay for good content, but if the supposed "value" I would get from giving you money is not being annoyed and tracked then you'll never see a penny from me.
There are a few unicorns who have figured out how to have good free content, have no ads, and make money, like the Thrilling Adventure Hour, and Welcome to Nightvale podcasts. They get my money because their model is actually adding value with swag and live shows rather than making their content worse.
There is a fundamental disconnect in how writers value their writing, and how readers value their writing. Trying to understand the economic forces that drive information value will really help writers understand what is, and isn't, valuable prose to readers.
Too many people are stuck in the mindset of "buy a book/article" etc, but the web is 99.99% one and done. So nobody wants to pay 15 cents for something they will never read again, and may not even like the first time. But have them pay a third of a cent? Sure, if they go back an re-read it 100 time's they will have paid you 30 cents for it. The value would be emergent rather than demanded.
Until journalists can internalize that, this conversation will remain unresolved.