9 ms·

Why are micropayments worse than the current web? People have differing opinions on the advertising-pays-for-content-so-don't-block-it issue, but are you referr

by gglitch 11y ago

Why are micropayments worse than the current web? People have differing opinions on the advertising-pays-for-content-so-don't-block-it issue, but are you referring to something technical?

Animats 11y ago
No, just the general failure of the pay-to-read model. Other than the New York Times, the Wall Street Journal, and the Economist, few general publications with a paywall make money. They all have large, worldwide reporting staffs. Nobody is going to pay to read your blog. Pando Daily is trying pay-to-read. It's too soon to tell how that will work out.
- scholia 11y ago
  Text is a rather small part of web traffic. Most bandwidth nowadays is used to deliver multimedia content (music and movies), much of it in real time. Several people have written articles about how the Internet has been and is being changed to work as a more efficient video distribution network, which is a long way from the original idea..... Some of that is paid for by subscriptions (eg Netflix, Spotify) though I assume the vast majority is -- like most radio and television -- paid for by advertising.
- michaelchisari 11y ago
  The NYT/WSJ/Economist model is too exclusionary and the pricing isn't ideal. I'm watching Blendle closely, because their model of micropayments for news content, mixed with no-questions-asked refunds I think could be huge.
dredmorbius 11y ago
Multiple reasons, though many boil down to Gresham's Law or similar: it's difficult to assess the quality of information, particularly when disaggregated. Most media advances have occurred through bundling rather than unbundling options: magazines, books (collected parchments, monthly serials), subscriptions. Even advertising-supported broadcast and Web models work by aggregating product, though in this case, eyeballs sold to advertisers. See: "Why Information Goods and Markets are a Poor Match" https://www.reddit.com/r/dredmorbius/comments/2vm2da/why_information_goods_and_markets_are_a_poor_match/ https://www.reddit.com/r/dredmorbius/comments/2vm2da/why_inf... Nick Szabo: "The Mental Accounting Barrier to Micropayments" http://szabo.best.vwh.net/micropayments.html http://szabo.best.vwh.net/micropayments.html Jacob Nielsen tries to make the opposite case. He's wrong. "The Case For Micropayments" http://www.nngroup.com/articles/the-case-for-micropayments/ http://www.nngroup.com/articles/the-case-for-micropayments/ I see a mix of some advertising, patronage, and a content syndication system similar to the existing performance payment model for music (broadcast, commercial establishment use) via ASCAP and the Harry Fox agency as most likely: https://www.reddit.com/r/dredmorbius/comments/1uotb3/a_modest_proposal_universal_online_media_payment/ https://www.reddit.com/r/dredmorbius/comments/1uotb3/a_modes... See Phil Hunt's UK proposal: "A broadband tax for the UK?" http://cabalamat.wordpress.com/2009/01/27/a-broadband-tax-for-the-uk/ http://cabalamat.wordpress.com/2009/01/27/a-broadband-tax-fo...
- e12e 11y ago
  With apologies for not reading all the references you list before asking: > it's difficult to assess the quality of information, particularly when disaggregated. Do you mean that it's difficult in general, or in terms of "should I buy this"? I could see micropayments work similar to Kindle - a 24 hour no-questions, semi-automatic refund policy. Don't think that article was worth 50 cent? Just "unpay" for it.
  - dredmorbius 11y ago
    It's difficult for a number of reasons, which I spell out in the essay you've failed to read: Market mechanisms work best where goods are uniform (either individually or on aggregate average), their qualities are readily determined (or again tend to average out well), where the fixed costs of production are low and marginal costs of production high (relative to one another), and externalities, both positive and negative, are small relative to market price. Information goods violate virtually all these assumptions. ● Quality is highly variable. ● Quality assessment is difficult, and often frustrated by other factors (e.g., pay-to-publish journals, "friendly" colleague peer reviews, discussed recently by Joerg Fliege at The Other Place). ● Quality isn't, and often cannot, be known in advance. ● Variance of individual instances is high enough that averages rarely suffice. ● Fixed costs of production are high, particularly for research, also to an extent for selection, review, and editing. ● Variable costs of production (e.g., publication) are low. In fact we're utilizing a system which was specifically created to reduce those costs still further, Tim Berners-Lee's World Wide Web, developed to transmit physics papers between CERN, SLAC, and other related facilities. ● Information goods typically have very high positive externalities -- they benefit those who don't directly consume them. Occasionally they have high negative externalities -- e.g., smallpox, "superflu", or weapons research. There's the question of what does a content payment scheme provide? Of which the answer is, generally, "an incentive to create content". What matters isn't whether or not each individual information trasnfer is equitably priced, but whether, at some reasonable interval (e.g., at years' end) you've got sufficient compensation for authors, researchers, reporters, etc., to provide an adequate supply of information and entertainment. When distribution was on physical media, printing and transactional sales were reasonably appropriate. With the price of reproduction* approaching zero, but nonzero fixed costs of production, there's an inherent conflict in the mechanisms which allow for price discovery in markets.

by gglitch 11y ago

Why are micropayments worse than the current web? People have differing opinions on the advertising-pays-for-content-so-don't-block-it issue, but are you referring to something technical?

Animats 11y ago

No, just the general failure of the pay-to-read model. Other than the New York Times, the Wall Street Journal, and the Economist, few general publications with a paywall make money. They all have large, worldwide reporting staffs. Nobody is going to pay to read your blog. Pando Daily is trying pay-to-read. It's too soon to tell how that will work out.

scholia 11y ago
Text is a rather small part of web traffic. Most bandwidth nowadays is used to deliver multimedia content (music and movies), much of it in real time. Several people have written articles about how the Internet has been and is being changed to work as a more efficient video distribution network, which is a long way from the original idea..... Some of that is paid for by subscriptions (eg Netflix, Spotify) though I assume the vast majority is -- like most radio and television -- paid for by advertising.
michaelchisari 11y ago
The NYT/WSJ/Economist model is too exclusionary and the pricing isn't ideal. I'm watching Blendle closely, because their model of micropayments for news content, mixed with no-questions-asked refunds I think could be huge.

dredmorbius 11y ago

Multiple reasons, though many boil down to Gresham's Law or similar: it's difficult to assess the quality of information, particularly when disaggregated. Most media advances have occurred through bundling rather than unbundling options: magazines, books (collected parchments, monthly serials), subscriptions. Even advertising-supported broadcast and Web models work by aggregating product, though in this case, eyeballs sold to advertisers. See: "Why Information Goods and Markets are a Poor Match" https://www.reddit.com/r/dredmorbius/comments/2vm2da/why_information_goods_and_markets_are_a_poor_match/ https://www.reddit.com/r/dredmorbius/comments/2vm2da/why_inf... Nick Szabo: "The Mental Accounting Barrier to Micropayments" http://szabo.best.vwh.net/micropayments.html http://szabo.best.vwh.net/micropayments.html Jacob Nielsen tries to make the opposite case. He's wrong. "The Case For Micropayments" http://www.nngroup.com/articles/the-case-for-micropayments/ http://www.nngroup.com/articles/the-case-for-micropayments/ I see a mix of some advertising, patronage, and a content syndication system similar to the existing performance payment model for music (broadcast, commercial establishment use) via ASCAP and the Harry Fox agency as most likely: https://www.reddit.com/r/dredmorbius/comments/1uotb3/a_modest_proposal_universal_online_media_payment/ https://www.reddit.com/r/dredmorbius/comments/1uotb3/a_modes... See Phil Hunt's UK proposal: "A broadband tax for the UK?" http://cabalamat.wordpress.com/2009/01/27/a-broadband-tax-for-the-uk/ http://cabalamat.wordpress.com/2009/01/27/a-broadband-tax-fo...

e12e 11y ago
With apologies for not reading all the references you list before asking: > it's difficult to assess the quality of information, particularly when disaggregated. Do you mean that it's difficult in general, or in terms of "should I buy this"? I could see micropayments work similar to Kindle - a 24 hour no-questions, semi-automatic refund policy. Don't think that article was worth 50 cent? Just "unpay" for it.
- dredmorbius 11y ago
  It's difficult for a number of reasons, which I spell out in the essay you've failed to read: Market mechanisms work best where goods are uniform (either individually or on aggregate average), their qualities are readily determined (or again tend to average out well), where the fixed costs of production are low and marginal costs of production high (relative to one another), and externalities, both positive and negative, are small relative to market price. Information goods violate virtually all these assumptions. ● Quality is highly variable. ● Quality assessment is difficult, and often frustrated by other factors (e.g., pay-to-publish journals, "friendly" colleague peer reviews, discussed recently by Joerg Fliege at The Other Place). ● Quality isn't, and often cannot, be known in advance. ● Variance of individual instances is high enough that averages rarely suffice. ● Fixed costs of production are high, particularly for research, also to an extent for selection, review, and editing. ● Variable costs of production (e.g., publication) are low. In fact we're utilizing a system which was specifically created to reduce those costs still further, Tim Berners-Lee's World Wide Web, developed to transmit physics papers between CERN, SLAC, and other related facilities. ● Information goods typically have very high positive externalities -- they benefit those who don't directly consume them. Occasionally they have high negative externalities -- e.g., smallpox, "superflu", or weapons research. There's the question of what does a content payment scheme provide? Of which the answer is, generally, "an incentive to create content". What matters isn't whether or not each individual information trasnfer is equitably priced, but whether, at some reasonable interval (e.g., at years' end) you've got sufficient compensation for authors, researchers, reporters, etc., to provide an adequate supply of information and entertainment. When distribution was on physical media, printing and transactional sales were reasonably appropriate. With the price of reproduction* approaching zero, but nonzero fixed costs of production, there's an inherent conflict in the mechanisms which allow for price discovery in markets.