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"No micropayment system has ever succeeded" This is wildly incorrect. $ billions have been transacted as micropayments in social games[1]. The key to their s

"No micropayment system has ever succeeded" 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.

hapless 11y ago
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?)
- MikeTV 11y ago
  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.
- fraserharris 11y ago
  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.
PeterisP 11y ago
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.
- GauntletWizard 11y ago
  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.
  - phasmantistes 11y ago
    Which is, in fact, exactly the model of Google Contributor. Puts $5 each month into a bucket, and then each time you visit a site you pay a few cents in order to have an ad-free experience.
  - simoncion 11y ago
    > So what? Your micropayments platform makes it easy to create an account with a website, put $5 into their payment bucket... That's it right there. That's the "what". :) Paying 0.01 cents to someone is quite different from paying $5 to that same someone that gets delivered in tiny portions over some span of time. In the first case, you're out a tiny fraction of a cent. In the second case, you're out $5. Because (AIUI) the money movement system makes it prohibitively expensive to move fractions of cents around, micropayments don't happen.
mahranch 11y ago
> $ 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.

hapless 11y ago

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?)

MikeTV 11y ago
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.
fraserharris 11y ago
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.

PeterisP 11y ago

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.

GauntletWizard 11y ago
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.
- phasmantistes 11y ago
  Which is, in fact, exactly the model of Google Contributor. Puts $5 each month into a bucket, and then each time you visit a site you pay a few cents in order to have an ad-free experience.
- simoncion 11y ago
  > So what? Your micropayments platform makes it easy to create an account with a website, put $5 into their payment bucket... That's it right there. That's the "what". :) Paying 0.01 cents to someone is quite different from paying $5 to that same someone that gets delivered in tiny portions over some span of time. In the first case, you're out a tiny fraction of a cent. In the second case, you're out $5. Because (AIUI) the money movement system makes it prohibitively expensive to move fractions of cents around, micropayments don't happen.

mahranch 11y ago

> $ 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.