14 ms·

Why so many things cost exactly zero

141 points by yarapavan 7y ago

c-smile 7y ago
Just in case, I've answered similar question "Why are C++ libraries mostly paid such as QT, Poco, and Sciter?" on Quora: https://qr.ae/TS4BUI https://qr.ae/TS4BUI
- Macha 7y ago
  I've seen more of this - people linking semi-relevant question/answers on quora. Even with similar wording. I'm not sure why? Is there a rise of people using quora as a sort of blogging platform? Incentives to get views on your answers for users? Maybe I'm just overly sensitive as Quora initially got on my bad side when they used to put everything behind a login wall and required accounts with real names.
saagarjha 7y ago
I think this is just the same problem of micropayments on the web: nobody’s “solved” it, so free is just the most convenient option by far.
- amelius 7y ago
  Not true, app stores solved it ...
  - eliasbagley 7y ago
    Not micro in the sense of penny transactions.
    - amelius 7y ago
      They don't lump together small in-app payments, so you get billed only larger amounts?
  - ghaff 7y ago
    Kinda/sorta/not really. It's why "free to play"/in-app-purchases rather than up-front-buying is such a big (and annoying) trend.
  - choward 7y ago
    Don't they skim like 30% or something crazy like that off the top of every purchase? If so, I wouldn't call it "solved".
    - AnIdiotOnTheNet 7y ago
      When you consider the infrastructure provided for hosting, payment processing, distribution, and the storefront itself, 30% is not unreasonable.
      - monocasa 7y ago
        That 30% is on more than $60B/yr for apple. Are you suggesting that their overhead for running app store is anywhere within even a couple orders of magnitude of $20B/yr?
        AnIdiotOnTheNet 7y ago
        I'm suggesting that, compared to what you'd pay to do these things for yourself, 30% is a steal. There's a reason people are ok with paying it.
- 8ytecoder 7y ago
  https://www.allthingsdistributed.com/2007/08/the_amazon_flexible_payment_se.html https://www.allthingsdistributed.com/2007/08/the_amazon_flex... Amazon had a service that was built mainly with micropayments in mind. It never took off. "Amazon FPS’s aggregation feature lets developers track and aggregate micro-payments into a single payment transaction, saving on transaction processing costs and avoiding having to build complex ledger functionality into their own applications. Using the aggregation functionality coupled with the lower Amazon FPS fees, developers can now pursue micro-payments businesses that previously have been cost-prohibitive." Edit: Better Source and a quote
- hesarenu 7y ago
  In india we have UPI, we can pay as small as we want.
jariel 7y ago
Payment friction. Anything +/- 0 by a little bit will be zero because there's huge friction costs in transferring money: + UI complexity, sign up + Transaction costs (VISA, fraud protection) + Financial accounting + Hosting the relevant financial data + Legal issues
- ghaff 7y ago
  And, arguably, mental transaction costs. Getting people to pay anything at all is a big hurdle to get over whether it's a penny, a dollar, or ten dollars. Clay Shirky wrote way back when that this was the main problem with micropayments and I'm mostly inclined to agree. (It's true that $1 digital music and video rentals for a few dollars were/are something of a thing. But people seem to generally prefer all you can eat subscriptions.) If people were really on board with micropayments, I suspect they could be made to work technically/financially.
  - jariel 7y ago
    Yes, definitely. 'Paying money' is not like the old days when you'd flip literally a few cents out of your pocket for some candy. Money transfer in tech comes with huge headaches across the board. Privacy, compliance, international taxation, VAT, risk, etc. etc..
- lotsofpulp 7y ago
  I like the way Apple Pay works, makes it feel very frictionless as a payer.
  - simonh 7y ago
    The OP means friction in the form of costs. Payments go through several hands, the payers bank, the payments networks, the payees bank and each of them incurs costs on the transaction.
- tzs 7y ago
  > + UI complexity, sign up + Transaction costs (VISA, fraud protection) + Financial accounting + Hosting the relevant financial data + Legal issues In particular, under legal issues: taxes. Sell something online to a person in city/state/country X, and you might be required by X to collect sales tax or VAT on the sale.
dehrmann 7y ago
There's this awkward gap in online service pricing that I hate. I'd like to pay $3 per month for a 100GB Dropbox quota, but Dropbox decided (rationally--I don't blame them) than anyone paying less than $10 per month isn't worth their time. Pretty much all ~consumer services like that are either free or at least $10.
- tonyedgecombe 7y ago
  I'm the same, these $10 services start to add up quickly. Perhaps Dropbox is better as a feature after all.
- diffuse_l 7y ago
  I pay ~2$ per 100gb per month on google drive. Standard plan.
  - dEnigma 7y ago
    You might pay that amount per 100 GB but you pay more than that in total, i.e. you have more than 100 GB on Google drive, right?
    - Qu3tzal 7y ago
      Nope, I pay 1.99€ / month for 100 GB. No more, no less.
    - diffuse_l 7y ago
      I only have/pay for 100 GB. It's also possible to share the storage with other users.
    - davchana 7y ago
      Nope, I have free 15GB, 2GB x 2 times Security Checkup Bonus from 2017 & some; & pay $20/year; and have total 100 GB (so paying for 100-15-2-2= 81GB)
  - occamrazor 7y ago
    Similarly, I pay 1$/month for 100GB on iCloud.
deleted 7y ago
[deleted]
ouid 7y ago
"maybe blockchain will fix it"
hannob 7y ago
There's a very simple reason for this: Payment is complicated and adds overhead. Particularly payment that works for everyone internationally. Every form of payment, no matter in which direction, needs to provide enough benefit to justify the costs of the complexity added by it.
- tzone 7y ago
  This. If international micro payments, with close to zero transaction fees, really were an option, lot more things would have variable pricing or payouts.
- lalaland1125 7y ago
  I just also want to note that people shouldn't ignore the psychological cost of paying. Making a decision on whether or not to spend money requires mental effort that doesn't scale down well with price.
  - kccqzy 7y ago
    Correct. I once pointed out to my friends who earns a five-digit salary every month (by no means impressive in the Bay Area) that he spent 20 minutes agonizing over a $2 payment. Before I pointed it out he didn't even realize it was irrational.
    - lonelappde 7y ago
      Spending is a repeated game. If you don't agonize, you have to pick either $0 or $2 *N for unknown N.
      - e_y_ 7y ago
        Also frugal habits learned from agonizing over $100 and $10,000 spending sometimes trickle down to those $2 decisions. It becomes an instinct even if it doesn't make sense.
    - onetimemanytime 7y ago
asperous 7y ago
I think most of the microtransaction argument here is forgetting about Swagbucks [1]. I would argue micro transactions are doable, either through networks or payout systems that wait until you have enough for a payout. I believe the real reason is that Google isn't exactly a commodity. People are used to the brand, the user interface, the web url, and maybe the occasional quality or exact flavor of the search results. Because it's not a commodity, people don't just instantly change to whichever site pays the most, and because of that there would have to be a large pay difference for customers to make a switch. Users are basically willing to "forfeight" the money they would get using Swagbucks to use Google. [1] https://en.wikipedia.org/wiki/Swagbucks https://en.wikipedia.org/wiki/Swagbucks
chiefalchemist 7y ago
> It’s obvious why the likes of Facebook and Google don't charge for their products: It costs nearly nothing to transmit... That's not why. They don't charge because it's not lucrative to do so. Charging - however small - would change expectations on SLA, privacy, security, etc. Most importantly, as everyone on HN knows, they can't charge for access to their platform because the platform isn't the product. You and I are the product. Finally, Bloomberg should be more careful with their word choice. They are prestigious enough to know that __nothing__ is free. There is always a cost(s) involved. The transaction might not call for an exchange of financial wampum but that does not make it free.
- dieselerator 7y ago
  >Finally, Bloomberg should be more careful with their word choice. They are prestigious enough to know that __nothing__ is free. There is always a cost(s) involved. The transaction might not call for an exchange of financial wampum but that does not make it free. I read the article. It is a synopsis of a paper. The word "free" does not appear in the article, and to my reading the author does not imply "free".
  - chiefalchemist 7y ago
    Cost zero? That's not free? My point is, free or cost zero...neither exits. There is no free. There is no zero cost. Those are myths. There is always a cost. It might not be tangible (i.e., money) but there is always a cost.
m11a 7y ago
> It’s obvious why the likes of Facebook and Google don't charge for their products: It costs nearly nothing to transmit, say, one Gmail or host, say, one photo on Instagram. This already doesn't make sense. This wrong logic could be extended to every paid service which doesn't rely on an external service, especially SaaS, on the internet. If this reasoning was correct, everything from Zendesk to Superhuman to GitHub (pre-Microsoft pricing) should be free. Development costs money, and hosting overall costs a fair bit of money (because every user doesn't just post one picture, or have one email, and it compounds). The real reason it is free is because they want users, and make more money from ads than they would charging a reasonable price (which would massively cut adoption anyway).
- sidlls 7y ago
  Yes, I stopped reading at that point. What does the author think the small army of software engineers and researchers that create their products are paid? Nothing?
- abvdasker 7y ago
  Yes, the premise of this article almost immediately struck me as being quite off base. The economics of pure tech companies at this point are well understood: large up front investment with near-zero (but importantly not actually zero) marginal costs. This article seems to be written by someone who doesn't understand the engineering side of things. At scale, the extremely low cost of serving an individual request ends up being potentially costly in aggregate, which is why the larger a web service gets, the more important performance becomes.
fxj 7y ago
> Broadcast television and radio. At least not in Germany. Every household has to pay a monthly fee even if they dont want to. No opt outs possible. And for music licenses there is GEMA which is also financed by additional charges on empty media like SDcards or Hard disks. Also no opt out possible. Google/youtube was fighting it and they finally lost the battle. So in principle the IP Providers could be forced to pay a monthly fee for internet searches and social media. For mobile networks this is already discussed. It seems that the EU doesnt like the free services from the SV giants and will fight them in the time to come. The GDPR was only the beginning. The next one will be more about the money.
- numlock86 7y ago
  > At least not in Germany. Every household has to pay a monthly fee even if they don't want to. No opt outs possible. Yes, but you can simply not pay that. I've been doing that for decades now. They send you scary reminders and say things like "Hurr durr, we are going to impount your wage!" but that's where it already ends. Just send them GDPR requests which they can't/won't reply to on a regular schedule and they are actually the ones that have to deliver/comply first before anything else. Side note: My household and car are broadcast/radio free and I don't consume these on the internet either.
  - fxj 7y ago
    Of course you can, but it is illegal by german law. And german citizens do not like to commit illegal things. ;-)
    - alanfranz 7y ago
      You can if you don't use such services. Then it's legal.
      - johannes1234321 7y ago
        That was previously. Since 2013 it is mandatory for each household (Exceptions for disabled, people on social security, etc.) as well as mandatory for business premisses. The assumption is that everybody owns a media receiver (since computer+internet counts as well, as there is streaming) and since running the infrastructure is seen as a public service.
sweeneyrod 7y ago
I think another reason that Google et al don't pay customers is because they might realise how much their data is worth and get uppity.
gweinberg 7y ago
This article's only value is as a counterexample to the assertion "there are no stupid questions." Not charging (or paying) people at all is not the same as charging them zero, you have to be being deliberately obtuse to pretend that it is.
jonplackett 7y ago
It’s just friction. Zero just means no payments have to take place. It’s tv e friction that puts people off not the amount of money
Scoundreller 7y ago
The MER cost of an ETF could go below zero too. Many make some extra money from securities lending. In theory a regular shareholder could earn this money too, but it's not worthwhile except at scale. But I doubt anyone other than Vanguard would do this at scale.
SwellJoe 7y ago
I've gotten to the point where I automatically and instantly discount any theory that proposes blockchain as a solution. I'm not saying blockchain technology will never be a good solution to a real world problem, but I have noticed that it is very often an ignorant assertion of faith rather than an argument based in fact. It walks like a religion and quacks like a religion, so I'm not sure why I should think it's something other than a religion.
- OrgNet 7y ago
  but religions are based on lies... the blockchain is just pure math/science...
  - SwellJoe 7y ago
    I thought I was clear, but perhaps I can explain better: Blockchain is very often suggested as a solution to a social or ethical problem, absent any evidence that it can solve those problems (or can solve them better than existing law/contract/trust-based solutions). Kinda like religion. Blockchain is real, in the same way any other algorithm or technology is. Saying it will solve people being jerks is superstition.
- m11a 7y ago
  > It walks like a religion and quacks like a religion, so I'm not sure why I should think it's something other than a religion. This is such a good way to describe the current state of blockchain. It's a cult. And mostly spread around by people who are trying to increase the price so they can sell and profit off other people. It's a giant ponzi scheme, and wealth redistribution. But I think the technology has promise. We just haven't bothered explore real applications of it, because we're too busy trying to use it to make a quick buck at someone else's expense.
gumby 7y ago
There's a lot of evidence that the bigger factor is transaction cost. People consume more under all-you-can-eat plans than per-transaction plans (e.g. internet service) even though the unmetered plans may cost more, simply because they don't want the mental overhead. People will drive out of their way to avoid a tool bridge even if the toll costs less than the cost of operating their vehicle for the other route. All that billing infrastructure costs money as well. Think of how much of the phone and TV cable networks is consumed by nothing but managing tollbooths? The post from Stratechery yesterday made this point differently: when credit cards were introduced merchants liked them because they no longer needed the (pre-computerized in those days) infrastructure and headcount of billing customers, checking credit, etc.
- gotdvoted9392 7y ago
  This all feels like the usual ignorance of externalities. Which feels like ignorance of information not in front of us. This is Adam Smith’s fear of division of labor taken to extremes making ignorant stupid humans. We’re allowed a tiny little sliver of the information needed to make wise decisions, told to defer to others for everything else. It’s described in a variety of ways going back years. We’re not observing much new from humanities social norms. It’s that more people are able to learn and read about it than before. And our tech is nicer. Politically the world still works in the usual ways though.
- inetknght 7y ago
  > People will drive out of their way to avoid a tool bridge even if the toll costs less than the cost of operating their vehicle for the other route. It's not just the mental overhead here. I specifically avoid toll roads because I think their concept is fundamentally wrong. I pay taxes to pay for roads and their maintenance. I shouldn't have to pay more taxes ("tolls") to pay to use those roads. If it's a private road then it should be marked as such. The public shouldn't be permitted to drive on private roads marked as if they're a interstate or state highway or anything like that. It's deceptive and profiteering off of what the government already provides: transportation infrastructure. And it absolutely should not be permitted for a private entity to purchase an existing road and turn it into a tollway.
alecbenzer 7y ago
I've never heard an email sent via Gmail referred to as a "Gmail" before.
- zamadatix 7y ago
  It's a common thing to happen and I've noticed it a lot with middle age non tech crowds. It's not a new phenomenon overall but people talk about how their son made a YouTube or they sent a Gmail quite regularly. For some reason tech folks find it natural to use the verbs (e.g. I googled/youtubed it) but not the nouns. It doesn't always require the service have 100% market dominance either, just that it be popular enough people hear others use it and commonly used in exclusivity by the user.
  - TylerE 7y ago
    This must be a local thing. I've never heard "gmail" used as a verb, ever, by any one of any age.
    - zamadatix 7y ago
      It's not really a local speech pattern thing it has more to do with associating <product name> with <name of tool>. If you can think of examples for a dozen other traditional products (kleenex, ketchup, jello, aspirin..) it shouldn't be hard to imagine that people do it for gmail and technology products/services. It's also certainly not unheard of though it is still less popular than traditional "emailed" https://trends.google.com/trends/explore?date=all&geo=US&q=how%20to%20send%20a%20gmail,how%20to%20send%20a%20email https://trends.google.com/trends/explore?date=all&geo=US&q=h...
      - TylerE 7y ago
        That's a different part of speech. No one says they're going to "Kleenex their nose" or "aspirin their headache" so why would they "gmail their friend"?
        7y ago
m463 7y ago
There are a lot of reasons things cost zero. I think one is complements[1] (if the price of jelly goes down, peanut butter sales increase) Apps are complementary to iPhones, so if Apple drives the cost of apps to zero, they sell more iphones. For Google, if data sales are complementary to services, making the services free makes data sales rise. Only thing I've noticed though is that free is associated with lots of unintended consequences. Free electric car charging means it's hard to reliably charge your car. Free web services means nobody gets good customer service. Even a modest co-pay leads to significant cost savings for insureres because free visits can easily tie up all health-care resources. [1] https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/ https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/
carapace 7y ago
Apparently bus fares in San Francisco just cover the costs of collecting the fares. When a recent Mayor attempted to just make the buses free he was told it was impractical because they would become "rolling dumpsters".
Igelau 7y ago
I got paywalled. Guess I'll never know!
SeekingMeaning 7y ago
http://archive.ph/JbFkn http://archive.ph/JbFkn
chrismmay 7y ago
I've been paid a total of 35 BAT (~$8) for using the Brave browser since October '19. STEEM was supposed to be like Facebook, but you get paid. It turned out to be more of a "rich get richer" ecosystem, so I stopped using it. Facebook's Libra may yet turn out to be a way for people to get paid for using Facebook. I stopped using Facebook entirely following all the negative press. I only recently signed in to strengthen my password and enable 2FA. I don't use it anymore at all. Maybe I would start again if they paid me.

141 points by yarapavan 7y ago

Just in case, I've answered similar question "Why are C++ libraries mostly paid such as QT, Poco, and Sciter?" on Quora: https://qr.ae/TS4BUI https://qr.ae/TS4BUI

Macha 7y ago
I've seen more of this - people linking semi-relevant question/answers on quora. Even with similar wording. I'm not sure why? Is there a rise of people using quora as a sort of blogging platform? Incentives to get views on your answers for users? Maybe I'm just overly sensitive as Quora initially got on my bad side when they used to put everything behind a login wall and required accounts with real names.

saagarjha 7y ago

I think this is just the same problem of micropayments on the web: nobody’s “solved” it, so free is just the most convenient option by far.

amelius 7y ago
Not true, app stores solved it ...
- eliasbagley 7y ago
  Not micro in the sense of penny transactions.
  - amelius 7y ago
    They don't lump together small in-app payments, so you get billed only larger amounts?
- ghaff 7y ago
  Kinda/sorta/not really. It's why "free to play"/in-app-purchases rather than up-front-buying is such a big (and annoying) trend.
- choward 7y ago
  Don't they skim like 30% or something crazy like that off the top of every purchase? If so, I wouldn't call it "solved".
  - AnIdiotOnTheNet 7y ago
    When you consider the infrastructure provided for hosting, payment processing, distribution, and the storefront itself, 30% is not unreasonable.
    - monocasa 7y ago
      That 30% is on more than $60B/yr for apple. Are you suggesting that their overhead for running app store is anywhere within even a couple orders of magnitude of $20B/yr?
      - AnIdiotOnTheNet 7y ago
        I'm suggesting that, compared to what you'd pay to do these things for yourself, 30% is a steal. There's a reason people are ok with paying it.
8ytecoder 7y ago
https://www.allthingsdistributed.com/2007/08/the_amazon_flexible_payment_se.html https://www.allthingsdistributed.com/2007/08/the_amazon_flex... Amazon had a service that was built mainly with micropayments in mind. It never took off. "Amazon FPS’s aggregation feature lets developers track and aggregate micro-payments into a single payment transaction, saving on transaction processing costs and avoiding having to build complex ledger functionality into their own applications. Using the aggregation functionality coupled with the lower Amazon FPS fees, developers can now pursue micro-payments businesses that previously have been cost-prohibitive." Edit: Better Source and a quote
hesarenu 7y ago
In india we have UPI, we can pay as small as we want.

jariel 7y ago

Payment friction. Anything +/- 0 by a little bit will be zero because there's huge friction costs in transferring money: + UI complexity, sign up + Transaction costs (VISA, fraud protection) + Financial accounting + Hosting the relevant financial data + Legal issues

ghaff 7y ago
And, arguably, mental transaction costs. Getting people to pay anything at all is a big hurdle to get over whether it's a penny, a dollar, or ten dollars. Clay Shirky wrote way back when that this was the main problem with micropayments and I'm mostly inclined to agree. (It's true that $1 digital music and video rentals for a few dollars were/are something of a thing. But people seem to generally prefer all you can eat subscriptions.) If people were really on board with micropayments, I suspect they could be made to work technically/financially.
- jariel 7y ago
  Yes, definitely. 'Paying money' is not like the old days when you'd flip literally a few cents out of your pocket for some candy. Money transfer in tech comes with huge headaches across the board. Privacy, compliance, international taxation, VAT, risk, etc. etc..
lotsofpulp 7y ago
I like the way Apple Pay works, makes it feel very frictionless as a payer.
- simonh 7y ago
  The OP means friction in the form of costs. Payments go through several hands, the payers bank, the payments networks, the payees bank and each of them incurs costs on the transaction.
tzs 7y ago
> + UI complexity, sign up + Transaction costs (VISA, fraud protection) + Financial accounting + Hosting the relevant financial data + Legal issues In particular, under legal issues: taxes. Sell something online to a person in city/state/country X, and you might be required by X to collect sales tax or VAT on the sale.

dehrmann 7y ago

There's this awkward gap in online service pricing that I hate. I'd like to pay $3 per month for a 100GB Dropbox quota, but Dropbox decided (rationally--I don't blame them) than anyone paying less than $10 per month isn't worth their time. Pretty much all ~consumer services like that are either free or at least $10.

tonyedgecombe 7y ago
I'm the same, these $10 services start to add up quickly. Perhaps Dropbox is better as a feature after all.
diffuse_l 7y ago
I pay ~2$ per 100gb per month on google drive. Standard plan.
- dEnigma 7y ago
  You might pay that amount per 100 GB but you pay more than that in total, i.e. you have more than 100 GB on Google drive, right?
  - Qu3tzal 7y ago
    Nope, I pay 1.99€ / month for 100 GB. No more, no less.
  - diffuse_l 7y ago
    I only have/pay for 100 GB. It's also possible to share the storage with other users.
  - davchana 7y ago
    Nope, I have free 15GB, 2GB x 2 times Security Checkup Bonus from 2017 & some; & pay $20/year; and have total 100 GB (so paying for 100-15-2-2= 81GB)
- occamrazor 7y ago
  Similarly, I pay 1$/month for 100GB on iCloud.

deleted 7y ago

[deleted]

ouid 7y ago

"maybe blockchain will fix it"

hannob 7y ago

There's a very simple reason for this: Payment is complicated and adds overhead. Particularly payment that works for everyone internationally. Every form of payment, no matter in which direction, needs to provide enough benefit to justify the costs of the complexity added by it.

tzone 7y ago
This. If international micro payments, with close to zero transaction fees, really were an option, lot more things would have variable pricing or payouts.
lalaland1125 7y ago
I just also want to note that people shouldn't ignore the psychological cost of paying. Making a decision on whether or not to spend money requires mental effort that doesn't scale down well with price.
- kccqzy 7y ago
  Correct. I once pointed out to my friends who earns a five-digit salary every month (by no means impressive in the Bay Area) that he spent 20 minutes agonizing over a $2 payment. Before I pointed it out he didn't even realize it was irrational.
  - lonelappde 7y ago
    Spending is a repeated game. If you don't agonize, you have to pick either $0 or $2 *N for unknown N.
    - e_y_ 7y ago
      Also frugal habits learned from agonizing over $100 and $10,000 spending sometimes trickle down to those $2 decisions. It becomes an instinct even if it doesn't make sense.
  - onetimemanytime 7y ago

asperous 7y ago

I think most of the microtransaction argument here is forgetting about Swagbucks [1]. I would argue micro transactions are doable, either through networks or payout systems that wait until you have enough for a payout. I believe the real reason is that Google isn't exactly a commodity. People are used to the brand, the user interface, the web url, and maybe the occasional quality or exact flavor of the search results. Because it's not a commodity, people don't just instantly change to whichever site pays the most, and because of that there would have to be a large pay difference for customers to make a switch. Users are basically willing to "forfeight" the money they would get using Swagbucks to use Google. [1] https://en.wikipedia.org/wiki/Swagbucks https://en.wikipedia.org/wiki/Swagbucks

chiefalchemist 7y ago

> It’s obvious why the likes of Facebook and Google don't charge for their products: It costs nearly nothing to transmit... That's not why. They don't charge because it's not lucrative to do so. Charging - however small - would change expectations on SLA, privacy, security, etc. Most importantly, as everyone on HN knows, they can't charge for access to their platform because the platform isn't the product. You and I are the product. Finally, Bloomberg should be more careful with their word choice. They are prestigious enough to know that __nothing__ is free. There is always a cost(s) involved. The transaction might not call for an exchange of financial wampum but that does not make it free.

dieselerator 7y ago
>Finally, Bloomberg should be more careful with their word choice. They are prestigious enough to know that __nothing__ is free. There is always a cost(s) involved. The transaction might not call for an exchange of financial wampum but that does not make it free. I read the article. It is a synopsis of a paper. The word "free" does not appear in the article, and to my reading the author does not imply "free".
- chiefalchemist 7y ago
  Cost zero? That's not free? My point is, free or cost zero...neither exits. There is no free. There is no zero cost. Those are myths. There is always a cost. It might not be tangible (i.e., money) but there is always a cost.

m11a 7y ago

> It’s obvious why the likes of Facebook and Google don't charge for their products: It costs nearly nothing to transmit, say, one Gmail or host, say, one photo on Instagram. This already doesn't make sense. This wrong logic could be extended to every paid service which doesn't rely on an external service, especially SaaS, on the internet. If this reasoning was correct, everything from Zendesk to Superhuman to GitHub (pre-Microsoft pricing) should be free. Development costs money, and hosting overall costs a fair bit of money (because every user doesn't just post one picture, or have one email, and it compounds). The real reason it is free is because they want users, and make more money from ads than they would charging a reasonable price (which would massively cut adoption anyway).

sidlls 7y ago
Yes, I stopped reading at that point. What does the author think the small army of software engineers and researchers that create their products are paid? Nothing?
abvdasker 7y ago
Yes, the premise of this article almost immediately struck me as being quite off base. The economics of pure tech companies at this point are well understood: large up front investment with near-zero (but importantly not actually zero) marginal costs. This article seems to be written by someone who doesn't understand the engineering side of things. At scale, the extremely low cost of serving an individual request ends up being potentially costly in aggregate, which is why the larger a web service gets, the more important performance becomes.

fxj 7y ago

> Broadcast television and radio. At least not in Germany. Every household has to pay a monthly fee even if they dont want to. No opt outs possible. And for music licenses there is GEMA which is also financed by additional charges on empty media like SDcards or Hard disks. Also no opt out possible. Google/youtube was fighting it and they finally lost the battle. So in principle the IP Providers could be forced to pay a monthly fee for internet searches and social media. For mobile networks this is already discussed. It seems that the EU doesnt like the free services from the SV giants and will fight them in the time to come. The GDPR was only the beginning. The next one will be more about the money.

numlock86 7y ago
> At least not in Germany. Every household has to pay a monthly fee even if they don't want to. No opt outs possible. Yes, but you can simply not pay that. I've been doing that for decades now. They send you scary reminders and say things like "Hurr durr, we are going to impount your wage!" but that's where it already ends. Just send them GDPR requests which they can't/won't reply to on a regular schedule and they are actually the ones that have to deliver/comply first before anything else. Side note: My household and car are broadcast/radio free and I don't consume these on the internet either.
- fxj 7y ago
  Of course you can, but it is illegal by german law. And german citizens do not like to commit illegal things. ;-)
  - alanfranz 7y ago
    You can if you don't use such services. Then it's legal.
    - johannes1234321 7y ago
      That was previously. Since 2013 it is mandatory for each household (Exceptions for disabled, people on social security, etc.) as well as mandatory for business premisses. The assumption is that everybody owns a media receiver (since computer+internet counts as well, as there is streaming) and since running the infrastructure is seen as a public service.

sweeneyrod 7y ago

I think another reason that Google et al don't pay customers is because they might realise how much their data is worth and get uppity.

gweinberg 7y ago

This article's only value is as a counterexample to the assertion "there are no stupid questions." Not charging (or paying) people at all is not the same as charging them zero, you have to be being deliberately obtuse to pretend that it is.

jonplackett 7y ago

It’s just friction. Zero just means no payments have to take place. It’s tv e friction that puts people off not the amount of money

Scoundreller 7y ago

The MER cost of an ETF could go below zero too. Many make some extra money from securities lending. In theory a regular shareholder could earn this money too, but it's not worthwhile except at scale. But I doubt anyone other than Vanguard would do this at scale.

SwellJoe 7y ago

I've gotten to the point where I automatically and instantly discount any theory that proposes blockchain as a solution. I'm not saying blockchain technology will never be a good solution to a real world problem, but I have noticed that it is very often an ignorant assertion of faith rather than an argument based in fact. It walks like a religion and quacks like a religion, so I'm not sure why I should think it's something other than a religion.

OrgNet 7y ago
but religions are based on lies... the blockchain is just pure math/science...
- SwellJoe 7y ago
  I thought I was clear, but perhaps I can explain better: Blockchain is very often suggested as a solution to a social or ethical problem, absent any evidence that it can solve those problems (or can solve them better than existing law/contract/trust-based solutions). Kinda like religion. Blockchain is real, in the same way any other algorithm or technology is. Saying it will solve people being jerks is superstition.
m11a 7y ago
> It walks like a religion and quacks like a religion, so I'm not sure why I should think it's something other than a religion. This is such a good way to describe the current state of blockchain. It's a cult. And mostly spread around by people who are trying to increase the price so they can sell and profit off other people. It's a giant ponzi scheme, and wealth redistribution. But I think the technology has promise. We just haven't bothered explore real applications of it, because we're too busy trying to use it to make a quick buck at someone else's expense.

gumby 7y ago

There's a lot of evidence that the bigger factor is transaction cost. People consume more under all-you-can-eat plans than per-transaction plans (e.g. internet service) even though the unmetered plans may cost more, simply because they don't want the mental overhead. People will drive out of their way to avoid a tool bridge even if the toll costs less than the cost of operating their vehicle for the other route. All that billing infrastructure costs money as well. Think of how much of the phone and TV cable networks is consumed by nothing but managing tollbooths? The post from Stratechery yesterday made this point differently: when credit cards were introduced merchants liked them because they no longer needed the (pre-computerized in those days) infrastructure and headcount of billing customers, checking credit, etc.

gotdvoted9392 7y ago
This all feels like the usual ignorance of externalities. Which feels like ignorance of information not in front of us. This is Adam Smith’s fear of division of labor taken to extremes making ignorant stupid humans. We’re allowed a tiny little sliver of the information needed to make wise decisions, told to defer to others for everything else. It’s described in a variety of ways going back years. We’re not observing much new from humanities social norms. It’s that more people are able to learn and read about it than before. And our tech is nicer. Politically the world still works in the usual ways though.
inetknght 7y ago
> People will drive out of their way to avoid a tool bridge even if the toll costs less than the cost of operating their vehicle for the other route. It's not just the mental overhead here. I specifically avoid toll roads because I think their concept is fundamentally wrong. I pay taxes to pay for roads and their maintenance. I shouldn't have to pay more taxes ("tolls") to pay to use those roads. If it's a private road then it should be marked as such. The public shouldn't be permitted to drive on private roads marked as if they're a interstate or state highway or anything like that. It's deceptive and profiteering off of what the government already provides: transportation infrastructure. And it absolutely should not be permitted for a private entity to purchase an existing road and turn it into a tollway.

alecbenzer 7y ago

I've never heard an email sent via Gmail referred to as a "Gmail" before.

zamadatix 7y ago
It's a common thing to happen and I've noticed it a lot with middle age non tech crowds. It's not a new phenomenon overall but people talk about how their son made a YouTube or they sent a Gmail quite regularly. For some reason tech folks find it natural to use the verbs (e.g. I googled/youtubed it) but not the nouns. It doesn't always require the service have 100% market dominance either, just that it be popular enough people hear others use it and commonly used in exclusivity by the user.
- TylerE 7y ago
  This must be a local thing. I've never heard "gmail" used as a verb, ever, by any one of any age.
  - zamadatix 7y ago
    It's not really a local speech pattern thing it has more to do with associating <product name> with <name of tool>. If you can think of examples for a dozen other traditional products (kleenex, ketchup, jello, aspirin..) it shouldn't be hard to imagine that people do it for gmail and technology products/services. It's also certainly not unheard of though it is still less popular than traditional "emailed" https://trends.google.com/trends/explore?date=all&geo=US&q=how%20to%20send%20a%20gmail,how%20to%20send%20a%20email https://trends.google.com/trends/explore?date=all&geo=US&q=h...
    - TylerE 7y ago
      That's a different part of speech. No one says they're going to "Kleenex their nose" or "aspirin their headache" so why would they "gmail their friend"?
      - 7y ago

m463 7y ago

There are a lot of reasons things cost zero. I think one is complements[1] (if the price of jelly goes down, peanut butter sales increase) Apps are complementary to iPhones, so if Apple drives the cost of apps to zero, they sell more iphones. For Google, if data sales are complementary to services, making the services free makes data sales rise. Only thing I've noticed though is that free is associated with lots of unintended consequences. Free electric car charging means it's hard to reliably charge your car. Free web services means nobody gets good customer service. Even a modest co-pay leads to significant cost savings for insureres because free visits can easily tie up all health-care resources. [1] https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/ https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/

carapace 7y ago

Apparently bus fares in San Francisco just cover the costs of collecting the fares. When a recent Mayor attempted to just make the buses free he was told it was impractical because they would become "rolling dumpsters".

Igelau 7y ago

I got paywalled. Guess I'll never know!

SeekingMeaning 7y ago

http://archive.ph/JbFkn http://archive.ph/JbFkn

chrismmay 7y ago

I've been paid a total of 35 BAT (~$8) for using the Brave browser since October '19. STEEM was supposed to be like Facebook, but you get paid. It turned out to be more of a "rich get richer" ecosystem, so I stopped using it. Facebook's Libra may yet turn out to be a way for people to get paid for using Facebook. I stopped using Facebook entirely following all the negative press. I only recently signed in to strengthen my password and enable 2FA. I don't use it anymore at all. Maybe I would start again if they paid me.