4 ms·

I was the lead for a large tech company's efforts in this area for a few years (not anymore, so take my comments with a grain of salt). I spoke to many of the m

by vrc 7y ago

I was the lead for a large tech company's efforts in this area for a few years (not anymore, so take my comments with a grain of salt). I spoke to many of the major publishers globally as well as some niche site aggregators, aggregated local news players, etc. The challenges were manifold. They are linked between what publishers are succeeding with and what users want. On the publisher side: Large players were already making good money off of subscriptions and so micropayments would undercut that. They often didn't want to co-brand/co-market in any bundle or even under the same product umbrella with most other major players for brand/other reasons (owning the relationship with the customer was very important and they didn't want to be disintermediated anymore), and they often didn't want to be associated with medium to small publishers because they felt that was free-riding and diluting their brand. But most importantly, they were confident, as can be seen in articles like these, that ultimately, they could go it alone and therefore should. As for small to mid-sized publishers -- the problem really was that there wasn't enough meat on the bone in terms of willing-to-pay-traffic to warrant a service provider building a business around it. I think there could be a viable, non-venture product to be built if you can find the right bundles of niche pubs to band together. On the consumer side: Enough people are slowly willing to pay the high fees for the big sites to not be worth investing in lower tier options. Not enough people are willing to pay enough for smaller sites to be worth their while. Many people logically say they are willing to pay a small fee for sites; for example, let's say publishers were charging $0.01 - $0.05/pageview -- you'd logically say that's reasonable amount to pay, you'd be shocked how few people will opt for that, and how many folks who do opt for that feel a sense of sticker shock when they see the bill. Other issues: Actually charging consumers on a micro-level is a huge pain if you charge in currency, and from what I've seen now having worked in crypto, it will take a while before that model makes sense to the average consumer. Happy to discuss more.

inapis 7y ago
There’s decision fatigue on parts of consumers too. Should i pay for this now or not? If the publisher demands payment after the fact, then they barely have any leverage in the transaction. If before, there’ll be a lot of hemming and hawing (like the app store). In addition people balk at the subscription price compared to netflix. They forget that there’s still a price floor to production and a publishers audience is smaller (and maybe geographically restricted) while netflix has massive economies of scale and can amortize its cost over the entire population. I’m seeing this kind of pricing disparity everywhere (the app store, publishing and what not). I don’t know what’s the solution. Bigger companies have distorted pricing expectations of consumers, especially when so many services/apps are available for free supported with ads.
- vrc 7y ago
  Yeah. The only way to overcome this is to bundle. And bundling with pubs is hard. How can I charge a single, Netflix like payment to access content from huge publishers (NYT, WaPo) and small niche blogs? How do I divvy the cash up? What's worse, because a lot of the web content that people want in this bundle is time-sensitive, I can't just build a content catalog by licensing syndicated hits like "Friends" equivalents to buoy the rest. These were exactly the issues these projects face.
pseingatl 7y ago
5 cents per page views quickly adds up--20 views is a dollar. But if you charged 10 mills, the cost would be negligible to the reader, but given the Internet's numbers, these soon turn into real value. A "mill" is a thousandth of a dollar. One thousand page views equals $1.
- tacheiordache 7y ago
  Thats exactly what i was thinking too. Advertising doesnt make them much more and it comes with a lot of hassles. Im surprised a micropayment system hasn’t arisen yet
  - vrc 7y ago
    Here's one challenge with micropayments: how do you charge micros? There are a few challenges here. One, the cost of payment processing is high, and so you can't "pay as you go". If you bill in arrears, you may still face this problem, your customer may be upset or dispute the final bill (was a page reload billed when they believe it shouldn't be?, etc), or customers may default and you have to foot the bill. The other option (which we and others tried) was to up-front charge a fixed rate, say $5, and debit against it as you go. Perhaps you "top up" when the account balance hits some threshold. This is analogous to how many toll payment systems worked in the US, so the assumption is customers will understand and accept it. It also solves the payments processing problem. We uncovered three psychological issues in our research and implementation with large numbers of users: 1) People will be unhappy suddenly paying for something they never had to pay for before (trying to analogize with tolls is equivalent to the "cost of a coffee" pricing strategy) 2) People are very particular in terms of which sites they want to micro-pay for, but shockingly unwilling to choose them a-la-carte 3) People HATE variable payment schedules. People didn't like seeing charges hitting their cards when the top-up threshold was reached at unexpected times, then proceeded to complain about what sites they were billed for and how we determined billing and then churned. There's another challenge to mass adoption for micropayment systems and it's around publisher compliance and the publisher-user relationship micropayments represent: how to get money into the hands of the publishers. If you rely on every pub to sign up, that's not going to work. And if users realize that they're paying into escrow accounts that these service providers control and that aren't going to the publishers, they'll mutiny.
pm90 7y ago
> and from what I've seen now having worked in crypto, it will take a while before that model makes sense to the average consumer. Its hard to forecast these things, but micropayments for online published content seems like the one thing I do really see cryptocurrencies doing a great job. Often, its not just that people are unwilling, but that their payment systems are just not an option. This would perhaps also allow publishers to stop the practice of selling user data for advertisement... although, I wouldn't really count on that.

by vrc 7y ago

inapis 7y ago

There’s decision fatigue on parts of consumers too. Should i pay for this now or not? If the publisher demands payment after the fact, then they barely have any leverage in the transaction. If before, there’ll be a lot of hemming and hawing (like the app store). In addition people balk at the subscription price compared to netflix. They forget that there’s still a price floor to production and a publishers audience is smaller (and maybe geographically restricted) while netflix has massive economies of scale and can amortize its cost over the entire population. I’m seeing this kind of pricing disparity everywhere (the app store, publishing and what not). I don’t know what’s the solution. Bigger companies have distorted pricing expectations of consumers, especially when so many services/apps are available for free supported with ads.

vrc 7y ago
Yeah. The only way to overcome this is to bundle. And bundling with pubs is hard. How can I charge a single, Netflix like payment to access content from huge publishers (NYT, WaPo) and small niche blogs? How do I divvy the cash up? What's worse, because a lot of the web content that people want in this bundle is time-sensitive, I can't just build a content catalog by licensing syndicated hits like "Friends" equivalents to buoy the rest. These were exactly the issues these projects face.

pseingatl 7y ago

5 cents per page views quickly adds up--20 views is a dollar. But if you charged 10 mills, the cost would be negligible to the reader, but given the Internet's numbers, these soon turn into real value. A "mill" is a thousandth of a dollar. One thousand page views equals $1.

tacheiordache 7y ago
Thats exactly what i was thinking too. Advertising doesnt make them much more and it comes with a lot of hassles. Im surprised a micropayment system hasn’t arisen yet
- vrc 7y ago
  Here's one challenge with micropayments: how do you charge micros? There are a few challenges here. One, the cost of payment processing is high, and so you can't "pay as you go". If you bill in arrears, you may still face this problem, your customer may be upset or dispute the final bill (was a page reload billed when they believe it shouldn't be?, etc), or customers may default and you have to foot the bill. The other option (which we and others tried) was to up-front charge a fixed rate, say $5, and debit against it as you go. Perhaps you "top up" when the account balance hits some threshold. This is analogous to how many toll payment systems worked in the US, so the assumption is customers will understand and accept it. It also solves the payments processing problem. We uncovered three psychological issues in our research and implementation with large numbers of users: 1) People will be unhappy suddenly paying for something they never had to pay for before (trying to analogize with tolls is equivalent to the "cost of a coffee" pricing strategy) 2) People are very particular in terms of which sites they want to micro-pay for, but shockingly unwilling to choose them a-la-carte 3) People HATE variable payment schedules. People didn't like seeing charges hitting their cards when the top-up threshold was reached at unexpected times, then proceeded to complain about what sites they were billed for and how we determined billing and then churned. There's another challenge to mass adoption for micropayment systems and it's around publisher compliance and the publisher-user relationship micropayments represent: how to get money into the hands of the publishers. If you rely on every pub to sign up, that's not going to work. And if users realize that they're paying into escrow accounts that these service providers control and that aren't going to the publishers, they'll mutiny.

pm90 7y ago

> and from what I've seen now having worked in crypto, it will take a while before that model makes sense to the average consumer. Its hard to forecast these things, but micropayments for online published content seems like the one thing I do really see cryptocurrencies doing a great job. Often, its not just that people are unwilling, but that their payment systems are just not an option. This would perhaps also allow publishers to stop the practice of selling user data for advertisement... although, I wouldn't really count on that.