7 ms·

Charging for things on the web

67 points by jcsalterego 15y ago

michaelchisari 15y ago
A somewhat off-topic rant, because the site is down, but hear me out: What I wouldn't give for a decent micropayments platform. One that would allow me to pay $0.50 a month for an ad-free social network. Facebook currently averages around $0.25 a month in ad revenue per user, so it'd double that income. Let me pay $0.25 a month to subscribe to a blog. Let me pay $1.50 a month to subscribe to the New York Times. Let me tip $0.10 for an article I like, or pay $0.75 for lifetime access to a forum. We've heard a lot about how "if you're not paying, then you are the product." Well, give me the option to pay, and never have to see an ad, or have my data mined and sold to advertisers. I would pay gladly. I looked into different ways to do this, and the tech would not be hard. It's really more of a business and legal issue than anything. But I really think it would change the web, and for the better. Sometimes, really cheap is better than free. As in beer, anyways.
- alexkay 15y ago
  Check out http://flattr.com/ http://flattr.com/
- thirdhaf 15y ago
  It seems like one of the prerequisites for a workable micropayment system is an overhaul of interbank payment processing system or establishment of a new one. I have absolutely no knowledge of the current system but I'd be shocked if the same system that manages $100k+ transactions and the risks associated with that can cost effectively process transactions in the <10c range. There was a comment on the same level as this one referring to flattr.com which seems to be one attempt at a micropayment system. Does anyone have experience with this service or failing that an idea why that comment got absolutely buried under downvotes?
  - michaelchisari 15y ago
    I have an idea on how to handle it in bulk payments, as opposed to individualized transactions. But really, this is not the kind of space where a startup could compete. You'd need someone with the legal and financial backing the size of Google to make it happen.
    - icebraining 15y ago
      Flattr does exactly that (bulk payments). It's just not well adapted for payments since you don't pay a fixed amount to each website but a fraction of a certain fixed amount divided by all the buttons you've clicked on that month.
  - alexkay 15y ago
    My comment wasn't downvoted, it was automatically deleted (as were most of my recent comments). If HN admins read this, I would be grateful if you could check why it's happening. As for the actual question, to succeed Flattr needs a significantly larger user base. I use it for an open-source project of mine and have got only a couple of flattrs so far, even though the downloads are measured in thousands.
- maximusprime 15y ago
  I doubt you'd manage to get even 0.01% to pay for social networking. It would likely be more trouble than it's worth, compared to being advertising supported.
  - michaelchisari 15y ago
    The only thing keeping people from paying $0.50 to remove ads and data mining is a system frictionless enough to let people do it easily. The cost is not in any way prohibitive. Make it a single click, and a barely noticeable $0.50 monthly charge and I think a lot of people would sign up.
    - danmaz74 15y ago
      I'm all in favor of micropayments, but we also have to keep in mind that if people pay, they could expect more service/customer care.
    - maximusprime 15y ago
      You're assuming they make less than $0.50/month out of those people from ads...
      - rogercosseboom 15y ago
        I wish I could find the source, but its documented somewhere on The Nets that this is roughly what they make– perhaps a bit less.
- jfarmer 15y ago
  Funny you picked $0.50. At Facebook's current revenues, that's about how much each person would have to pay for month for them to be making as much as they're making now, if you took away all the other cash streams.
  - michaelchisari 15y ago
    Nothing funny about it, it's a number calculated deliberately.
- rudasn 15y ago
  You also have the problem of perception: The "mental cost" of having to pay facebook every month 50c is far greater than the financial cost (in this case, the 50c). I think this was one of the problems flattr.com tried to solve but not successfully. Have a centralised "bank" (eg. flattr) that would collect everyones 50c and then distribute them accordingly. The user purchases credits from the bank and the bank gives money to the providers in a way that keeps the "mental cost" at zero (or minus zero, if you actually feel happy at the end of the month).
- danssig 15y ago
  What would stop them from just putting ads back in in a few years and making 3 times as much money?
  - icebraining 15y ago
    The fact that people would stop paying?
- petervandijck 15y ago
  It's called the app store.
- joebadmo 15y ago
  I think the problem is that, no matter how small the payment, it's some nonzero amount of friction for growth. Not only are you putting a paywall up between nonusers and content, you're asking me as a user to put my stuff behind your paywall. I think ad-supported just works better with the 'link-economy' and architecture of the web.
alexwolfe 15y ago
Design is really well done. Over what period of time did it take you to develop the site? I know you said 400-500 hours but was that over 3 months, 6 months, a year?
revorad 15y ago
That's really great. Over how many months, did you make that money?
pedalpete 15y ago
I often struggle with this as well. It is just so much easier to give something away than charge for it, and if you want your products to be used, you try to limit the pay barrier. Dustin is absolutely right that people will pay, but you have to make it easy for them. I always look at the success of iTunes as the prime example. There is no shortage of free music (even if you don't include stealing), and yet people have happily paid to buy their music because it doesn't ask very much of them at all.
nicksergeant 15y ago
Mirror?
jasonfried 15y ago
Charging for things forces you to be better. That's the right kind of pressure.
notJim 15y ago
This is a topic I'm quite interested in. I've had many product/project ideas that I think have merit, and a few that I think could be a viable business, but I simply cannot get behind the idea of giving something away for free for the ad revenue. To me, when I build a product, my personal ethos (and this is personal to me, not a moral judgment by any means) is that I want to build something for my customers that they will love and pay for. If that means I have fewer customers, then so be it, but dammit I want my customers to be my customers, not my product.
mise 15y ago
Stripe is cool. There are other quick ways without much programming. Slap up a PayPal button, and connect it with E-Junkie, and you can be selling a download product today.
MatthewPhillips 15y ago
My Chrome Web Store app has 4000 users, in a couple of months. The previous pay version has about 15. Charging for stuff on the web works if you have a massive reach that comes with things like being on TechCrunch. This project also benefited from being a vanity purchase.

67 points by jcsalterego 15y ago

A somewhat off-topic rant, because the site is down, but hear me out: What I wouldn't give for a decent micropayments platform. One that would allow me to pay $0.50 a month for an ad-free social network. Facebook currently averages around $0.25 a month in ad revenue per user, so it'd double that income. Let me pay $0.25 a month to subscribe to a blog. Let me pay $1.50 a month to subscribe to the New York Times. Let me tip $0.10 for an article I like, or pay $0.75 for lifetime access to a forum. We've heard a lot about how "if you're not paying, then you are the product." Well, give me the option to pay, and never have to see an ad, or have my data mined and sold to advertisers. I would pay gladly. I looked into different ways to do this, and the tech would not be hard. It's really more of a business and legal issue than anything. But I really think it would change the web, and for the better. Sometimes, really cheap is better than free. As in beer, anyways.

alexkay 15y ago
Check out http://flattr.com/ http://flattr.com/
thirdhaf 15y ago
It seems like one of the prerequisites for a workable micropayment system is an overhaul of interbank payment processing system or establishment of a new one. I have absolutely no knowledge of the current system but I'd be shocked if the same system that manages $100k+ transactions and the risks associated with that can cost effectively process transactions in the <10c range. There was a comment on the same level as this one referring to flattr.com which seems to be one attempt at a micropayment system. Does anyone have experience with this service or failing that an idea why that comment got absolutely buried under downvotes?
- michaelchisari 15y ago
  I have an idea on how to handle it in bulk payments, as opposed to individualized transactions. But really, this is not the kind of space where a startup could compete. You'd need someone with the legal and financial backing the size of Google to make it happen.
  - icebraining 15y ago
    Flattr does exactly that (bulk payments). It's just not well adapted for payments since you don't pay a fixed amount to each website but a fraction of a certain fixed amount divided by all the buttons you've clicked on that month.
- alexkay 15y ago
  My comment wasn't downvoted, it was automatically deleted (as were most of my recent comments). If HN admins read this, I would be grateful if you could check why it's happening. As for the actual question, to succeed Flattr needs a significantly larger user base. I use it for an open-source project of mine and have got only a couple of flattrs so far, even though the downloads are measured in thousands.
maximusprime 15y ago
I doubt you'd manage to get even 0.01% to pay for social networking. It would likely be more trouble than it's worth, compared to being advertising supported.
- michaelchisari 15y ago
  The only thing keeping people from paying $0.50 to remove ads and data mining is a system frictionless enough to let people do it easily. The cost is not in any way prohibitive. Make it a single click, and a barely noticeable $0.50 monthly charge and I think a lot of people would sign up.
  - danmaz74 15y ago
    I'm all in favor of micropayments, but we also have to keep in mind that if people pay, they could expect more service/customer care.
  - maximusprime 15y ago
    You're assuming they make less than $0.50/month out of those people from ads...
    - rogercosseboom 15y ago
      I wish I could find the source, but its documented somewhere on The Nets that this is roughly what they make– perhaps a bit less.
jfarmer 15y ago
Funny you picked $0.50. At Facebook's current revenues, that's about how much each person would have to pay for month for them to be making as much as they're making now, if you took away all the other cash streams.
- michaelchisari 15y ago
  Nothing funny about it, it's a number calculated deliberately.
rudasn 15y ago
You also have the problem of perception: The "mental cost" of having to pay facebook every month 50c is far greater than the financial cost (in this case, the 50c). I think this was one of the problems flattr.com tried to solve but not successfully. Have a centralised "bank" (eg. flattr) that would collect everyones 50c and then distribute them accordingly. The user purchases credits from the bank and the bank gives money to the providers in a way that keeps the "mental cost" at zero (or minus zero, if you actually feel happy at the end of the month).
danssig 15y ago
What would stop them from just putting ads back in in a few years and making 3 times as much money?
- icebraining 15y ago
  The fact that people would stop paying?
petervandijck 15y ago
It's called the app store.
joebadmo 15y ago
I think the problem is that, no matter how small the payment, it's some nonzero amount of friction for growth. Not only are you putting a paywall up between nonusers and content, you're asking me as a user to put my stuff behind your paywall. I think ad-supported just works better with the 'link-economy' and architecture of the web.

alexwolfe 15y ago

Design is really well done. Over what period of time did it take you to develop the site? I know you said 400-500 hours but was that over 3 months, 6 months, a year?

revorad 15y ago

That's really great. Over how many months, did you make that money?

pedalpete 15y ago

I often struggle with this as well. It is just so much easier to give something away than charge for it, and if you want your products to be used, you try to limit the pay barrier. Dustin is absolutely right that people will pay, but you have to make it easy for them. I always look at the success of iTunes as the prime example. There is no shortage of free music (even if you don't include stealing), and yet people have happily paid to buy their music because it doesn't ask very much of them at all.

nicksergeant 15y ago

Mirror?

jasonfried 15y ago

Charging for things forces you to be better. That's the right kind of pressure.

notJim 15y ago

This is a topic I'm quite interested in. I've had many product/project ideas that I think have merit, and a few that I think could be a viable business, but I simply cannot get behind the idea of giving something away for free for the ad revenue. To me, when I build a product, my personal ethos (and this is personal to me, not a moral judgment by any means) is that I want to build something for my customers that they will love and pay for. If that means I have fewer customers, then so be it, but dammit I want my customers to be my customers, not my product.

mise 15y ago

Stripe is cool. There are other quick ways without much programming. Slap up a PayPal button, and connect it with E-Junkie, and you can be selling a download product today.

MatthewPhillips 15y ago

My Chrome Web Store app has 4000 users, in a couple of months. The previous pay version has about 15. Charging for stuff on the web works if you have a massive reach that comes with things like being on TechCrunch. This project also benefited from being a vanity purchase.