
Show HN: Progressive paywall using bitcoin microtransactions - powertry
http://klipperapp.com/static/pp/
======
drewcrawford
Somebody in the media industry tell me I'm wrong, but I don't think news
companies (e.g. your customers) actually _want_ this.

If I subscribe to the NYT for $5/month, then in order to "get my money's
worth", I use NYT as my primary source for news. I visit newyorktimes.com
every day and see what today's stories are.

After 30 days of that, I am an NYT user "by habit" and thus a loyal customer.
I'm not clicking through news aggregators as much anymore, because NYT.com is
obviously better I tell myself, or else why am I paying $5/month for it? NYT
wants customer loyalty to their brand so they get that consistent income and
sign long deals with their advertisers.

This sounds a lot like cable "unbundling", which consumers want (or say they
want) but Comcast will offer it over its dead body.

Now maybe you can sell this to independent blogs. But TipJoy (YC 08) tried
that and went bust, so it's an uphill road.

~~~
aronvox
We were thinking about independent blogs, our thinking is very much on the
unbundling lines.

We are trying to build this around summarization tech (text, audio, images,
video, etc), you see some quality of the good before you buy it. Sort of
window shopping for content, like it then you read more.

Thanks for you thoughts! Appreciate it :).

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onion2k
The main problem with micro-transactions is "represented value" \- if
something doesn't cost very much then the perceived value of the item is very
low so it ends up looking like you're charging for something that isn't really
worth the cost. For the majority of people $10/month for 100 articles
represents better value than $.10 per article even though they're actually the
same.

~~~
aronvox
So, another way of looking at it is the app store/app upgrades way. You pay
using smaller increments, but have a view of the goods that you are buying. So
instead of a future commitment, its more about paying for what you want now.

If its seamless, then micro transactions work. It also implies you are
distracted enough not to do a future projection of the longer term aggregate
costs incurred :).

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ErikHuisman
You should look at [http://blendle.nl](http://blendle.nl) same concept. All
mayor newspapers in the Netherlands use it. After reading an article you can
choose to not pay it for several reasons (link bait, not readable, clicked by
accident, too short, too long etc). Articles cost between 10 and 95 cent.

~~~
aronvox
Can't read :(, Not in english. But that is awesome to hear! Will try to read
more about them and maybe get in tough. Thanks.

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kijin
Isn't this the same trick that some newspapers and magazines have been using
for ages? Show the title and the first paragraph or two, hide the rest of the
article behind a paywall.

On the surface, the most noticeable difference is that this uses BTC instead
of USD. But since the example amount (0.0005 BTC) is approx. $0.22, which is
well within the range of a PayPal micropayment, there's little reason why it
can't use USD instead.

So the real innovation here is not the choice of currency, but rather that
you're using micropayments. If done right, this can eliminates the friction of
purchasing a subscription. Since $0.22 is literally pocket change, you might
even be able to make people pay a lot without knowing it. All those quarters
and dimes can add up to a sizable sum.

Realistically, however, it will be too much hassle for readers to shell out
money every time, and too much hassle for publishers to manage all those
micropayments. So there might be a valid business model for a middleman that
lets people keep money in a prepaid account and spend it little by little with
participating publishers. You could even automatically deduct a small amount
each time someone opens an article and keeps it open for X seconds. At the end
of each month, each publisher receives a lump sum that is much easier for them
to manage. You, the middleman, deduct a fee for providing the API and some
neat statistics.

~~~
RegW
> Realistically, however, it will be too much hassle for readers to shell out
> money every time, and too much hassle for publishers to manage all those
> micropayments. So there might be a valid business model for a middleman

True, but there is still the feeling that you might be going through the pain
of signing up and putting a chunk of money down upfront for something that you
might not find useful. Of course that fear goes away if it takes off and gains
a good reputation.

I think I would would be more inclined to try a service (aggregate or
otherwise) that rewards the pain of sign up with a certain amount of free
content per month. Then require payment beyond that.

Another approach would be free access to older content. No one pays for old
newspapers, but you can judge the quality of the content.

~~~
kijin
Good idea. Since what I'm suggesting is essentially a hybrid of the
subscription model and the pay-as-you-go model, a certain amount of free
content per month could be a useful feature to borrow from typical
subscription models.

------
ds9
Compliments on making it a deal for the "whole piece" instead of per-page. The
latter invites a scam where sites would break an article into many small
segments, and when the vistor finds out, he/she has paid for at least one
already.

There are some other problems tho. A participating site won't show anything
unless it sends the visitor's data to (a) the micropayment company and (b)
google (at least, the demo won't work without requests there)? There's too
much tracking on the web already. Of course, not everyone cares about this and
it may become popular with the non-privacy-conscious public.

Other problems are more subtle. Sites using this would be likely to tailor
content to maximize revenue - attention-grabbing titles, sensationalism -
while some readers prefer qualities that are found where the motives are less
commercial.

And of course, this is not likely to reduce ads. A site owner might try to go
with this alone, but soon would be subject to economic pressure to include ads
as well.

~~~
aronvox
Thanks! We want the consumer to get a feel of the article quality early on.

We think the algorithm to summarize is resistant to tailoring due to some core
assumptions we are making. We are not dependent on the title and so on.

If such a system gets adopted, it would to some extent clear up the insanity
that is ads on good articles no matter where its posted.

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PythonicAlpha
Currently this kind of embedding (user interface) could cause some problems in
some countries like Germany.

In Germany there is a law that when any contract of purchase is made on the
web, the decisive button must conform to strict regulations. That is because
in the past there where many frauds in Germany where contracts where made by
clicking some buttons with and giving the address of the customers that lead
to huge recurring costs -- and the customers believed that they just joined a
user base without costs. To prevent such frauds, this law was given, but the
regulations are rather strict. So the button must clearly tell, that a sale is
to be made. I believe thus, a service like in the demo would be illegal in
Germany.

~~~
aronvox
Interesting, this would also put across our argument to use bitcoins maybe?
and not regular currency transactions.

~~~
PythonicAlpha
I don't know if I understand you right (my English is not perfect), but when
you mean, that using Bitcoin could prevent this from being illegal: I don't
think so. The problem is not the amount of payment or the type of payment, but
that it is a sales contract (at least in Germany, every sale would be made via
a contract, if explicitly written or not -- also a handshake could be seen as
contract). And the law just says, how any sale contract must be made ... There
must be a good visible button that clearly states the intention: "Buy with
costs" or something similar. The customer must be very clearly informed about
the sale and the fact that he is making a sale now. Your demo informs
afterwards in a rather weird way. Just giving a link and say "read further" or
similar would be accounted to be a fraud, I guess. I am also not sure that
having a different text would be enough.

I am no lawyer, but one remedy could be to have some kind of "frame contract"
where you buy an amount of readings in advance -- and the readings afterwards
could be accounted for with such a system. But such a frame contract would of
course counter your ease of use goal -- and of course would bind the customers
what would counter your goal to lower barriers.

~~~
aronvox
Okay, I got what you said. Yeah, any intermediate step would kill the seamless
experience :(. Will need to figure this out, thanks!

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PythonicAlpha
I often read that the Bitcoin system has limits for the amount of transactions
processed worldwide in a given time frame. I think it has to do with the block
chain and the mining, but I am no expert in this topic.

When such payment systems spread, couldn't they overburden the system?

To make it clear: I am a huge friend of alternative payment systems,
particularly if they make it possible to have smaller amounts paid on the web
without hassle and with less transaction fees. But there are always the people
that warn against Bitcoin because of diverse reasons (keywords: inherent
limits, Ponzy scheme).

What do you think/know?

~~~
aronvox
I don't think that should be a problem? In any case we will allow the
publisher to use any other micro transaction system that they are
"comfortable" with :).

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highace
What happens if I don't have any bitcoins to pay with?

~~~
codecondo
presumably, you're out of luck. I don't think this particular monetizing model
is very viable these days, except for really high-quality content/websites,
which probably have better deals already, anyway.

~~~
powertry
Not too sure about that, I do think that pay wall tech has stalled for
sometime now.

How does one charge for consuming content on the internet? We think that
consumers can potentially see the goods(in this case the summary) before
acquiring or buying it whole.

The high quality sites pretty much run on trust, the other long tail of sites
that want to monetize have to cram in ads. Time to change that?

------
daveid
>Patented technology

Did you patent paywalls?

~~~
powertry
Yeah, that may sound misleading without context. Its the algo we are in the
process of patenting.

~~~
aw3c2
Please don't! Software patents are not good for our society and community.

~~~
aronvox
We do agree, but its been tough trying to get the broad investor community to
see value/ability without building fences around your core tech. Some even see
this as validation. We don't.

Not too sure how others feel about this, this specific advice has come from
fellow entrepreneurs who have managed to figure things out (i.e. raising,
team, etc).

