
Misunderstanding Micropayments (2003) - Tomte
http://www.scottmccloud.com/3-home/essays/2003-09-micros/micros.html
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jqgatsby
@pg recently tweeted: "Prediction: Micropayments will happen, but the main
beneficiaries will be new publications created to take advantage of them."

I'd love to hear from him and any others who think the time has come (or not),
and what has changed or still needs to change. Such a huge percentage of CPC
advertisements seem to me to be predatory, and yet that is what pays for
Google, among others...

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pjc50
Shirky seems to have been entirely right. Microtransactions haven't really
succeeded except inside games - and there they're successful but unpopular.

~~~
ghaff
And, arguably, they've "succeeded" (for certain meanings of success) because
the mental transaction costs are offset by the perception of sunk costs.

~~~
pjc50
It's interesting to ask "what are people buying, if it's not exactly the game
itself?"

Extensive research has been done on this and there seem to be various things
that come up as popular ways of extracting money. Paying to overcome a slowly
raising artificial barrier. Social status in competitive games. Gambling,
usually disguised as "crates". "Whales". And kids who don't understand what
they're doing but have been left alone to press the button that spends money.

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justinhj
You forgot "entertainment"

~~~
true_religion
Gambling is entertainment.

~~~
justinhj
And many people that play games with micropayments are doing so for
entertainment. So why not mention the main and positive reason that people
play games?

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mavhc
Of course the bitpass website is dead, as are micropayments. Now we have all
you can eat subscriptions.

I think the fundamental issue is there's too much stuff, if item A costs
money, items B-Z are also available for free.

Bandwidth costs appear to be 0 now, you can pay to listen to music without
also downloading a video, or download the video to listen to it for free.

~~~
sdenton4
Bandwidth costs are highly dependent on where you live and what you can pay
for. In most of the developing world, people access internet through their
phones primarily, on prepaid plans costing about $5 per gigabyte, which can be
a significant part of a monthly income.

~~~
sleepyhead
Where? In Cambodia 1.4gb costs $1.50. That's the cheapest I encountered but
other developing countries in South East Asia isn't that much more expensive.
Even Myanmar which has been on lockdown for decades and only recently got
public sim cards is affordable for data.

[http://www.cellcard.com.kh/en/prepaid-
plans/xg/](http://www.cellcard.com.kh/en/prepaid-plans/xg/)

~~~
sdenton4
Kenya, for example, has 500Ksh for a GB, which comes to about $4.92, USD; this
is comparable to rates I encountered elsewhere in SSA.

Meanwhile, the less money you have, the more you pay! Smaller bundles cost
more per GB, and many of the Kenyans I knew would regularly buy 150MB top-ups
due to lack of upfront funds.

On AirTel in India, it looks like they charge about $3.88 for a 1GB bundle
good for 28 days (there's a cheaper 1GB bundle good for 1 day, however, and
some other deals available). There are also a few articles floating around on
the _increasing_ cost of data in India, suggesting that companies started with
cheaper data while establishing themselves in the marketplace, and over time
have been more obliged to turn a profit instead of burning investor money on
subsidized plans. Cambodia does look pretty cheap, though, I agree.

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erdevs
A simple way to look at micropayments for content such as on websites:

If micropayments are used in _addition_ to ads-- perhaps for premium content
or premium sidebar sister content -- then micropayments are acretive to
publishers and the only problem is convenience of payment.

If microtrans are to replace ads (or be offered as a choice to users instead
of watching ads), then In order to embrace micropayments, publishers would
need to see themselves making nearly as much from micropayments as from ads.

Say a typical publisher gets a $10 eCPM aggregate across all the ads they show
on a page. That is 1c per pageview. So, would some users pay 1c per article?
Say users read 100 articles a day across many sites: would they be fine paying
$1/day to access all this content?

The actual range might be anywhere from a fraction of a penny to several cents
per article/page, but we're in the ballpark.

To me, this sort of system could work. As a user, I'd go for it. But payment
needs to be automatic and frictionless (after I authorize a site to charge me
for views).

Those best positioned to enable such a microtransaction payments are browser
makers. Next up are as blockers. Maybe Facebook as they aggregate so much
content now, though this conflicts with their model. Google AdWords+Double-
click could also introduce a user-facing option to disable ads in favor of
micropayments which users could purchase in-bulk and then spend through over
time by viewing pages, but this too would conflict with Google Ads' model and
network effects in many ways. A third-party new entrant could also do this.
Perhaps you'd subscribe or fill a wallet with a service which content
publishers integrate and get authorized to deduct fractional-pennies per view
from.

This sort of model would be a welcome change, from my POV. And the economics
seem workable from a publisher's POV as well.

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woodandsteel
I would really love to see micropayments succeed. It seems to me it is the
only alternative to ads, which can include malware, and websites making money
through tracking.

Unfortunately, the fact the idea has been around so long but never caught on
beyond a few areas makes me worry is simply is unworkable.

That said, here is an idea. I spend a lot of time on HN clicking on links. I
would hate to have to spend time clicking a "send micropayment" icon every
time I did that. But what if I had an arrangement with HN that every time I
clicked on one of its links, HN would send a payment from me to the page I
linked on?

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kirykl
YouTube Red seems to be a form of micropayments that works well. I signed up
for the service as part of Google's July 4th promotion and its made YouTube so
much better as a product. I assume the monthly fee is somehow distributed to
content creators as a micropayment, as replacement for viewing an ad.

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maxerickson
Your total spending is fixed. That's a subscription.

The artists also aren't looking at each playback as a transaction.

~~~
kirykl
Youtube pays red share to creators by total minutes watched by YouTube Red
users, each minute of playback is a transaction

