
Contenture Launches. Micropayment-Based Freemium Model - vaksel
http://www.techcrunch.com/2009/05/26/contenture-launches-micropayment-based-freemium-models-for-all-if-people-use-it/
======
patio11
I'm still wondering why any site capable of making the sale of Contenture
would put it on their site. (It makes more sense for sites which can't make
the sale. Pennies from heaven, what is not to like.)

Step #1: Convince _my_ user to pay $6 a month forever to use _my_ website (and
by the way a bunch of other sites which are not relevant to them).

Step #2: Receive _$1, once,_ from Contenture, plus a fraction of $4.80,
assuming I keep them coming back to my site.

I have an alternative freemium model proposal:

#1: Convince users to pay $6 a month for my site.

#2: I receive, hmm, $5.50 a month or so, depending on my credit card
processor.

~~~
gojomo
The power is in numbers -- the warm fuzzies users get when they see that many
of the sites they visit will thank them (with tiny upgrades) for freeing the
sites from total dependency on ads.

So no, it won't be one site making the sale. One site plants the seed of the
idea, then another waters it a little, and another some more, until finally
the user feels a gush of appreciation and/or need for one of the tiny
upgrades. Then every site gets a proportional cut, from that point on.

Even if none of them alone can make the $6/month sale, in toto they can. And
they earn microslices of the subscription fee even for first-time visitors who
already signed on elsewhere.

In fact, unless your site is already charging some sort of subscription fee,
_there's no reason not to sign up_. Just by adding the tracking code, you
start receiving a tiny slice of any Contenture visitors' payments. You don't
have to convert users yourself or run banners or lock content up (as far as I
can tell; I haven't parsed all their fine print).

Sure, there's a risk of gaming and free-riding in this regard -- but that
helps bootstrap the publisher network, and they can tighten things based on
user feedback over time. (If I were running it, I would give all users an
absolute right to reallocate their $6 arbitrarily -- the passive metrics would
only create the default allocation.)

~~~
patio11
1) You and I agree, no publisher who is capable of individually converting a
user will sign up to use this.

2) You and I agree, you can get all the bennies of being a publisher without
actually attempting to convert users. Put on tracking code, collect checks,
yay.

3) You think the game theory equilibrium results in a healthy ecosystem of
lots of publishers cooperating to make an Internet-wide Content Cartel which
will use the awe-inspiring power of warm fuzzies to convert a sizable number
of people into Contexture customers. (Incidentally: you seem to minimize the
difference between the free and freemium experiences -- tiny upgrades and warm
fuzzies. I think this is because you understand that there being significant
differences in the experiences makes sites substantially LESS valuable to you.
Do you understand that this this same dynamic _gives every site an incentive
to defect?_ )

4) I think the game-theory equilibrium is that _nobody makes any attempt to
convert users_ , a few dozen blogs nobody has ever heard of put the tracking
code on their sites, some intense competition happens for cuts of fractions of
$4.80 times a few dozen people, and a few months later the system dies for
lack of interest.

Like I said on the last thread, there needs to be a Killer App site to build
this ecosystem around, like eBay was the Killer App that every other Paypal
merchant got to freeload off of. However, unlike the eBay/Paypal symbiot, in
this case if you have the Killer App you should run screaming from this
business proposition.

My, this would be a fascinating collective action problem for a game theory
class...

But yeah:

All sites have an incentive to defect (not lock up a significant amount of
value behind the paywall, not attempt to convert users in any significant
fashion).

If no one puts value behind the paywall, then this idea is a more complicated
implementation of the oldest failed business model, which is putting out a tip
jar and hoping money falls into it. Money very rarely spontaneously falls into
tip jars.

~~~
gojomo
Once the proto-cartel is bootstrapped by sites looking for 'pennies from
heaven', it's completely up to Contenture's management how the incentives
evolve. I think there's a fair chance the strategy-path can be engineered to
be:

(1) Publishers sign up as free riders.

(2) The signup bonuses and other payoff tweaks from Contenture convince a few
sites at the margin to push paid subscriptions and increase the functionality
gradient between paid and unpaid visitors.

(3) That provides enough variety and experimental information to keep
iteratively optimizing conversion tactics -- where conversions are both
turning unpaid users into subscribers, and turning publishers into better
upsellers.

A site that can manage its own subscriptions can 'defect' -- but just as with
running your own ad sales, there are many, many more sites that just want a
drop-in solution.

However, the 'defection' you talk about -- shirking the shared task of
creating/retaining paid subscriptions -- is subject to monetary incentives
totally under Contenture's control. They design the 'black box' of payouts and
can adjust the signup bonuses, the ratio of payouts for protected pageviews
vs. free pageviews, and more. They can expel anyone blatantly gaming the
system -- unless such gaming also benefits them. Eventually, if you're not
carrying your weight, your check each month is just a token amount to remind
you you could be doing more.

It's a subscription-revenues mirror of AdSense in many ways, and they have
enough levers to adjust there's a chance of finding a self-reinforcing
formula.

------
zain
_Contenture has made it very simple for a site to install and use their
service — it’s just a small snippet of JavaScript that can turn on or off
features based on if a user visiting the site has a Contenture account._

Disabling features with Javascript? I bet it's easy to write a Greasemonkey
script that'll give you the paid features on all these sites.

~~~
wmf
It's in the FAQ: <http://contenture.com/help/#technical>

"Only a very, very small minority of users would ever attempt to do something
like this, and worrying about these users is a waste of your time and your
money. There will always be those people who will do literally anything they
can to get around paying for something."

~~~
Scriptor
They do seem to have an API that's server-side accessible, but otherwise I
wouldn't trust reassurances from the same company that is trying to sell me
the product. At least, not without some valid data.

------
bkudria
Any new micropayments venture _must_ (to me) justify in detail in the first
sentence how their idea solves the fundamental problems surrounding
micropayments. Otherwise, I'm inclined to think it's just another gimmick.

Micropayments suddenly turn your casual users into customers, even for 2
cents, and the nature of the relationship drastically changes. Keep casual
readers is one thing, retaining customers is a much larger problem. I have yet
to see a micropayments scheme that addresses this.

~~~
ivankirigin
They do aggregation.

------
madair
Companies are still naming themselves in faux-latin?

This is not a troll. It's a criticism.

------
gojomo
Love this concept -- been discussing variants of it for years now, great to
see it finally being done.

But, it needs a catchier name. This needs to be something subscribers are
proud of paying for -- something they can easily blog and talk about.
'Contenture' is a tricky -- and tricky-sounding -- word.

And it could benefit from more readable and understandable entry pages -- plus
different ones for publishers and subscribers. (I'm seeing tiny faint grey
text, and neither 'Learn More' nor 'Register Now' really answers the questions
I need to take the next step.)

And it would really help to have one or more named participating publishers at
launch.

