Where micropayments have worked, like in smaller markets like Slovakia, it’s because micropayment vendors have managed to get buy-in from all publishers.
Ironically, the payment system used in Slovakia since 2011 is scheduled to end at the end of the year 2016. And it worked quite differently from the usual description of micropayment systems.
The 2011-2016 system worked like this:
User paid a monthly fee, I think it was 3 € or 5 € per month. For this fixed fee, they received access to all “locked” articles in websites of all publishers.
Publisher had an option to “lock” some articles. For paying users, the full content of the article was displayed. For everyone else, only the first few paragraphs were displayed, followed by an information that this content is only available for paying users.
The system remembered which locked articles were displayed to which paying users, and at the end of each month, the money paid by all users was distributed to all publishers in proportion to how often their articles were displayed. (I do not know the exact details of the algorithm, such as whether repeated visits from the same user counted twice.)
The system worked, because (1) if you refused to join the system, you were suddenly locked out of a large fraction of content written in your country, and (2) it had a fixed monthly fee, which was simple to understand, and there was no risk like “what if … and then I will have to pay a lot of money?”. Some websites also offered some additional advantages to paying users, for example discussions below selected articles were only available for paying users, or the non-paying users were allowed to post at most three comments a day.
The main complaint against the system from the publishers side was, if I understand it correctly, that if one of the publishers suddenly started posting a lot of clickbait content, they achieved a larged share of the pie. Like, you could start producing content that no one would actually pay for, but as long as the user was registered in the system, looking at your “locked” page, however stupid, technically counted as “user accessing paid content”. Because of the fixed fee, the user didn’t mind (mostly even didn’t notice) this, but the publishers who posted more serious content considered this unfair.
The new system, post-2016, is expected to be like this:
Each major publisher will sell access only to their own “locked” articles for 3 or 5 € per month. User will have to subscribe to each publisher separately. Notice how this latest development has abolutely nothing to do with micropayments (despite the article quoting Slovakia as a market where “micropayments have worked”).
In particular, he ignores the fact that his Financial Intermediary will be able to build a very precise profile of each of its clients since it knows for what the client will pay and for what s/he won’t. This is very valuable information.
I thought the bigger problem with micropayments was the huge psychological gulf between “free” and “any amount of money”, and having to make that decision on every page (or get hit with an effectively random bill every month).
That’s really not too different from data caps on cell phone plans, which the public has mostly been able to navigate with appropriate UI widgets.
No the real problems are technological and regulatory—there isn’t a solution out there for either able to handle per-click payments for the entire globe.
It seems to me that the main reason people don’t get unlimited plans anymore is that mobile providers aren’t offering them anymore. See the “I’ll let go of my grandfathered unlimited plan over my dead body” people. It’s especially noticable because pay-for-what-you-use plans like Ting are a lot cheaper for most people, but they’re not particularly popular.
Just because people will allow themselves to be dragged kicking and screaming into the world of data caps doesn’t mean that they would pick that if they had other options.
It sounds like, while people are very reluctant to begin paying for information online, they are very tolerant of ongoing payments once they start. For example, Netflix is popular despite free alternatives. The main hurdles (assuming reasonable prices) might be the inconvenience of signup and authentication, and a one-time initial distrust.
Ironically, the payment system used in Slovakia since 2011 is scheduled to end at the end of the year 2016. And it worked quite differently from the usual description of micropayment systems.
The 2011-2016 system worked like this:
User paid a monthly fee, I think it was 3 € or 5 € per month. For this fixed fee, they received access to all “locked” articles in websites of all publishers.
Publisher had an option to “lock” some articles. For paying users, the full content of the article was displayed. For everyone else, only the first few paragraphs were displayed, followed by an information that this content is only available for paying users.
The system remembered which locked articles were displayed to which paying users, and at the end of each month, the money paid by all users was distributed to all publishers in proportion to how often their articles were displayed. (I do not know the exact details of the algorithm, such as whether repeated visits from the same user counted twice.)
The system worked, because (1) if you refused to join the system, you were suddenly locked out of a large fraction of content written in your country, and (2) it had a fixed monthly fee, which was simple to understand, and there was no risk like “what if … and then I will have to pay a lot of money?”. Some websites also offered some additional advantages to paying users, for example discussions below selected articles were only available for paying users, or the non-paying users were allowed to post at most three comments a day.
The main complaint against the system from the publishers side was, if I understand it correctly, that if one of the publishers suddenly started posting a lot of clickbait content, they achieved a larged share of the pie. Like, you could start producing content that no one would actually pay for, but as long as the user was registered in the system, looking at your “locked” page, however stupid, technically counted as “user accessing paid content”. Because of the fixed fee, the user didn’t mind (mostly even didn’t notice) this, but the publishers who posted more serious content considered this unfair.
The new system, post-2016, is expected to be like this:
Each major publisher will sell access only to their own “locked” articles for 3 or 5 € per month. User will have to subscribe to each publisher separately. Notice how this latest development has abolutely nothing to do with micropayments (despite the article quoting Slovakia as a market where “micropayments have worked”).
I don’t think Brin groks privacy.
In particular, he ignores the fact that his Financial Intermediary will be able to build a very precise profile of each of its clients since it knows for what the client will pay and for what s/he won’t. This is very valuable information.
No, Brin thinks privacy is futile.
Yes, I know. This is part of the reason why I think he doesn’t grok it :-)
I thought the bigger problem with micropayments was the huge psychological gulf between “free” and “any amount of money”, and having to make that decision on every page (or get hit with an effectively random bill every month).
That’s really not too different from data caps on cell phone plans, which the public has mostly been able to navigate with appropriate UI widgets.
No the real problems are technological and regulatory—there isn’t a solution out there for either able to handle per-click payments for the entire globe.
It seems to me that the main reason people don’t get unlimited plans anymore is that mobile providers aren’t offering them anymore. See the “I’ll let go of my grandfathered unlimited plan over my dead body” people. It’s especially noticable because pay-for-what-you-use plans like Ting are a lot cheaper for most people, but they’re not particularly popular.
Just because people will allow themselves to be dragged kicking and screaming into the world of data caps doesn’t mean that they would pick that if they had other options.
T-Mobile...
It sounds like, while people are very reluctant to begin paying for information online, they are very tolerant of ongoing payments once they start. For example, Netflix is popular despite free alternatives. The main hurdles (assuming reasonable prices) might be the inconvenience of signup and authentication, and a one-time initial distrust.