Charles Arthur has
a good rant on micropayments and notes that they are always something that is "soon to happen" - but his analyses of the practicalities to date are spot on:
- The bombastic claims of Charles Cohen, founder of Beenz, that it would become a universal currency (that's Beenz, not the Zimbabwe dollar) foundered on the fact that people don't like to have their money tied up in incompatible exchange systems.
- We did wonder at one stage whether mobile phone bills might be the way forward: mine, for example, has charges in hundredth of a pence. But then I pointed out that mobile phones aren't used everywhere that the web is, and if I was visiting an American web site, would I really want to give over my UK phone number, and could I be sure that it would be properly used for billing? Would my mobile operator even accept billing from an American website? (The irony of course is that using mobiles to shift real amounts of money about happens extensively in Africa and the developing world, where infrastructure and the cost of travel means that it's hard to get to a real bank branch and draw out real money. But then, when was the last time you visited the bank branch that is notionally your own to withdraw money?)
- Quoting Nick Carr re paying for news etc "If you want the Kings of Leon's "Sex on Fire," you want the Kings of Leon's "Sex on Fire." A wimpy Coldplay number just ain't going to scratch that itch. But while there are certainly differences in quality among news stories on the same subject, sometimes very great differences, they may not matter for people looking for a quick synopsis of the facts, particularly if the alternatives are being given away free. And most news stories also go out of date very, very quickly."
- Malware writers would target it in a heartbeat. Now, imagine such a system is introduced, and that if you come to this page you'd have to pay, say, 0.1p to see the full text, and then 0.1p more to see all the nice pictures that we've got with it. Having to authorise all those payments would drive you mad, so you'd have some sort of "general allow" set to authorise micropayments to sites you like. Next step: malware writers would grab authorities from those sites and lead people to sites that would, say, auto-refresh (grabbing that 0.1p every 5 seconds perhaps) or throw up hundreds of 1x1-pixel images, each of course costing 0.1p again
- And while that was happening, you'd seen rivals in a race to the bottom to get more people to come to their site by charging less. They'd need ever more micro-micropayments. It really would turn into the Zimbabwean dollar, in a strange economic twist where falling prices would demand smaller denominations, which could only be achieved by forcibly devaluing the principal currency - a flipside of real-life inflation.
We broadly agree - it will a while yet before micropayments exist, as transaction costs are still too high once authentication etc that can solve thse sorts of issues are taken into account.
So how to solve? There are two potential solutions today, both based around advertising models:
- Sponsorship - in effect a 3rd party pays upfront, and you then "draw down" the content. Cr*p sites don't get subscription.
- Per View advertising - whether CPM or CPC based, again this sets a notional value on the content based on what a 3rd party thinks it is worth.
So, what of content that can't get Advertising - well, we suspect that some will remain "User Funded" by dedicated users - or at least Publisher Funded (mainly by special interest groups out there ). Some high quality content will probably be able to get a "Freemium" subscription for its higher quality / specialist content.
I think there is another solution using mobile phones as a payment mechanism, as the authentication is far better handled - but it needs to be linked to browsing and there needs to be a client based application that limits egregious downloads - in other words a system that imposes a predictable price on the unit of content. One approach is to have a standard value token for an item - a blog post, a YouTube song etc. A sort of "stamp" that says you know what you are paying for - so reading Charles' page is a "penny black's" worth for example. Some sites may give it away for free, others charge, but they cannot charge more for the piece of content. And it needs to be able to be convertible from and to hard cash.
This would work via the phone as you can pre or post pay for it, and there then needs to be a link to the web browser so the score is totted up in real time - or perhaps it will only ever be usable on phones?
No doubt some sites would try and design content get people to go to as many "stamped" pages as they could, but one could think of ways to warn readers via social ratings - or just caveat emptor, as the sums are not vast.
As for the rest, well its a Darwinian world out there.......
