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Micropayments, Macropayments, Subscriptions, etc.

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Max Leibman
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Post by Max Leibman »

In case others on this board don't habitually check 50 rarely-updated favorite sites every morning...

THERE'S A NEW <A HREF="http://www.thecomicreader.com/html/icst ... html"><I>I CAN'T STOP THINKING!</I></A> AVAILABLE!

Wherein McCloud gives an excellent bit of analysis of the morals of Napster users, dishes out many ideas of how micropayments could work with regards to what content is given and what is charged for, and incoroporates himself into still more new pictures and symbols as he makes his points.

And, I'll take his invite from the strip, and offer my own thought on what types of content could be charged for:

ANNOTATED VERSIONS

For especially surreal, dense, reference-heavy or symbollic works, micropayments could be used to access heavily annotated versions (with hyperlinks to related source material, when available, perhaps), while the comic itself could be freely accessible to anyone.

Depending on the work, this may be of limited appeal to the general public, so it might just be a way of charging nerds to recoop one's bandwidth costs. But it's a thought.

-Max Leibman
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Post by rcar »

I just finished reading Scott's I can't stop thinking. He's right on the money (so to speak) Especially about the quality of the comics if we were to be paid for our efforts. If I were to make money on my site, I would hire some help. Then I could spend more time writing and drawing rather than programing. I would then be able to update more often and regular. The consumer only wins in that situation, they get a better site to read.

I like the idea of suscription base. Maybe one month, six months or year type of deal. Obviously the consumer would ave to see something before they buy, but that should be no problem. Access to some archives or a sample page. The key is keeping the price low so they shrug their shoulders and say, "why not, it's only a quarter".
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Post by Greg Stephens »

Scott Kurtz's thoughts on this here: http://www.pvponline.com/shared/nsystem/comments/18882_50_page_1.php (Complete with comments.)

Some other opinions over at the PvP forums here: http://pvp.stomped.com/forums/showthread.php?threadid=4586
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Post by NatGertler »

I gotta call Scott on this one. This essay (or second half of an essay, or somesuch) takes every self-serving justification that pirates care to offer and treat it as if it were the gospel truth.
<UL><LI><I>"It isn't about stealing"</I> By the explanation given here, <I>stealing</I> is rarely about stealing. It's merely the desire to have something without paying the price for it. What do you expect, people chuckling maniacally about being part of the forces for evil? (Although there are pirates who come dangerously close to that description.)
<LI><I>That it's because the price is "too high."</I> What does that really mean? Is it that there is some objective "right price" that would make it okay? Of course not. It means that someone out there can imagine a lower price, which will be true so long as the price is anything higher than <I>free</I>. The same folks that kvetch about paying $15 for a CD that only cost a buck to press would likely kvetch about paying Scott $3/year for material that only costs 25 cents to transmit. It's a convenient excuse to justify theft. It's not grounded in some objective valuation. (If you pay fifteen bucks for a CD that you'll listen to 20 times, are you really getting such a bad deal? Most people earn the purchase price in an hour, and will get for it 15 or so hours of musical entertainment. Is that such a high price to ask?)
<LI>Talking about how much Scott would make off of PVP if every reader paid him a quarter misses a central precept of economics: raise the price, and you lower the demand. Raise the price from <I>free</I>, and you're apt to lower demand significantly. Start charging a quarter, and you aren't going to turn 30,000 readers into $7,500. You are far more likely to turn 30,000 readers into 3,000 readers. (This isn't to say that there's not a commercial viability to the smaller, dedicated audience -- I suspect that if we SportsNight fans had the opportunity to pay $1 per episode to watch the series, it would still be alive today -- but one has to recognize that it will shrink the audience.)</UL>I'm not trying to protect every claim of the content packaging and distribution industry; goodness knows I have some pretty hefty issues with the various pieces of anti-creator, anti-technology legislation that the industry has pushed through. But that doesn't turn the pirates into some sort of ethical force for reasonability.

I'm not convinced that micropayments is the optimal solution (not that there has to be a one-size-fits-all solution.) I suspect that over the next few years, we will see the development of a second tier of Internet access; ISPs will be able to offer their subscribers access to a lot of content (music, specialty news, porn, whatever) for an extra $10/month, with a cut of that money being split (on a usage basis) among the participating sites. Make it more like standard cable TV than like pay-per-view, so that people don't have to make the payment decision every time they view something. (If I had to pay a buck every time I played a CD, I'd play them a lot less!)

--Nat Gertler

(And hey, have all you McCloud fans checked out <A HREF="http://AAUGH.com/carl">One-armed Carl</A> yet? It's random comics fun!)
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Post by NatGertler »

Oh, and a minor nitpick: the name of the American five cent piece is a <B>nickel</B>, not a <B>nickle</b>.
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Post by Scott McCloud »

Hi Nat.

I can see how this essay could be interpreted as a flat endorsement of piracy. It wasn't.

The point was that there are systemic forces that fuel piracy; that those who do the initial "stealing" of music do not profit from it (they're giving it away, remember) and in fact have to devote considerable effort to the enterprise; that a system which radically increases selection, radically decreases the price discrepency and rewards those who actual produce that art and music would reduce the *incentive* for piracy; and that micropayments would be a key to accomplishing that and therefore worth implementing, should they become practical.

I'm aware of the demand problem you mentioned, that's why I phrased that one very carefully, postulating a scenario where those same 30,000 would be paying 25 cents a month, without a specific transition. The idea of Scott Kurtz ONLY switching over in a sea of free content is obviously a non-starter, but if micros did catch on for certain specialized content first and gradually became normalized and familiar to users, I don't think a penny a strip would drive his readers away in droves.

ISP subscriptions would create a monstrous NEW middleman, every bit as toxic as the ones we have now. I'm proposing a possible alternative because I believe we *need* an alternative.
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Post by NatGertler »

Just because online pirates do it generally without immediate financial gain, that doesn't mean their motives are philanthropic, and more than someone who invests in spray paint and time practicing should be viewed as philanthropic when he "tags" a building for all to see.

And aside from finding some way to fix rates, I don't see where that ISP tier deal inherently creates middlemen any more onerous than those that would be needed to process micropayments. I see both instances more as involving yourself with a distributor, rather than a publisher.
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Post by clahey »

One major problem with the idea of ISP deals is that you get a small group that gets to choose what is viewed. This leads to the problem of having very little choice in what you get to see. Things will only get paid for if enough people will care about it for it to be worth the middleman's money.

However, in a micropayment system the middleman doesn't make any choices about what gets seen. The consumer gets to make that decision.

There are other problems with the ISP tier deals. The audience is limited greatly by those accessing the ISP. The consumer must pay a large amount even if they only want a small part of what's available.

Thanks,
Chris

<font size=-1>[ This Message was edited by: clahey on 2001-06-17 07:42 ]</font>
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Post by rcar »

Last night I read through the PvP boards and was ready to react with some strong statements. Then I decided to think about it over night. I am glad I did. I was able to absorb all I read and think about it more clearly. I am starting to doubt the micropayments now. If you compare it to cable TV, I pay $35 for cable , would I then make micropayments for every show I want to watch? People pay $20 and up for internet access, should they also be nickeled and dimed to death to visit sites?

I read somewhere that corporate sites that don?t generate a lot of traffic would pay for say PvP (Scott, don?t you love that everyone uses you as the example) to be on their site to get the traffic. Then the issue of it being exclusively on their site would come up. But that could be worked out by contract and amount of money. Also the point of controlling your site would come up, so there should be a hands off clause in any contract. I don?t know if this has been discussed or even an option anymore, but another way of possible payment.
I guess what it comes down to is, am I putting up a cartoon site to make money or to show people my work. If I want to make money, I should figure out a way before I offer it for free. Or, generate the traffic first so you have a more sellable product.

What I don?t understand is why people are getting angry because we are trying to figure out a way to be paid for our efforts. I don?t think anybody is trying to become the next Bill Gates. Except Scott Kurtz who is trying to buy a Porsche. (Just kidding Scott. I read that on the PvP board.)

Randy
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Post by NatGertler »

Since the cost of supporting an additional site on the pay tier would be minimal at best, I don't see any reason why the company that packages the tier would try to exclude anyone. The more sites that offer tiered material, the more attractive their tier package becomes. They would no more prevent your material from being available on a tier than they would lock out your site from the ISP's Internet access.

The micropayment people could reject your site just as easily as the tier folks could.

Are some of these methods going to prevent people from accessing your site? Of course. Anything you do to charge people money wll turn people away.

Will people be paying for access to a lot of material they won't bother with? Sure! This is the cable TV model. Right now, there are seventy-some channels being sent to my TV. I'm watching none of them. Most of my watching time is spent on channels that I could get for free. Many of the channels I could not see myself ever watching a program on. Half a dozen of the channels are in languages I don't even understand. But I'm paying a reasonable price for access to the things that I do want, so all the other stuff doesn't bother me at all.
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Post by DanSTC »

Hmm...The best way I could see the pennies-and-dimes system working, is if you could easily set up an "online fees" account of some kind. As in, there would be a special service where you deposit cash, and use that set-aside money to spend online. Using a system like this could produce some interesting results, such as sites being able to hand out free samples to goers.
Most likely, the way the service would make money would be from a reasonable monthly fee charged to the site's owner. (Uh-oh...trickle-down.) One way or another, I'm very sure that this idea has already been kicked around quite a bit.

Oh and on another note; Hello everyone. I'm new to these boards, but not to Scott Mccloud's work. Greetings. :smile:
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Post by Scott McCloud »

A new thread on <a href="http://slashdot.org">Slashdot</a> called "Scott McCloud on Comics and the Internet, part 2" has sprung up. Most either seem to think I'm Scott Kurtz or just want to explain why no one would want to pay $2.00 for every Web Page, or Why CDs cost more than a dollar, or some other argument having nothing to do with what I wrote...

*Sigh*
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Post by DanSTC »

Don't feel bad, Scott. Half the people posting on the slashdot forums usually don't have a clue what they're talking about anyway. It's usually a lot of ranting, and I see quite a lot more ad homenim attacks going on rather than actual debate on those forums. It is pretty sad when the message gets ignored due to wholesale ignorance, though. But then, that's the internet for you.

<font size=-1>[ This Message was edited by: DanSTC on 2001-06-17 14:12 ]</font>
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Post by NatGertler »

"Packaging deals are necessitated in traditional media *because* those media can't support use-measuring feedback as well as because a micropayment economy doesn't exist. "

But even in the formats where we're used to paying by the unit or the increment, we are now seeing a push toward the more blanket subscription. Video rental places are offering rent-all-you-want-for-$X/month, with a limitation on how many items you can have out at once. Music companies are setting up access to entire libraries of music for a monthly fee. Phone companies, finding that tracking and billing individual calls are actually a large portion of the costs of their operations, have moved toward simply selling large blocks of access time and will likely soon offer flat-rate, all-you-can-use domestic service.

Asking people to pay for something is never frictionless. The fewer points at which they have to make that payment decision, the less friction you'll have.
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Post by Greg Stephens »

Re: Slashdot, PvP Forum, and other postings-

It's true that many of the opinions expressed display a disheartening MISinterpretation of the issues as well as a knee-jerk "what, me pay?" attitude, but I think we all realize that these people matter- they're the intended audience- and customers- after all.
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Post by NatGertler »

My darling wife, The Lovely Lara, just happen to point out an item to me that is yet another example for the point I just made. AMC Theaters is experimenting in some cities with a new deal: for a fixed rate (under $20/month), you can see as many movies as you want, up to one a day. Ebert answers as question about this in his Answer Man column. http://www.suntimes.com/output/answ-man ... ert17.html
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Post by DanSTC »

True, Greg. Presentation of and reaction to the idea is everything, after all.
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Post by rcar »

After reading many, many posts and, for me, arguing on both sides, micropayments seems the most popular solution for both the artists and the consumer. Of course it won't hit the streets running, but in time it will be. People just need to get used to it. But now what? Do we, as a group pursue a micropayment system? Or do we wait until someone figures it out then adopt it?

Randy
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Post by rcar »

I was just over at the comicon forum http://www.comicon.com/cgi-bin/forumdis ... Prune=45to see what they are saying about micropayments. It seems KeenSpot http://www.keenspot.com/ has started a one year subsription to premium comics on their site. So far it is working out for them.
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Post by NatGertler »

"I'm saying that their are situations where, even if subscriptions are offered, micropay-as-you-go still could fill an important market niche."

I won't disagree that it can have a place -- although as a consumer, I would prefer to deal with a subscription tier, both so I'm not thinking about every click and because the micropayment system requires some privacy limitations (I must be identified in connection with the specific site in order to be billed) which are not <i>inherent</i> in the tier plan (the provider need only know that I have paid for the tier, and does not need to connect me to the individual sites that I use... which isn't to say that they <i>won't</i> do so.)

And actually, I think that privacy aspect will be a driving force toward this tier support, with the killer-ap being porn access (which has been a killer-ap for so many things in the past).
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Post by NatGertler »

(Oh, and substantially more info on the AMC monthly movie pass situation can be found <A HREF="http://www.cnn.com/2001/SHOWBIZ/Movies/ ... l">here</A>. Apparently, it's already being done in Europe. And the content providers ain't too happy about it.)
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Post by damonk13 »

The Keenspot Premium plan is an interesting and well-thought-out experiment, since it does not restrict access to any of the comics there if you are not a subscriber -- it is purely an optional service.

keenspot deos not lose any readers with this, since you can choose to pay, or continue getting it all for free.

The perk, of course, is that you do not have to see the ads when viewing the comic (which can be a great download time saver, especially when adex is notorious for lagging down pageloads). Moreover, they plan on offering "perks" and "bonuses" -- a system that sounds similar to soeone getting basic cable, or paying extra for specialty channels...

Personally, I think it is a smart test move -- to see how many would be willing to pay that extra bit, without the fear of actually <i>losing</i> any readers in the process...

I am planning to subscribe myself, not only to support them, but also to get rid of the lagging ads. When one reads 200 comics a day, one cannot afford to wait two minutes to see each comic...

It may not be a perfect solution, but, since it is just an experiment for a good cause, I don't mind being a lab rat...

frank "damonk" cormier
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Post by Scott McCloud »

Here's an idea, once again requiring someone else to do the heavy lifting, but shouldn't be too bad:

Compile a list of key questions for any given micropayment hopeful then get each one to answer and compile the results in a central location.

Example:

What's your start-up fee?

MicrocreditCard: $99
Javien: Free
Q-Pass: $26,000

You get the idea (examples above are NOT real, obviously)

I would suggest including the following:

Set-Up Fee?
Monthly/Yearly Charge?
How low can charges go?
How High?
What Fees assessed?
User steps required to open account?
...to make subsequent purchases?
Publicly held? Privately?
Partners, Parents?
Currency accepted from users? (Dollars? Kopeks? Paypal?)
Frequency of disbursement to Vendors?
Platforms supported? (for user AND vendors)

What am I missing here? Anyone?

I'm strapped for time, but one of our more tenacious and methodical brethren wants to take a crack at this, I think it could be useful far beyond our little community.
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Post by rcar »

Perfect idea Scott. I can't think kof any other questions. But what is important is how the consumer uses it. The easier it is for them to use the better it will be accepted.

Also if we do adopt a system, we should do a little pr work so the public knows why we are doing it, and how it will work. The more they know the more comfortable they will be to use it.

Randy
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