MICROPAYMENTS

- a compilation of posts & letters on the subject from Natalie Solent's blog.

(Joanne Jacobs) (Anita Jensen) (Alan Caroll) (Jonathan Gewirtz) (Myria) (Geoffrey Barto) (Jeff Jarvis) (Eve Kayden)

This was my first post on the subject:

Some revolutions run out of steam. Before I go away to do some work (this is a pointed remark), a salutary thought from Joanne Jacobs:

Blogger Revolution

"I finally read the James Bennett piece on weblogs in Anglosphere (English-speaking cyberspace): He thinks we're Martin Luther!

"I think we bloggers are on the cutting edge of something, but I'm not sure what. We've created an international salon to discuss ideas, trade jokes, critique the established media and fight for truth, freedom and justice.

"But it relies on unpaid labor. I'm averaging $30 a week in Amazon donations, despite tripling the number of visitors since September. And with all the new, excellent blogs out there, I keep spending more time reading blogs and less time in activities for which I conceivably might earn money. I can't tell you guys how often I vow to cut back, stop reading, stop blogging, write the damn books. How long can we keep this up?"

Next day Joanne Jacobs e-mailed back with a neat analogy that says it all:

"The solution would be a way for people to pay a very small amount per read, like the cost of turning on the light, instead of asking them to donate the whole electric bill when they feel like it. I hope all those ingenious minds out there will figure out how to make it feasible."

My next post on the subject, quoting extensively from an e-mail from Anita Jensen, said:

Payment without Tears. Anita Jensen has clearly been thinking along the same lines as me and Joanne Jacobs, but has taken it somewhat further. She writes,

"I have long thought that one part of the answer to content was payment in such a way as to be unobstrusive (who wants to remember what the stupid registration thing requires on each site? ) and almost automatic (e.g. you give permission once a year to Amazon or Paypal or whoever) so that you could surf happily without having either (a) the guilt that you're absorbing someone's labor without recompense or (b) the fear that some horrible Register For This Page popup will disrupt your surfing and ask you to remember hopeless details about what you thought your password to the Times of London was.

"This would be in the familiar format of a subscription but at a rate that makes sense on a daily basis. For instance, if I view a page each day, I have no problem paying a cent a time. Over the course of a year, that would amount to $36.50 or so, about what you would expect to pay for a respectable magazine, especially one that did not assault you with advertisements. Speaking for myself, I spend much much more than $36 a year on magazines and I have absolutely no opposition to doing do electronically if it can be made reasonably commensurate with my habits and reasonably hassle-free"

Of course, we are dealing with two separate issues: the first is subscription versus donation, and the second is the search for means of smooth, continuous, easy payment rather than payment in chunks. I think the term for payment being divisible into small particles is "frangibility". I would like to see all possible binary combinations of voluntaryism and frangibility available. Going on:

"But I would like to know when I have rung up my limit on a period of reading so that I can pay my fair freight. This is not something I am now organized enough to keep track of.

On reading this another problem pops into my fertile brain: under my desired system it is even easier for cops to watch you surf. But seems like that they're determined to do that anyway. Ms Jensen also makes some observations about rates of pay:

"Your comment suggested a miniscule one-tenth of one cent. I suggest a cent per site view because that seems to me to be miniscule enough. The links to other sites from bloggers, alone, weed out hours of unproductive surfing. This would mean that mega-bloggers like Sullivan could count on $220 a day for his labors (assuming he gets his 22,000 views per day average) and it would mean that less-known or start-up bloggers would have some hope of carving out a niche that would compensate them somewhat for their time and energy."

If I might finesse the issue of "compensate" a little... I do not, of course, think that the world owes me or any other blogger a living (Not that Ms Jensen does either, I'm just free-associating onward from her starting point.) If the idea got about that readers should pay writers for their creative agonies, rather than their output, then I'd have to pay you guys, 'cos I love to blog. In a sense, of course, I do pay to blog in the currency of money-making opportunities forgone. Another point for smaller-scale bloggers is that a sum of money exactly tracking the stats curve of how many views you get is more predictable, and hence more useful, than the same amount of money received as surprise donations. (Of course the surprise donations are more fun.) I assume this effect disappears at Sullivan's exalted level, rather in the way that Premium Bond prizes are statistically predictable once you hold enough bonds.

"I would also expect that such a process would reduce the number of casual views. This might mean a start up would elect to go free initially to build an audience, but loss-leaders are a part of all businesses and personal ones need not be different. But if a site then achieved a 2000-person readership per day, that would bring the writer a small payment per day (less whatever the collecting agency charged), not a lot, but then again, blogs are done as much for energy and enthusiasm as for money.

"If such a system could be established (and I expect the software and technology is in place, and only needs putting together) it would have a couple of salutary effects. It would separate the readers from the view-throughs; it would provide a quantitative basis for the major media and bloggers to recognize the phenomenon for what it is because it would help establish the parameters of what it is; and it would probably change in fundamental ways the way that the regular media now use websites.

"It is this last piece of the action about which I am most dubious, but I don't doubt that an effective mini-payment plan for bloggers would encourage major media to contemplate ways to cut themselves in on the deal."

"Anyway, it's a subject that ought to be aired more comprehensively, because it is entirely idiotic to assume that people are going to devote hours of their daily lives to this activity without recompense for the rest of time, and because blogs provide a terrific place on the Web for people like me who can't tolerate the idiots who dominate chat rooms."

I would point out here that there is recompense, in the pleasure one gets from blogging. The reason I would like to see some sort of frangible payment system is that, without it, direct publishing is more skewed than it has to be towards those with significant spare time or money. An awful lot of great student bloggers are going to - horrors! - graduate one day, and get jobs, and that's the last we'll see of them. Housewife bloggers like me are also at risk of this terrible fate. On other hand (I think I'm using up hands too fast, this is at least my fourth) some bloggers might graduate to the mainstream media. I sort of want to do this myself. But.. but.. what I really want to do is BLOG TILL I DROP BABY! Yeee-HAH!

In the first of two letters, Alan Caroll writes about two practical problems:

There has been quite a bit of research on what is termed "micro-payments". These are essentially the same thing as you would like for blogs, where one is charged some tiny amount of money for each web activity (e.g., page view). There are basically two technological hurdles, one of which is really still unsolved.

1) Efficiency. There is some non-zero cost in tracking the micro payments. It must be the case that, as small as the payment is, it is still significantly larger than the transaction cost. Back in the days when I was involved in this issue, this was much more of a concern (when 9600 baud was a fast connection, networks were proprietary, etc.). I suspect that the decrease in the cost of storage, bandwidth and computation renders this issue moot.

2) Identity. How, exactly, does your site know that it's me that's downloading the page? The tracking issues you allude to on this score are quite a big deal to many in this area. Even cookies and IP addresses don't work, especially if one looks out to the not so distant future where mobile computation will be the rule and not the exception (OTOH this may be a solution, since I won't be using different computers at work, home or play but will use the same hardware on different networks). If you remember the flap about the Intel processor ID (which was an attempt to solve exactly this problem), you may see some of the difficulty.

There was some interesting work on "micro-coins" which got around problem (2), although at the time it was rejected because of (1). Sadly, I've lost track of the field in the intervening years. But I find it impossible to believe that there are not people activily working on this because it has applications far beyond just blogs, e.g., online maps, dictionaries, etc. where there are free ad-cluttered sites and micro-cost no-advert sites.

More just in from Alan M. Caroll:

I found the article you cited on micro payments interesting. My reading is that its thesis is that the mental overhead of micropayments is too large (as opposed to the implementation overhead, which I mentioned in my previous missive). I find that compelling as I have a habit of overspending on gifts if the gift is a "slam-dunk".

What I've always wanted for other payments is e-bills. Wouldn't it be wonderful if someone could send you an e-mail message that was a bill? Your reply would be an authorization for the sender to extract the specified amount of money from your account. In effect, you're sent a check with the amount and payee written in which you sign and return. If bundling were an issue, BlogSpot could send out the bills and redistribute the cash (minus a house percentage).

With this, supporting blogs would reasonably easy. Your regular readers would sign up (once! only once!) with their e-mail address. Every 6 months or a year (probably on a rotating basis) you'd e-bill them for $5, $10, $20, $50 dollars. They'd click what payment they felt appropriate and fire back. If they thought your blog sucked, they'd just delete the e-bill. And it would be a small step to allowing one to put cash into an e-mail message. People could use that to ... properly prioritize your reading of messages.

I laughed out loud at the sly way that was phrased. Now, how much would a flood of largesse change what I read and wrote about? Anyone wishing to experiment, go right ahead. Even on a purely selfish level, of course, immediate greed must be balanced against credibility as a long-term asset.

There are some issues, but none seem harder than micro-payments (identity and signing are the tricky bits - you'd probably want a USB device with an smart card whose presence is required to generate the signing data). But I know enough to sketch out the implementation of such a system. The problem is that setting it up would require the assistance of a large financial firm to do the clearing, because what I would really send to you is an electronic document which you would in turn present to the bank to authorize a transfer from my account to yours.

One more thought in response to Alan's idea of e-bills: for one brought up as I was, it would take a lot of nerve to send out a bill for a blog, unless the bill-ee had already clearly given you permission to do so. This whole payment thing is as much about shifting norms of etiquette as about technical capabilities.

Jonathan Gewirtz writes citing an extremely relevant article:

The likely reason why "payments without tears" along the lines you discuss haven't been implemented is that no one has figured out how to make them work. For some thoughts on why this is the case, see: article by Clay Shirky called "The Case Against Micropayments"

The problems are significant. If they weren't, one might expect that at least one of the big-time newspaper websites would have established a successful micropayment scheme by now, but obviously this has not happened.

Do click the Clay Shirky article, because, as well as having embedded within in it earlier articles in favour of micropayments, it includes interesting thoughts like:

"Embedding the micropayment into the link would seem to take the intrusiveness of the micropayment to an absolute minimum, but in fact it creates a double-standard. A transaction can't be worth so much as to require a decision but worth so little that that decision is automatic."

Shirky's article also talks in a sidebar about how utilities bills have often gone from being metered to flat fee because people like it that way. But I have to respond that grocery bills have not gone in the same direction - no one has any desire to simply pay Tesco's to fill a shopping trolley.

UPDATE: This debate isn't standing still! Mr Gewirtz sent the following clarification:

My Jan. 10 note about micropayments was flawed. I suggested that newspapers haven't successfully adopted micropayment schemes because of problems inherent in those schemes.

I still think that there are problems with micropayment schemes. However, I think it's likely that something else is behind the fact that no (AFAIK) major newspaper has successully adopted a fee- or subscription-based model on the web. The reason, I suspect, is simple: it is difficult to sell something while close substitutes are being given away, as they are in the case of news. Surely this point is at least as valid for blogs. It will be difficult to charge for blog viewing as long as many excellent blogs are distributed free as labors of love.

I should have made this point better the first time. I confounded the issues of payment-for-service and micropayments in my newspaper example.

Myria wrote:

The idea of micropayments, as you no doubt know and/or are have been endlessly informed, has been kicking around the net for... Well, for a very long time. While technically feasible, it's what many believe Microsoft's .net and passport (with their non-MS competitors) are really about in the end, the non-technical details have yet to be worked out in a way that much of anyone would be happy with. It's not that it can't be done, it's just that it is extraordinarily difficult to do in a way that people - even those people who would be happily willing to pay in order to view the content in question - won't balk at for any number of quite understandable reasons.

Historically, outside of porn, subscription and pay-for-view attempts just haven't worked very well and most of the sites that have tried them have gone belly-up due to lack of interest. For better or ill, most people seem to view their ISP fees as their "subscription" to most of what they can find on the 'net and when faced with a pay model will simply go somewhere else either on or off the 'net.

But there's another issue, you may think it silly - perhaps it is - but please give it a little thought. It has been my experience that trying to turn one's avocation into a vocation is most often a bad idea. Even if one wishes to graduate to the mainstream media, as you say you do, Blogging is still a somewhat different animal and something you do purely for fun, which you also readily admit. When something becomes a business, even if a part time and not overly high-paying one, it changes its character markedly.

When something goes from being a hobby to a job, much of the fun of the hobby gets sucked right out of it.

Let's say you start charging for each page-view. Granted, you have every right and perhaps every reason to do this, you no doubt put a lot of time and energy into your Blog. But it would change a lot of things, would it not?

Blogspot would be foolish to remain a free service if multiple Bloggers hosted there were making money off of it. If you have to pay for server space and/or bandwidth you have to make a certain amount or it isn't worth it. I don't really know anything about tax laws in the UK, but here if you were making anything over a few hundred US dollars a year the feds would certainly want a cut of that money - and what a PITA that would be (not to mention business license fees and other such fun). What about the people who's material you quote? Much of it would fall under "fair use", I'd imagine, but some of it wouldn't or someone would try and challenge you on it. Linking also has been and might be challenged if money was involved. Moreover, when readers become customers that changes the equation, and their expectations, markedly.

Perhaps it's inevitable that things will go to a pay-per-page-view model, but I believe that when and if it does it'll change the nature of Blogging markedly. Perhaps for the better, perhaps not, but it won't be just a hobby one does for fun anymore and that will change how people approach it, view it, and what kinds of people engage in it, read it, and what their expectations are.

It kind of reminds me of the problem faced by many Linux fans. They see themselves as an (or, more generally, *the*) alternative to MS, their chosen demon that they wish to slay. But to beat MS they have accept some of the same things they see as evil about MS - MS does not do the things they do for no reason nor have some of the problems they do simply because they're stupid. But many of the Linux crowd are unwilling to face some of these facts-of-life, so they remain on the periphery and will continue to do so until they do face them.

Similarly, many Bloggers see themselves as an alternative to more traditional media, a kind of new media - and god knows there's plenty of room for that. But as Bloggers (or some Bloggers, others will not change or will fade away) take on some more of the aspects of traditional media, they will inevitably have to become more like it as they face some of the same pressures.

Both Linux and Blogging will change and evolve, of course, that also is pretty much inevitable. When I first got on the 'net commercialization was nonexistant. When commercialization started to come along there was much rending of garments and gnashing of teeth. Many of the dire predictions from since then have come true, many have not. Beyond any reasonable debate, however, is that the nature of the 'net has changed markedly since then and will continue to change in ways both good and bad.

In any event, please consider what kinds of things happen when you turn an avocation into a vocation - part-time or otherwise. Perhaps to you this would be a good thing, I don't know, but it's important to consider what lies down the path a bit. To me turning something I greatly enjoy into a part-time job just sometimes isn't worth it. It all depends on how you weigh the cost/benefit ratio against your own personal views, desires, and expectations, I suppose.

Geoffrey Barto of turkeyblog wrote:

Only one thought on micropayments: if there were a system for collecting money every time a web-page flipped, how long would it take governments to find a way to levy their surcharge? Just a thought.

Jeff Jarvis' WarLog: World War III, had these two posts. First:

Put your money where... : So Blogger has had a bad day and the world around, pundits are now grumpy, suffering verbal constipation. What can we do about it? We love Blogger. Blogger, however, rests on the back on one man, Ev. I paid $12 a year -- an incredible bargain -- to get rid of the ad. What would I pay to know that Blogger is going to be around (saving me the hell of installing CGIs and losing a weekend or a week)? I start the bidding at $100/year. You vote in the poll at the right....

....and then this one:

The price of happiness : Via Metafilter, the Guardian's Neil McIntosh has a scoop on the future of blogger: a premium service. Obviously, since I'm pushing that below, I'll pay up (and, apparently, get a bargain; I'd charge more; this is the service I use more than any other online):

Here's a little Onlineblog.com exclusive: it's the beginning of the end of free at Blogger. I've just been interviewing Evan Williams, brains behind Blogger.com, the weblog site which powers this and hundreds of thousands of other blogs. I'd dragged him away from development of Blogger's first premium service: fast-responding servers. Blogger, as Jack's posting below suggests, has been under great strain since October, when the US terrorist attacks prompted a surge in people wanting to create their own weblogs. Now Evan plans to start building up a premium service: in the next few hours, he'll launch a $30-a-year membership scheme, which will offer faster and more reliable service. The free Blogger will remain, but other - quite compelling - premium services will be rolled out quick-fire after that.

Taking the contrary view, there was this sturdy riposte to me, from Eve Kayden's Quare. It was widely quoted, by Brian Linse's and Andrew Hofer among others, and so perhaps represents a popular opinion.

"Quare is and will remain free. There will be no soliciting of tips. This is my hobby. I love it, I learn from it, and I get more from writing it than anyone ever could from reading it. If any of that changes, I'll quit.
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