Micropayment Feedback

It should come as no surprise that we've received some very negative letters on the idea of micropayments. Many of the topics raised in these letters were covered in our series. Our comment are in gray following each letter.

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On June 18, "Eudimorphidon" wrote:

I have to just toss in a quick unhelpful comment. I realize that Dan Knight's financial woes are certainly something worth fretting about, but this series is making me wonder if they're clouding his judgment, if he thinks this is really a good idea.

It's sort of ironic, really, that this site has been making so much hay over the big-brother aspect of Microsoft's latest software licensing schemes. Did you stop and think about how much worse "micropayments" would be? Every click of a hyperlink, could potentially be money yanked from your pocket, without your express permission... I can just see the horror stories cropping of of people who'd let their child use their computer and ended up with a thousand dollar billing to their accounts, because there was no "stop and think about it" involved.

Further, imagine the databasing of information that would be required, in order to make it work... every single bit of information about you and your browser would have to be stored for later recall, so at the very least you wouldn't get charged multiple times for leaving your browser open on a page that runs a META refresh every couple minutes to get new banner content. And what about having to pay twice for the same page if you switch to a different computer? Time-limit expirations? All stored, and all subject to abuse, when someone decides to sift through it all and determine the best way to spam you, based on your "spending habits."

Sigh. This reminds me of that same old idea that ISPs have been kicking around for years, where they think it would be an absolutely wonderful idea if they could only figure out how to charge their customers per data transaction. (Oh, let's see, 2 cents an email, 10 cents for opening a video feed...) Well, that hadn't caught on yet, and for God's sake I hope it never will. I'll take up ham radio and live on a deserted island, using RTTY for my data transactions, before I put up with someone sniffing my TCP/IP traffic and deciding what they think it's worth.

Mentioning this in the same breath as Napster-type issues is trying ever-so-hard to cloak a really stupid idea so it looks respectable. I believe artists should be paid for their work, and yes, it would be really keen if content producers would license things such that individual pieces could be selectively nabbed for some reasonable sum. But such a thing, to be reasonable, would have to involve a classic "checkout line, now it's mine" sort of arrangement, not some completely unaccountable magic-click. (Further, how are you going to enforce that magic click, to make sure someone isn't going to turn around and share that "micropaidfor" file? Digital watermarks? CPRM hard drives? Jackbooted thugs? It solves absolutely nothing unless positively draconian and intrusive measures go along with it.) But as for web pages... if you want to sell subscriptions, go for it, by all means. Then there's an accountable commitment to pay X dollars for X access to the site, not some fuzzy "penny here, penny there, where does the money all go?" affair.

Bleah. Good luck with the rest of your series. I'm sure if you repeat the bad idea long enough you'll get someone to agree with it.

Eudimorphidon, thanks for sharing your thoughts.

I do a lot of my writing as "thinking aloud" to see how an idea works out. I've been thinking about site finances for several weeks, and micropayments looked like a promising solution to the problems Low End Mac and many other sites face.

But let's address the issues you raised:

No micropayment scheme ever proposed would automatically yank money from your ewallet. You would have total control of your ewallet - you could set it to automatically log in with your ID and password, automatically paying fees wherever you went, but I doubt anyone would do that. Any micropayment system would have to include authorization to access your ewallet on a site-by-site basis, whether just this one, for the next day, or until further notice. As always, you should protect your ID and password so others can't access your account.

I don't know how you would handle the time-sensitive aspect of micropayments. Simply hitting the back button in your browser shouldn't generate a charge. But whether you have a grace period of 15 minutes, a few hours, or a day - well, it's definitely an issue that must be addressed. As for visiting a page from a different computer, as long as you're using the same ewallet and working within the grace period, there shouldn't be an additional charge.

Micropayments are the only reasonable solution to Napster-type issues, unless all users are willing to pay a single flat rate for monthly access. I think a lot of users would gladly pay 15¢ a track for music as they download it but never agree to a fixed monthly fee for Napster. Without micropayments, Napster would be unable to profitably handle 15¢ transactions.

You believe artists should be paid for their work. I believe writers should be paid for their work. You seem willing to pay for music, but why not the written word? Micropay would let you pay a penny a page as you surf or deposit a few cents in a tip jar; there's no way to do that without an infrastructure that supports payments as low as a penny.

As for subscriptions, that may be part of the model. We're examining all sorts of possibilities, but we don't want to settle on any method that eliminates free access to our site. That means a system to server ads to some visitors and ad-free content to subscribers and/or micropay users. We don't know just where things will end up, but we're thinking through the options.

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On June 19, Bob Ketcham wrote:

A few quick messages before the in-depth ramblings:

1. I really enjoy Low End Mac. It has great value to me and has saved me both time and money.
2. I am willing to return some of that savings to you.
3. Micropayments in a pay per page view form would likely drive me away.
4. The Shareware or Lite Edition model used by many successful software vendors is much more attractive to me and should work well for a Web Site.

My Shareware History

I purchased an IBM PC in December 1981. It was my first computer purchase. My first encounter with Shareware was a product called PC-Talk, a telecommunications package written in PC-BASIC by the late Andrew Flugelman, the first editor of PC World Magazine. Andrew is generally credited with inventing Shareware, although Jim Button, the author of database program PC-File also lays claim to simultaneous invention.

I look back on PC-Talk fondly. It opened many new worlds for me, programming (source code was provided), telecommunications and shareware.

I later went on to run a PC based bulletin board service. The rigors of this hobby-based task are somewhat like the rigors of the hobbyist webmaster. It was fun. It ate lots of time and some money. I operated it under the shareware philosophy. The money sent in helped pay for the second phone line and the hardware - for example, a five megabyte hard disk from PC Source (a.k.a. Michael Dell's dorm room) $1,200.

I would have never given up my day job to run a BBS.

Shareware is not Panhandling

Value has been delivered first. Payment is voluntary. Panhandling delivers no value. The only similarity may be seen in the banner screens and popup reminders found in unregistered "nagware."

Shareware Can Generate Surprising Amounts of Revenue

I was surprised at the number of people willing to help fund my little BBS effort. Considering it was a single line 2400 baud dial up with roughly 30 users a day, the $680 donated in 1985 wasn't too bad. Given the thousands of hits you can get, you shouldn't be surprised by the over $2,000 in donations you received when your plea for help went out.

Shareware and Quality

In spite of Apple's relative market position vs. Microsoft, there are plenty of people willing to pay for quality. For shareware, the inverse also seems true. I don't think you can sustain a full time job on shareware donations unless the quality is there. Nothing will kill shareware donations quicker than a perceived lack of quality or commitment. Shareware forces continuing improvement, effort and high quality.

I wish that Office ('97 or '98) could have the quality of a good shareware program.

Lite Editions and Full Feature Sets

The most successful Shareware business models seem to provide a very robust Lite Edition free. Payment provides access to an even richer set of features. Examples: BBEdit, Stuffit, SoundJam, and TechTool. Could this approach be applied to a Web site with limited access unless the user has registered and have an appropriate cookie? I seem to remember I gave unlimited time to BBS users who made a donation. Everything old is new again.

My Problem with Micropayments

I am a Low End Mac User. I am frugal. I will drive out of my way to find a fee free ATM. I gladly pay my eBay computer purchases with PayPal directly from my bank account to avoid the credit card fees that sellers will incur if I pay with a credit card. I understand why the money changers were so reviled in the Bible.

I am a frequent guest of Low End Mac. Next to My Yahoo!, it is the most frequently visited site in my bookmarks. I read it like a magazine in the bathroom. I stop back often, flip though the pages, coming back until I finish an article. I would change these habits if you implemented a micropayment plan. That might have a negative impact on the number of ad impressions registered.

I use Low End Mac to check my Internet connections. Its simply laid out pages load fast. It always seems to be there. You have a great host. I figure the extra ad impression counts don't hurt you. Of course, on a pay per view basis, I'd knock this habit right off.

I do research on Low End Mac. The machine information and vendor information for low end and used equipment vendors is most useful and has saved me money. Other sites host specification on the many Apple models, but the Road Apple considerations are missing. These honest, opinionated considerations make you uniquely valuable for used computer purchase research. DealMac has saved me more - literally over a thousand bucks. Your credit is a little less, but still substantial. You've kept me from making costly mistakes. I will gladly pay a portion of the savings for that service. Please let me pay it as a donation, as shareware, instead of in micropayments for the above routine stuff.

Micropayments will make me Cranky

Yes, I'll gripe. Maybe quietly. Maybe just to myself. But I will gripe. I'll nitpick the grammar and typo errors. I'll bemoan the lack of pictorial content. I'll grow tired of the anti-PC pieces. Yeah, I hate 'em, too, but after 20 years, Microsoft bashing does grow old. I'll want more meat on a single page. I don't want to gripe. Let me pay for the good I find, not the bad I stumble across.

Look for a PayPal payment in a separate email.

Thanks,
Bob Ketcham

Bob, thanks for proposing a very different model for the Web. Everyone is familiar with the shareware model, although a lot of people don't pay for the wares they use. (I try to pay for it all. If it's worth using, it's usually worth the shareware fee requested.)

In a way, that's what we're looking at. The "lite" version of Low End Mac would be free and have ads. The "full" version of LEM would eliminate the ads for subscribers and/or micropay users.

Thanks for your kind words, especially with regards to Road Apples, which we originally published with some trepidation. The term is entering common usage, although few probably know the original meaning. And thanks for your generous support for Low End Mac.

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On June 21, David Budreck wrote: 

I agree wholeheartedly with the article A Case Against Micropayments.

I love this site. I have it set as my home page at home, but quite simply, if you ever move to any type of micropayment system, I will delete the bookmark and never visit this site again. That is my case against micropayments.

I have followed all of your Support LEM links. If I ever have a hankering to buy anything from Amazon.com, I will do so through your link. I would probably even be willing to pay $60 a year to subscribe - provided I could do so by writing a personal check.

Why? I am starting to fear.

In my opinion, a large part of the reason things are failing is that everybody wants my credit card, which they will automatically charge - for my convenience - month after month ad infinitum until I specifically cancel, which is generally more easily said than done.

I had a subscription once to a card that I canceled. But, lo and behold, even on a canceled credit card I was still charged. According to the bank, the recurring subscription overrode my cancellation as they kept promising payment on my behalf even though I had canceled the card.

A large part of what has made the Internet successful is the anonymity of it. You don't know who I am until/unless I tell you, like I am doing now. I do not want some nifty program that will keep track of my surfing habits - for my convenience - every where I go.

Say whatever you like, make whatever long winded case you like in favor of micropayments, but the bottom line is that I am afraid, and I will refuse.

If I have to pay you through any type of micropayment system every time I come to your site, then you will know who I am and my surfing habits.

That is Windows XP and the end of freedom as we know it.

David Budreck, owner of 26 old Macs

If we ever move to a micropay system, it will be optional. You'll still be able to visit Low End Mac for free, and you'll still see ads on the site.

The privacy issues are a real concern, as we mentioned in Friday's article. I don't think I want anyone knowing more about my surfing habits than I do. The potential for abuse is simply huge. Anyone offering such a service would have to assure privacy if they want anyone to use the system. We don't want Big Brother watching us.

At this point, we're only guessing what a micropay system might be like. I think it's an option we may offer at some point in the future, but at this point that's not even a possibility.

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On Thursday, June 21, Dan R. wrote:

I spend about $350 per year in magazine and newspaper subscriptions, I probably buy at least $150 worth of audio CDs a year, I rent maybe 40 movies a year for approximately $150, and I donate at least $100 per year to my local NPR radio station. Tack on another $250 annually for the premium part of the cable TV (no movie channels, and I don't do the pay-per view stuff). Plus going to movies in theatres... anyway, that's an easy $1000 for content each year, and I'm not complaining about it a bit.

Why would anyone think that the web should be entirely free? I've just wondered when and how the free ride would end.

I'm not crazy about the micropayment method of generating revenue for a website - there's something about a little ticker that just makes me feel like I'm being drained, drip by drip, like a cab ride or a long distance telephone call from a pay phone. I hate copy machines too! However, I have absolutely no problem supporting websites that I frequent, and I think a paid subscription is the best way to do it (or even a "volunteer membership"). Paying for something gives a reader ownership in it, and getting paid gives creators a little more incentive to come up with a good product.

I really don't even care if the subscription/membership provides ad-free access, since it is extremely easy for my brain to tune those out anyway. The only thing that bugs me about the ads is that some of them are very ugly.

Those of you who actually think that the Web will continue to exist in its present "free" state are nuts. Would you do a job for free, even if you really liked it? No, you have to eat and pay bills. Do you think a company or an individual will keep a site running if it doesn't at least break even? Of course not. What we will eventually end up with is a bunch of sponsored webinfomercial sites (like Cnet) which have obvious biases. A site such as Low End Mac would have little value to a company that wants to sell you something new. But if it has value to you, support it now.

Dan, I enjoy your site. There is nothing else quite like it on the web, and I've kept a couple old Macs running quite nicely based in part to information found on your site. There are a few of us out here that understand what a great resource the Internet really is and what it's worth to keep the good stuff around. My check is in the mail.

- another Dan, in Knoxville

Thanks, Dan! I'm not crazy about micropayments, either, but it's a possible model to explore. We're getting a lot of positive feedback on the subscription idea - we'll have to see what we can come up with.

The Micropayment Series

1. A Penny for Your Thoughts, an introduction to micropayments
2. Little Payments, Big Business, the scope of micropayments
3. Paying For Web Content, why you'll like micropayments
4. The Ad-Based Web Is Dying, how micropayments can change the face of the Web
5. Conclusion: Making Micropay Work
6. Reader Feedback

Further Reading

• The Case for Micropayments, Jakob Nielsen, 1998:01:25. "On the Web, users should not worry about a cent per page. If a page is not worth a cent, then you should not download it in the first place."
• The Siren Song of Internet Micropayments, Steve Crocker, IMP Magazine, 1999:04:22.
• Common Markup for Micropayment Per-Fee-Links, W3C, 1999:08:25. "We believe that to pay a small amount for content or services, the user should use the same user interface metaphor as for regular web content: just click on a hypertext link. "
• Micropayments around the corner, Gilbert A. Bouchard, Edmonton Journal, 2000:10:12.
• Giving a Lift to Micropayments, Don Tapscott, Computerworld, 2000:12:18. "Free content subsidized through advertising is unsustainable."
• The Case Against Micropayments, Clay Shirky, O'Reilly P2P, 2000:12:19. "Micropayment systems have not failed because of poor implementation; they have failed because they are a bad idea."
• Web in 2001: Paying Customers, Jakob Neilsen, 2000:12:24. "2001 will be the year that website operators come to their collective senses and start charging customers for service."
• Micropayments: The Salvation of Content on the Web?, Dennis Forbes, 2001:02:24. "...whatever you think about the health of the net it is undeniable that this patient is sickly: Numerous advertisement driven sites have closed shop, and many of the remaining ones have vastly scaled back the content."
• Monetizing Web content, or What's a webmaster to do?, Scott McCarty, Graphic Power, 2001:06:18. "We may actually be on the cusp of the Web by subscription."
• The future of Web advertising & the Mac Web, Michael Munger, On the Flip Side, Mac Observer, 2001:06:22. The case for bigger, glitzier, more intrusive ads.