Seth's Blog : Micropayments for content

Micropayments for content

This is a problem that comes up every year or two, but no one has implemented a useful solution yet.

Advertising is a surprisingly bad way for a culture to pay for content, because the kind of content that gets rewarded is often dumbed down for a large audience or is optimized for a small audience of people eager to buy something that makes a profit.

It’s also inefficient, as advertisers can’t know in advance what’s going to work, and creators get a very small share of the ad spend.

An alternative is to pay for what you get, the way we treat carrots, baseballs and clarinets. Instead of buying a baseball, though, you’re buying a chance to watch a video.

Micropayments are a system where you pay a penny or a nickel or a dollar for a piece of content.

It introduces two kinds of friction, though:

There needs to be a tech system that can effectively move tiny amounts of money around.
As a reader/consumer of content, you need to constantly make decisions about what’s “worth it.”

About thirty years ago, I described a simple solution to both problems:

For $25 you can buy a content passport. It’s available for purchase on any website that is part of the content network, and you need one to read the content on their site. The site that sells it to you gets $10 in commission for selling it to you.

It keeps track of every member site you visit (that’s really easy now, with a cookie). And then the coordinator of the system allocates, on a percentage basis, $10 to the sites you visit. It’s all gonna go somewhere, whether you visit one site or a thousand. There’s no friction, because it’s a buffet, just like it is now. Read all you want, no ads, no hassles.

The sites that get visited the most get the most aggregate money from the monthly distributions of royalties.

Each site has an incentive to sell a lot of passports (the commission is significant) and the coordinator of the network is making 25% as well.

It’s really clear who the customer is (the reader) and it’s easy for any site to join the network. Aligned incentives, a simple and resilient solution.

Have fun. (PS this is unrelated to yesterday’s post about federations, just a coincidence.)