October 30, 2003
October 11, 2003
Rick E Bruner’s Executive Summary: Micropayments: An Open Letter to Tony Pierce, Clay Shirky and PayPal:
“All of this brings me back to a widely linked article that Clay Shirky wrote a few weeks ago about why micropayments would never work. Micropayments has long been a pet issue of mine, as I believe it is a critical missing link in the whole online publishing world. I meant to challenge Shirky’s article earlier, but Tony and Vin’s posts finally gave me the extra push. So here is a rant that I’ve actually been incubating for years. Specifically with regard to Clay’s essay, I had several objections…”
September 9, 2003
Not exactly a response, but PaidContent is watching response to Shirky’s article:
“Clay Shirky writes another article on micropayments which is bound to create huge ripples in the industry…the last one he wrote practically killed the industry in its infancy.”
Instead of detailed analysis, Rafat points to other people’s analysis.
September 6, 2003
Clay Shirky: Fame vs Fortune: Micropayments and Free Content:
“Free content is thus what biologists call an evolutionarily stable strategy. It is a strategy that works well when no one else is using it — it’s good to be the only person offering free content. It’s also a strategy that continues to work if everyone is using it, because in such an environment, anyone who begins charging for their work will be at a disadvantage. In a world of free content, even the moderate hassle of micropayments greatly damages user preference, and increases their willingness to accept free material as a substitute.
Furthermore, the competitive edge of free content is increasing. In the 90s, as the threat the Web posed to traditional publishers became obvious, it was widely believed that people would still pay for filtering. As the sheer volume of free content increased, the thinking went, finding the good stuff, even if it was free, would be worth paying for because it would be so hard to find.
In fact, the good stuff is becoming easier to find as the size of the system grows, not harder, because collaborative filters like Google and Technorati rely on rich link structure to sort through links. So offering free content is not just an evolutionary stable strategy, it is a strategy that improves with time, because the more free content there is the greater the advantage it has over for-fee content.”
It will be interesting to see if Rafat Ali has a response.
November 17, 2001
September 28, 2001
Forbes’ article The Tragedy Of The Commons by Nobel Laureate Daniel McFadden starts out with the simple but articulate explanation of “the tragedy of the commons” that I’ve long looked for, then moves to a sold analysis of how this situation plays out with online content and services, but cops out in the end by not offering a long-term solution.
For those of you not familiar with the Tragedy of the Commons, I take the liberty of copying McFadden’s explanation:
Immigrants to New England in the 17th century formed villages in which they had privately owned homesteads and gardens, but they also set aside community-owned pastures, called commons, where all of the villagers’ livestock could graze. Settlers had an incentive to avoid overuse of their private lands, so they would remain productive in the future. However, this self-interested stewardship of private lands did not extend to the commons. As a result, the commons were overgrazed and degenerated to the point that they were no longer able to support the villagers’ cattle. This failure of private incentives to provide adequate maintenance of public resources is known to economists as “the tragedy of the commons.”
McFadden goes on to discuss various options for how content and service providers are going to get paid enough to induce them to put quality content online. The arguments against the four alternatives he lays out (ads, paid via ISP, paid via monopoly, paid via PBS style organization) are solid. But just when you expect an “aha moment” he copes out with this:
The solutions that resolve the problem of the digital commons are likely to be ingenious ways to collect money from consumers with little noticeable pain, and these should facilitate the operation of the Internet as a market for goods and services. Just don’t expect it to be free.
So, is this a fifth model — user pays via micropayments — that he has not fully analyzed, or is it a hope that someone will come up with a way of making the first four models work? An insightful analysis of the value of micropayment models is much needed to round this out.
And of course, it goes without saying that my access to his article was made possible by the fine people at IBM who had banners all over the pages I read.
July 17, 2001
This New York Times Article (registration required) is interesting. It presents the case of the publisher of andrewsullian.com, one Andrew Sullivan and the commotion that was caused by him taking sponsorship dollars from a company in an industry he has spoken positively about. It seems that the separation of editorial and advertising church and state (already problematic online) are exaggerated beyond some people’s comfort zone when both are housed in one person.
Maybe part of the problem is the word “sponsor”. Would it be better if it was “patron”? Or does that imply even more control of the content? Anyone interested in being imho*’s first patron, please drop us a note.