Pay without the wall

January 4, 2013 Leave a comment

The big problem with paying for content is that there is no good mechanism for doing so.

Paywalls are a horrible.  They are awkward and as a global solution do not scale.  Users are not going to have 100+ accounts so that they can access content on the internet.

Paywalls also attempt to change the payment paradigm from metered to subscription.  (When users view an ad they are making a metered payment of sorts.)  Metered systems are most desirable for a consumer, among other things they provide a better feedback loop, avoid lock-in, and prevent content providers from trying to extract rents from the popularity of their paywall.

Finally paywalls are to the advantage of incumbents.  Small fry content producers looking to make just a little money to pay hosting costs will not be able to do so though a paywall.

 
The solution is micro payments made through a wallet managed by a web browser plugin.

Each time you go to a website that demands payment for it’s content you would be charged a very small fee, something like a penny.  Throughout a month an active user may rack up $20-40, the price of a few site subscriptions.  My intuition is that people would end up paying about the same for content but end up with content more tailored to their tastes, and a few less ads.

This system is complementary to the site subscription and advertisement model.  For some consumers a site subscription or two will be the best choice; for large high quality providers like FT, The Economist, and The New York Times subscriptions may be the best solution.

Advertisements will not go away.  Consumers like “free”.  There is though an appetite for paying for ad free sites.  Perhaps in the future if you make a micropayment you get to view a site without ads, where you can view an article on one page instead of five.

 
Usage example:
I read 10 articles from MR. While reading those articles I visit FT, NYT, The Atlantic, Bryan Caplan, and Cato.

MR charges me .001 for each article I read. I pay this because I have already approved any payments to MR of .001 or less.

FT charges me .02. I am prompted to pay this. I accept the payment request.

NYT attempts to charge me .01. I am prompted but decline to pay. The link is not loaded.

The Atlantic asks me to pay .01. My wallet auto declines. They show me a page with the article split over five pages with ads.

Bryan Caplan asks for no payment. He wants his ideas read.

Cato asks for no payment. The people who pay Cato want Cato’s ideas read.

In this example I am prompted twice and only in situations where I would have encountered a paywall. If I regularly use FT and am fine with paying .02 I could make this an auto approved.

 
Common questions:
I don’t want to turn this into an article about how a browser micro wallet would be implemented but I will answer a few common questions I see asked.

“I don’t want to be prompted to pay each time I go to a site.”
You could configure the wallet to only prompt the first time you visit a site.

“I am uncomfortable having money automatically deducted.”
First the wallet should/would be tied to an account with very little money.

Second a well implemented wallet should by default deny large or repeated requests for money.  This wallets payment criteria should also be highly configurable by the user.

For instance when approving a FT charge a user would have the opportunity to set it to auto and modify the auto deduct thresholds.  The default threshold may be one penny.  If FT regularly charges two pennies, and the user does not want to be prompted each time, they would need to set the auto deduct threshold to two pennies.

“This sounds like a lot of work for me.”
It will get more and more easy over time.  Different wallets will compete for use.  They will try to make the experience easy and seamless.  Innovation will occur. Also it replaces some of the work of dealing with multiple paywalls, ads, and articles split over multiple pages.

Browsers plugins could be real smart.  Hyperlinks could be colored by cost, ect, ect.  Different plugins can be made to provide different but equally valid user experiences.  One user may want colored links and rollovers notifying them of costs while another wants no notification.  I am confident that competition will provide solutions for each type of user.

How does this wallet pay the content provider?
Visa, Mastercard, and Paypal, already have micropayment systems of a sort.  They just need to bring them to the masses though easy integration and lower transaction costs.  There also is Bitcoin and the idea of mintChip.

If transactions costs cannot be lowered enough to make paying for individual bits of content feasible another big player Google has already come up with a solution, AdWords. Every time a consumer views a page with AdWords on it a payment is made to the content provider; the actual cash payment is just cached for a month. If consumers had AdWords wallet, AdWords could simply deduct money from the consumer wallet instead of showing them adds. Nothing would change for the content producer. They would still be paid the same.

I think that there’s money to be made in this area.  17 billion in ad revenue over the first half of 2012 is not chump change.  The companies capturing this revenue have some serious IT.  I believe, if redirected those same IT resources could produce an impressive micropayments system.  As ad revenue becomes larger and larger I see credit card companies as having more and more incentive to try to capture a cut by redirecting content providers away from ads to micropayments.

Categories: Economics, Infovore, Technology

In defense of gift giving, the gift of information.

December 11, 2012 Leave a comment

Every year Joel Waldfogel, and his book scroogenomics or some variant gets rehashed.  I mostly agree, deadweight loss, etc is a problem.  What I find mostly glossed over is the gift information.  Thoughtful gifts, that hit the mark, are not at best break-evens; they are surpluses.

For example buying a person a CD, and exposing them to an artist they do not know about, but will love is very valuable; far more valuable than cost of the CD.  The gift is not only the CD but the service of having someone find you a new artist you will like.  How much would you pay for this service; that is your consumer surplus.  Such surpluses must be weighed against deadweight losses.

This surplus is missing from the discussion.  It is assumed that when giving gifts we only can lose, that good gifts simply break even.  People who know each other well and exchange thoughtful gifts profit from each others comparative advantage arising from situational knowledge.

If a pal and I exchange equally priced gifts and spend the same time picking them out.  We benefit from from each others comparative advantages.  I might pick for my friend a popular economics book while they pick for me the popular book on basketball.  If we know each other, the subject, and to be safe, pick one of the best books in the genre; we will probably have produced a surplus.

In closing, though poorly picked gifts may create deadweight losses, thoughtful ones potentially create huge surpluses.

Categories: Economics

How to improve Twitter

September 10, 2012 Leave a comment

Little Thing

  • Expand auto complete to include people in your lists, not just people you follow.

Big Things

  • In the advanced search add the ability to filter by top (the most retweeted posts)
  • Add the ability to add a search to a list (or follow a search).
  • Allow users to customize the left side bar on the home page
    • Make trends optional.
    • Make who to follow optional.
    • Add the ability to have a list navigation.
    • Add the ability to have a saved search navigation.

Why?

Information Overload.

Some people who share smart things, share more then others care/can read.  Adding the ability to filter people’s post by popularity is an easy way to mitigate overload.

Categories: Infovore

Opaque fragile systems dominate.

June 11, 2012 1 comment

“Out of the crooked timber of humanity no straight thing was ever made.”

All systems compete against each other for users.  I believe opaque fragile systems dominate transparent robust systems.  First I believe individuals choose shrouded systems which more tightly bounding their rationality.  Second I believe even when individuals know a system is fragile they believe they will not be victim to its fragility; the greater fools will be.

Firstly sophisticated consumers like price discrimination while myopic consumers are ignorant they are being discriminated against or unwilling to commit the time needed to exploit the system.  Information asymmetry is a feature of the system not a bug.

See “Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets” http://aida.wss.yale.edu/~shiller/behmacro/2003-11/gabaix-laibson.pdf for more detail.

Second sophisticated individuals, even when they perceive the system to be fragile, often subscribe to the the greater fool theory.  They feel they will win out over the greater fools, but they do not understand how tightly bound their rationality has become due to the layers upon layers of shrouding.  The myopics of course are largely ignorant of the risks.

This is a very pessimistic view that offers no solution to the problem of system fragility.  I think though most solutions to fragility only create larger equally fragile systems.

How to improve The Economist on the iPhone

May 25, 2012 1 comment

This is a review of the current state of the economist’s iPhone app and audio edition access.  I mostly detail what I believe needs improvement.

The Audio Edition (In iTunes)
Some months back the The Economist totally dropped the ball and discontinued delivery of the audio edition though iTunes.  After a few months the service was restored but in an inferior format.

Bring back the ability to receive the entire magazine as one podcast file, instead of one file for each section.  iTunes will only download one section of the newspaper’s podcast automatically.  In addition when manually downloading the rest of the files most people will need to baby sit the downloads.  Downloading more then three at a time will result in timeouts of the other files in the queue.

In the past this functioned automagically.  I would click refresh in iTunes and walk away; when I came back the entire audio edition would be available.

Bring back the ability to customize your subscription download.  Right now since you are forced to manually download the economist it is not a big deal to exclude sections you don’t listen to.  (Yes I’m talking about you Britain…)

In the past, you could check off what sections you wanted included in your download and your custom selection was bundled for you into one file.  This was great.  Please bring this back.

The iPhone App
Reading
I have no complaints about reading on the device.  I might like the ability to create bookmarks but overall more interested in the addition of social features.

Advertisements
As is I have no complaints.  The print edition has them.  Any greater frequency of ads though would though become annoying.  Ads on a device have more weight then in print.

Audio
The audio functionality is crude.  Not being able to play audio at 2x speed or greater makes listening to the entire newspaper costly.  There is a large difference between 3 ½ and 7 hours.

I suggest taking a look at the audible app for the iPhone and copying what they do well.

Social
If I am reading digitized text should I not have functions?  Give me all the abilities offered in the feedly app for the iPhone.  You already provide a subset of these features when reading articles at economist.com.  Don’t forget Tumblr and giving users the ability to tweet highlighted text.

Categories: Infovore, Technology

BBC Podcast Survey and Review

April 27, 2012 Leave a comment

This is a “comprehensive” survey and review of the podcasts offered by the BBC.

I value podcasts that “make me better”.   Podcasts that are not relevant six months from now are excluded.  In general my emphasis is on technology and economics.

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If a podcast is not included in this list I have judged it at first glance to be superfluous.

Overall BBC podcasts look to be of high production value.  The Brits do have a tendency to meander and chatter though.  This IMHO has spoiled podcasts that may have been good.

The BBC looks to be publishing just about anything in podcast format.  It appears that there are many new podcasts just starting.  It also looks like they are publishing podcasts that will be a limited run.  I applaud this.  I think limited run podcasts keep the media tight and to the point.

————————————————————————————————————————————————

One last point before I start my list.  I sampled the sports podcasts.  They are high quality, just not educational.

I also ignore news since I feel that the best news source is The Economist.

————————————————————————————————————————————————

**Ratings system key

More or Less: Behind the Stats (Undercover Economist – Tim Hartford)
9 star
In the style of planet money or Freakonomics podcasts.

In Our Time Archives
Overall very good.

Material World
8 star.
Science news.  One of the better ones I have listened to.  Reasonably information dense.

Arts and Ideas
7 star
Think NPRs fresh air.

Best of Natural History Radio
6 star
Good but in a mainstream format.  This type of thing is better on video.

The Radio 3 Documentary
6 star?
It is new and there is only one episode.  It could become very good or become superfluous.

Documentaries
6 star
Good but very much mainstream media.  Think 60 minutes.
All episodes are archived
There also is a Documentary of the week.

The Art of Monarchy
5 star
Historic but at times meandering and information sparse.

Shakespeare’s Restless World
5 star
Great in places but overall slow.

A History of Mozart in a Dozen Objects
5 star
Ok, much like the above Shakespeare podcast.

Witness Archive 2010
5 star
“History as told by the people who were there.”
Nice but information sparse.

Excess Baggage
4 star
Some are about travel and are great.  More often though they are conversational commentaries on a region.

A Point of View
4 star
An editorial.  Overall very superfluous.
I did though rather like the ones by David Cannadin.  He speaks more to history then to opinion.  I expect tough that listening to Lisa Jardine talk about Email Etiquette would be a large waist of time.

Desert Island Discs Archive: 2005-2011
4 star
A celebrity interview.  Superfluous.
“Castaways choose eight records, a book and a luxury to take with them to the mythical desert island.”
Also for rights reasons they only play a short segment of the song.

Thinking Allowed
3 star
So so, very meandering.  The title is accurate.

60 Second Idea to Improve the World
3 star.
Mostly editorial.  Often superfluous.

Reith Lectures Archive: 1976-2010
1 star
Very information sparse.  Mostly bullshit.
A sad betrayal because they are labeled as lectures.

Categories: Infovore

The New Yorker Fiction Podcast Picks (05-03-2007 to 07-15-2011)

December 23, 2011 Leave a comment
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