Pay without the wall

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.

Advertisement

How to improve The Economist on the iPhone

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.

Phone Data Plans: Why not offer rollover?

In my last post I argued that throttling a users bandwidth after they exceed a monthly usage cap is a reasonable way of providing customers with a service free of data overage changes while still limiting the amount of data consumers can download.

An alternative to throttling, that provides some protection from overage fees, is giving consumers data rollover. It would function identically to rollover minutes and for many provide smoothing required not to incur data overage charges.

Better yet though, add rollover to plans with throttling.  Throttling is protection from overage charges and rollover is protection against throttling.

If I was to create a set of plans with the general customer in mind I would market them based off the unthrottled bandwidth they provide and almost silently include unlimited throttled bandwidth. I would offer a rollover option that does not reset at the beginning of the year but cap the amount of data that can be accrued to 3x the plans data.

Phone Data Plans: Conditional throttling is fair.

Virgin Mobile jumped on the bandwagon. The fine print is clear; it is fair.

http://virginmobileusa.marketwire.com/easyir/ceom.do?easyirid=F4ABAEBA3A27ECD9&pagesec=vm_price

As long as the rules around when you trigger bandwidth throttling are clear and the trigger point is set at a reasonably farout location, 2.5GB is probably good for most, it is a great solution for most consumers. The average consumer gets the security of having month long access to data, with no risk of overage charges. The existence of conditional throttling allows the carrier to provide this “unlimited” access at a more reasonable rate.

For those who turn their phones into a wi-fy hotspots (I do it when I go to central park…) it was great while it lasted but as long as throttling is reset at the start of each month and only triggered when you go over a published cap it is hard cry foul.

One year of TED picks. (4-4-10 to 4-4-11)

Some I like and agree with some I just thought were interesting.

Google’s driverless car
http://blog.ted.com/2011/03/31/googles-driverless-car-sebastian-thrun-on-ted-com/

It’s time to question bio-engineering
http://www.ted.com/talks/lang/eng/paul_root_wolpe_it_s_time_to_question_bio_engineering.html
Lot of crazy awesome things. Ignore the last ethics blurb.

Printing a human kidney
http://www.ted.com/talks/anthony_atala_printing_a_human_kidney.html

Understanding cancer through proteomic
http://blog.ted.com/2011/02/24/understanding-cancer-through-proteomics-danny-hillis-on-ted-com/
Interesting intro to proteomics.

How to use experts
http://www.ted.com/talks/lang/eng/noreena_hertz_how_to_use_experts_and_when_not_to.html
Experts suck.

The linguistic genius of babies
http://www.ted.com/talks/lang/eng/patricia_kuhl_the_linguistic_genius_of_babies.html

Born to Run
http://www.ted.com/talks/lang/eng/christopher_mcdougall_are_we_born_to_run.html

How I built a toaster from scratch
http://www.ted.com/talks/lang/eng/thomas_thwaites_how_i_built_a_toaster_from_scratch.html
Milton Friedman’s pencil again.

Your brain on improve
http://www.ted.com/talks/lang/eng/charles_limb_your_brain_on_improv.html

Collaborative Consumption
http://www.ted.com/talks/lang/eng/rachel_botsman_the_case_for_collaborative_consumption.html
We don’t need the rule of law to engage in economic activity.
As the cost of knowledge drops it is less costly for people to self-organize.
Sharing resources, the power drill example is great.
Loved this she even brings up reputation networks.

Parenting Taboos (http://www.babble.com/)
http://www.ted.com/talks/lang/eng/rufus_griscom_alisa_volkman_let_s_talk_parenting_taboos.html

Why not eat insects
http://www.ted.com/talks/lang/eng/marcel_dicke_why_not_eat_insects.html

Why work does’t happen at work
http://www.ted.com/talks/lang/eng/jason_fried_why_work_doesn_t_happen_at_work.html
The analogy of work/thinking with sleep rings with me. I think the other stuff is a bit over the top.

A theory of beauty
http://www.ted.com/talks/lang/eng/denis_dutton_a_darwinian_theory_of_beauty.html
An argument for a non-subjective definition.

Brain
http://www.ted.com/talks/lang/eng/gero_miesenboeck.html

Games and the Brain
http://www.ted.com/talks/lang/eng/tom_chatfield_7_ways_games_reward_the_brain.html

The Brain in your gut
http://www.ted.com/talks/lang/eng/heribert_watzke_the_brain_in_your_gut.html

I am my connectome (Brain)
http://www.ted.com/talks/lang/eng/sebastian_seung.html

The quantified self
http://www.ted.com/talks/lang/eng/gary_wolf_the_quantified_self.html

How pig parts make the world turn
http://www.ted.com/talks/lang/eng/christien_meindertsma_on_pig_05049.html
The reverse but reminds me of what Milton Freedman use to do with a pencil.

Our Natural Sleep Cycle
http://www.ted.com/talks/lang/eng/jessa_gamble_how_to_sleep.html

Child driven education
http://www.ted.com/talks/lang/eng/sugata_mitra_the_child_driven_education.html

The oldest living things
http://www.ted.com/talks/lang/eng/rachel_sussman_the_world_s_oldest_living_things.html

keep your goals to yourself
http://www.ted.com/talks/lang/eng/derek_sivers_keep_your_goals_to_yourself.html

Monkey economy
http://www.ted.com/talks/lang/eng/laurie_santos.html
She is a dirty hippie and takes the wrong lessons from her research but the research is still interesting.

When ideas have sex
http://www.ted.com/talks/lang/eng/matt_ridley_when_ideas_have_sex.html

Mandelbrot
http://www.ted.com/talks/lang/eng/benoit_mandelbrot_fractals_the_art_of_roughness.html
I just like Mandelbrot…

Legos for grownups
http://www.ted.com/talks/lang/eng/hillel_cooperman_legos_for_grownups.html

Learning disorders
http://www.ted.com/talks/lang/eng/aditi_shankardass_a_second_opinion_on_learning_disorders.html
Diagnose them with the machine that looks at the brain not by behavior.

The pattern behind self-deception
http://www.ted.com/talks/lang/eng/michael_shermer_the_pattern_behind_self_deception.html

How architecture helped music evolve
http://www.ted.com/talks/lang/eng/david_byrne_how_architecture_helped_music_evolve.html

4-chan: Case for anonymity
http://www.ted.com/talks/lang/eng/christopher_m00t_poole_the_case_for_anonymity_online.html

Lawrence Lessig: Re-examining the remix | Video on TED.com
http://www.ted.com/talks/lang/eng/lessig_nyed.html

Lessons from fashion’s free culture
http://www.ted.com/talks/lang/eng/johanna_blakley_lessons_from_fashion_s_free_culture.html

Why I’m a weekday vegetarian
http://www.ted.com/talks/lang/eng/graham_hill_weekday_vegetarian.html

Stanford To Offer Free CS and Robotics Courses

“Stanford University will soon begin offering a series of 10 free, online computer science and electrical engineering courses. Initial courses will provide an introduction to computer science and an introduction to field of robotics, among other topics. The courses, offered under the auspices of Stanford Engineering Everywhere(SEE), are nearly identical to standard courses offered to registered Stanford students and will comprise downloadable video lectures, handouts, assignments, exams, and transcripts. And get this: all the courses’ materials are being released under the Attribution-Noncommercial-Share Alike 3.0 Unported license.”