Sunday, December 18, 2005

Shirky: Fame vs Fortune: Micropayments and Free Content

Individual bits of content that are even moderately close in quality to what is available free, but wrapped in the mental transaction costs of micropayments, are doomed to be both obscure and unprofitable.

Shirky: Fame vs Fortune: Micropayments and Free Content (wherein a good argument is made for why micropayment systems will fail)

I can think of one way around this: Have the micropayments come after the consumption, and (necessarily therefore) have them be voluntary. A tip jar system. The systems that have tried this before have failed mostly because of transaction costs other than the $0.10-- the effort of signing up to a particular system, the process required to authenticate a payment, etc. If it were actually as easy as clicking a link to give someone a dime, I think it would have its place. I'd play.

It also might help if there was a minor reward for tipping, such as to have your name listed as one of the tippers. That could make it a sort of microadvertising scheme, especially if your name links to your site, but that's not the main hook I'm getting at. What I'm getting at is more the status reward of being a loyal fan. Suppose that a blogger writes a popular daily blog. There's a community that takes place in the comments. As a regular commenter you'd recognize all of the other participants and have some basic relationship with them. At the bottom of each post it says, "Yesterday's 25 Cent Tippers: Bob, Steve, Mary, Joe." Don't you want to be one of those people, if the price is right?

I think that Clay Shirky is right on the overall picture, though. By rights it should be impossible to sell content on the internet. The internet is so huge that there are still plenty of opportunities for people to make money selling things that really ought not to be worth anything, such as 99 cent songs or Incredimail, but these should be treated as aberrations. The real trend is towards free-as-in-beer information.

What worries me about that is that combined with the robotification of physical work, we are burning the candle at both ends. Everyone who knows that physical labor is increasingly being automated thinks that we can somehow move to an information economy, where people will be paid for thinking of stuff. In fact, ideas are even cheaper than physical labor in the information age. We need to start right now on thinking of a completely new structure for our economy.



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