Well the new Operation Flashpoint game is barely out in Europe and already many of the fan websites created for this title have closed.

www.ofp-base.de has closed and yesterday one of the better sites www.operationflashpoint.com has died through lack of funds :

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Yes, we really have to close down this site, we've spend over $1200,- just these last 2 month's to keep this site up and running, we've spend countless hours into updating and creating new informations for the Community. But i'm afriad all good has come to an end..

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Isn't it true that if you open a fansite you're really not in it for the money? I never dreamed I'd make any cash when I opened One Gamer's Voice over 2 years ago. I don't see why everyone expects a big payoff for a fansite? You're a fan, not an entrepreneur...

If it costs them $1200 to run it, I have to wonder where they thought that would come from in the first place?

--Dave

"If it costs them $1200 to run it, I have to wonder where they thought that would come from in the first place?"

Well, a fansite isn't a business venture, so they may not have known what they were getting themselves into as far as expenses go.

If you get a lot of traffic, your costs can mount up pretty quickly. One EQ site does 20 million pageviews a month and their bandwidth cost alone is nearly $6000, and they do their own hosting. So take 1/10 of that and you get 2 million pageviews and $600 a month, which might be what the Operation Flashpoint fansite was doing.

Yeah, but there's risks with creating any public information source such as this. As soon as you're paying out thousands of dollars a month to run it, it most certainly IS a business venture.

I ran my own site for quite some time. I also worked on another popular site for about six months. I know what it costs and what it takes in sheer time to keep it going. So if you're going to do a fansite for something like Everquest or another popular game, which Operation Flashpoint seems destined to become, then you have to be prepared for the consequences. A tiny bit of research can give you the info you need to decide if you can handle the bandwidth or not.

The bottom line is that you have to find a way to keep bandwidth low while providing enough content to keep people coming back. Eliminate big files, screenshots, superfluous information (why do fansites all have what amounts to box description information all over their site?), etc. Cut down on your HTML (which BTW, Dreamweaver is probably costing you a bit of dough, Mark and Tom) and find ways to make it work. If you still go beyond your means you really have few options. Find someone else to host it and pay that bandwidth charge. Treat it like a business venture because it is one and then go get advertising if possible. Or the one that seems to generate all the sympathy...ask for donations. If none of those work, you have no choice but to close up or charge for visitors.

Here's one for you. With any fansite, most of the content comes in the form of information or downloadable enhancements to the game. That information is usually in the form of game descriptions, strategies, tips, forums, etc. So essentially you're running a FREE strategy guide, community and add-on site. Now, with that in mind, and remembering that many games don't have great manuals to begin with forcing many gamers to go to one of these sites or BUY a strategy guide, doesn't it make sense that they should charge for their content? And if no one is willing to pay for your site at that point, why would you continue footing the bill for free content that people are paying for in stores in book form? (If forums are a bandwidth problem, make a Yahoo Club or something and let them pay for it!)

I was lucky with One Gamer's Voice. Gamestats took me in when Gone Gold moved from its former home. I had two choices then, find other hosting (free) or quit. I had good content (I guess...they liked it) and got the hosting. If I hadn't, the site would have died and it's very possible I wouldn't be here today as someone that's written freelance articles for a print magazine. Gamestats has since become tough to deal with and OGV is now down. So essentially I've gotten to that stage where I either get paid or I do very little on my own outside of contributing here in your forums or where I think it will help me improve/be visible among people I enjoy talking to.

I think the discussions here have generated more excellent ideas about this industry than just about any of the other sites I've ever visited. So I see that as something I want to be a part of and want to contribute to. This is a great place to run ideas by people who have specific insight that matches my own and often exceeds it so it's worth my time. By the same token, the Voodoo Extreme message boards are a waste of my time therefore I never go there.

I think many of the people running these sites are going to find out they have to consider more than just their fandom when setting things up. There's no written law that says fans get a free ride on the net. The web has changed. It's time to accept that and adapt to the changing times.

...and that concludes the post from hell.

--Dave

"A tiny bit of research can give you the info you need to decide if you can handle the bandwidth or not."

Well, I doubt anyone really knows the kind of traffic a site will get until it's up and running. I'm sure there are tons of low-traffic fansites that don't cost much at all to run. The problem with this one seems to be that they became quite popular.

As to charging for access to a site, why not? You'll manage to keep your bandwidth costs quite low then, I'd guess. Diabloii.net is an excellent fansite, but if they charged I wouldn't go there and I suspect most other people wouldn't either.

"There's no written law that says fans get a free ride on the net. The web has changed. It's time to accept that and adapt to the changing times."

It's really only expensive in terms of money if the site becomes popular. Sites that don't do a lot of traffic shouldn't cost too much. Does Geocites still give away free website space?

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Well, I doubt anyone really knows the kind of traffic a site will get until it's up and running. I'm sure there are tons of low-traffic fansites that don't cost much at all to run. The problem with this one seems to be that they became quite popular.

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Diabloii.net is an excellent fansite, but if they charged I wouldn't go there and I suspect most other people wouldn't either.

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You're saying free is the only price you'd pay for that information? Yet thousands would gladly plunk down the dough on an inferior strategy guide at the EB. That's senseless.

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But that's different. You're most likely talking about a one-time charge of $12-$16, versus recurring monthly (or six-monthly, whatever) charges. People will pay for information like that when they need it, but not when they're not directly using it.

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Diabloii.net's a team of cyber-friends (Flux, Elly, etc.) and they probably split costs of bandwidth. They're moving to a new host by the way, as the expansion's popularity has overwhelmed their current host's capacity.

My Shadow's Darkstone Tomb site was so popular a couple summers ago I started looking into dedicated hosting, and the affiliates site coordinator at Gamespy tried to convince me to join up with some other DS fan site folks to do a "super site" but I was real eager to learn HTML and scripting at the time on my own. Now it's not so popular, but it was fun to be in the limelight ever so briefly. :)

Lee Johnson just pointed me to this /. thread which is on a similar topic.

--Dave

I love this site, and I already pay for it, but not directly. I pay a hefty cable modem fee to be able to surf the net. Because I have to make this hefty upfront payment, I look for the free stuff on the internet. And there is lots of it. All free, free, free. Personally, I don't see any reason to pay for an internet site until they either a.) put up content that actually makes me more money than I put in (never happen - no such thing as a free lunch) b.) entertains me to the level of Everquest/Diablo etc.. I'm not going to put up money just to read people's jotted down opinions, no matter how much I might enjoy them. The beautiful thing about the internet is that nobody else is either. But we still want to be heard, and hear other people, so we all gravitate to the free forums.

For example, this website seems to be getting more popular all the time. Lets say Tom and Mark start charging us 5 bucks a month to use it. Seems pretty reasonable. But, I could live without Wumpus's anti-Kohan arguments, Murph's dating advice, and the humor of Aszurom, Bub, and Supertanker among others. I'll go read the gamersclick forum. Sure, nobody there right now, but I bet in a few weeks people might show up. Its like water trickling through a mound of pebbles. The content of the web will trickle through, and it will be free. As long as it is text based. Did I mention that? I think its important.

Sorry, if this a halfbaked argument, but I feel pretty strongly about not paying for game websites.

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I love this site, and I already pay for it, but not directly. I pay a hefty cable modem fee to be able to surf the net. Because I have to make this hefty upfront payment, I look for the free stuff on the internet. And there is lots of it. All free, free, free.

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The beautiful thing about the internet is that nobody else is either. But we still want to be heard, and hear other people, so we all gravitate to the free forums.

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But, I could live without Wumpus's anti-Kohan arguments, Murph's dating advice, and the humor of Aszurom, Bub, and Supertanker among others.

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"This is not cable television and the dynamics of what you're paying for are totally different"

I realize this isn't TV, but I feel like you are treating it like it is. In the beginning there was TV, and it was good. And the TV sprouted advertising, and it kept the TV good for 50 years. And then there was cable TV, and we had to pay for that, but there was extra goodness in cable TV, namely swearing and bare knockers.

What I hear you saying is that this is TV, but it can't sprout advertising. Therefore it will die unless it all goes the way of cable TV and we pay for it. But here is where we differ:

In the beginning was TV and it required a building, and a tower, and a zillion people to provide content. Later there was the internet, and it required a $1200 investment and a book on html and a modem. Its all about access.

The problem with the pay for content sites is that there is no real cost to enter the market. As soon as you start charging for your quality website, someone is going to want a piece of your action. And they are going to under cut you with ease. All they have to do is put together a cheapie website and improve upon your content (there is always someone better than you are). Now, when they run into bandwidth problems, and their site gets too expensive to maintain, what do they do? Start charging for it? Sure, but it will kill them.

The business model for the internet is far from being solved by the "charge them money for it". And in my very naive opinion, I think the technology will determine the model, not immediate business needs.


"How does that feel Mark and Tom?"

Mark and Tom, I haven't meant to hurt your feelings! I value your site very much, as measured in the time I spend visiting this site.

"Mark and Tom, I haven't meant to hurt your feelings!"

No, I think you made it pretty clear who you meant to offend.

"But, I could live without Wumpus's anti-Kohan arguments, Murph's dating advice, and the humor of Aszurom, Bub, and Supertanker among others."

I sir am offended by association!
(No, actually, I'm not offended.)

Now,
If Q23 went subscription based why would the message board be sub based too? Isn't it powered by Discus and therefore not on Mark & Tom's rented servers?

-Andrew

Oh no...this is located on Qt3. Check your URLs. Right click this very frame and go to Properties to see for yourself.

This is costing them just like the main page does and the reviews do, etc., etc.

I'll get back to you later, Rob. :)

--Dave

So each post put here is costing them money?

Hmmm, maybe they should have opened a Delphi board like Sharky used to use. ...Each post costs Tom and Mark money. Ah, I now understand Wumpus' rationale.

-Andrew

Well, it's nice to know that Tom and Mark are paying for my sense of humor.

Now... you ALL pay.

Well, it's nice to know that Tom and Mark are paying for my sense of humor.

Now... you ALL pay.

Ah, it must be "let's make fun of fat girls day" in geekville.

I tried to be funny, and I was not funny.

You tried to be funny, and you are the king of funny. I bow to you, funny man Mr. John T. Someday when I am King of all web media, I will remember you and invite you to come to my cyber kingdom to be my jester. You can even have a funny hat if you like.

I agree with Rob now.

-Andrew

"No, I think you made it pretty clear who you meant to offend."

Um...who?

Um... er... ah... DUH Rob...
You think those people like being grouped together with Wumpus?

DormOnkey

Rob, you're an artist... color me offended.

"No, I think you made it pretty clear who you meant to offend."

Um...who?

"But, I could live without Wumpus's anti-Kohan arguments, Murph's dating advice, and the humor of Aszurom, Bub, and Supertanker among others."

A winner = YOU

I can't decide what he means. Those are either things that he doesn't like and wouldn't miss by leaving the board, or those are things on the board that Rob likes, but he could learn to live without them if he would be required to pay for them in the future.

I'll give him the benefit of the doubt and take it as a compliment, not an insult. If I'm wrong, feel free to pierce my protective shroud of denial.

Yep, it was a misunderstanding. It gets touchy when you mention people by name (even pseudonym). I like all you guys, even Wumpus. I thought the context would make it clear (all the parts where I'm raving about how much I like this board), that what I meant was: I really like the board and the people and the main page content, but I could live without it if required to pay.

ps. Sorry, I know Wumpus has brought on a lot of anger with his Chick-vendetta, and probably some other things he may have said, but I didn't really get into this board until I fought with him over whether Kohan was more than the sum of its parts (it is). I thought it was pretty good natured even when it got nasty. Let me guess, did he piss people off over whether an X Wing was better than a Y Wing (I have no real knowledge on that one)?

Regardless of if its funny or not - can you not post images to the baord? Us guys with dialup connexions have enough trouble as is.

I have to add this:

My very first impression of Qt3 was, "Hey, here are some guys who are doing in 60 seconds what the reviewers in magazines agonize over for pages, and these guys are doing it succinctly with wit, style, and insight." Little did I know that the magazine guys and the Qt3 guys were one and the same.

My enjoyment of the board, shoot club, the articles, the 3am snippet, all came later. It was the 60 second reviews/previews that hooked me.

I really wasn't offended Rob.
No worries.

-Andrew

I was terribly offended.
Worry.

- Aszurom

"I vill break you"
- Ivan Drago

Via Con Quesos - Go with cheese

Do I have to load every thread page and do Alt-E, F, wumpus, enter? Evidently I do.

There is no anti-Chick vendetta. I like Tom, I like his work, I think he's a great writer. I just don't agree with some of his opinions. I also think Tom falls prey to that all-too-common trap of great game _writers_: he's a bit out of touch with his _gaming_ audience and doesn't even realize it (ref, counter-strike, fps genre reviews, mod article on gc.com). That is disapponting, but he's hardly the first or only reviewer to have the problem. I guess it's a bit more disappointing than it would usually be, if only because I've followed Tom's writing for so long. From 1996-2000, I would have picked Tom as the "reviewer whose review I am most likely to agree with".

Here's some Chick trivia for you-- Tom doesn't realize it, but we've actually met before in person. Burbank, California, SlamSite (RIP), 1996, Diablo preview for GameCenter. The whole Gary Coleman ear shtick.

http://www.google.com/search?q=cache:3SNgZLWjBwg:gc1.gamecenter.com/News/Item/0,3,0-412,00.html+diablo+gary+coleman+ear+gamecenter&hl=en

"Mark seems to think that people won't pay for much of anything with regard to the web. Maybe that's true. But then there really can be no complaining or lamenting the closing of sites that simply cost too much to run. If you won't pay to keep it going, who will?"

This is something that I've thought about quite a bit. I'm more or less resigned to the idea that it's advertising or bust. There will always be free sites competing with fee-based sites, so the fee-based sites will lose.

The only other model that might make sense is to have a network of sites that are part of an ISP's exclusive offering. I could see that too, but then ISPs are having trouble making money right now without having to pay out money to a network of sites.

Or maybe micropayments. But I'm dubious about that. When every site you hit asks you for money, you're going to get tired of that quickly and either not give money if it's voluntary or skip the site and go somewhere else.

"That sounds like naivete talking. It's very simple to determine how much money it costs to implement and pay the bandwidth costs for a web site. Expecting it to be low traffic would be silly. You're making it for people to see, so why wouldn't you want people to read it?"

How can you know ahead of time how popular your site will be? Are you suggesting that all fan sites should expect to have $1000 a month bandwidth bills? $2000? It's got nothing to do with building a site with the intent to limit the number of readers.

Trying to predict how popular a site will be before it launches is like trying to guess the Nielsen ratings of a TV show before it premieres or how many copies a game will sell.

"...and if I was running that site and read this I'd figure you wouldn't mind when my bills exceed my means and I shut it down. But you'd probably lament my closing it then too just like this thread we're in now and countless others through the last six months. I'd seriously consider taking down a resource like that out of spite for people who think the way you do about the content."

Thing is, they "priced" it already as free. If they want to raise the price, fine. I'll decline to meet it. Just because I think something has value doesn't mean that I'm willing to pay for it. I'll do without.

"It makes no sense. If it's of value to you now, why is it of no value to you when you have to pay a small fee? You're saying free is the only price you'd pay for that information? Yet thousands would gladly plunk down the dough on an inferior strategy guide at the EB. That's senseless."

I don't buy strategy guides either. If someone gave me one, I'd probably find some value in it, but that doesn't mean I'd be willing to pay for it.

It's not about value, anyway. It's about the seller setting a price and the consumer deciding to buy or pass. I'm just not willing to pay for content on the Internet. If the Internet dries up and blows away, so be it. That's just me. Others may be happy to pay for good content.

"It's certainly your right to move on, but that tells me that you value all the content the same...zero. How does that feel Mark and Tom?"

What? You mean how does it feel knowing that people enjoy the site but aren't willing to pay a fee to read it? That feels like reality. It doesn't bother me. I don't associate a monetary value with anyone's feelings about the site.

"If Q23 went subscription based why would the message board be sub based too? Isn't it powered by Discus and therefore not on Mark & Tom's rented servers?"

Like Dave said, the boards are hosted on our nickel. Discus is just the free software we use.

Our bandwidth costs are low, though. Our pages are pretty light and our traffic's fairly low. We just don't put up many new pages of content, so our pageviews are really driven by the news page, these boards, and whatever features we get up.

So far our most popular article was the interview I did with Bill Roper. It probably did ten times the traffic that any other single article has done. Just shows the power of Blizzard.

"You tried to be funny, and you are the king of funny. I bow to you, funny man Mr. John T.
Someday when I am King of all web media, I will remember you and invite you to come to my
cyber kingdom to be my jester. You can even have a funny hat if you like."

Aszurom: Stop projecting. You posted a picture of a fat girl. I protested, mildly. You then ascribed all sorts of things to me to which I make no claim. Settle down.

"Or maybe micropayments. But I'm dubious about that. When every site you hit asks you for money, you're going to get tired of that quickly and either not give money if it's voluntary or skip the site and go somewhere else. "

I'm convinced the for-profit web content business _cannot_ work without micropayments. Because if you're willing to pay 50 cents for a newspaper, wouldn't you be willing to pay 5 cents to read that interview with Bill Roper?

I envision this something like current cell phone service. You get automatically and transparently billed by your ISP for any premium pay content you access, but the fees will be tiny, even by cell phone standards.

Of course, the problem is that the existing banking infrastructure can't deal with the trillions of tiny transactions.

"Because if you're willing to pay 50 cents for a newspaper, wouldn't you be willing to pay 5 cents to read that interview with Bill Roper?"

Some probably would, but there will still be plenty of sites that do it for free. So then it's a nickel to read it at Qt3 but free somewhere else. It's not the price of micropayments but the hassle of tracking them. It's one thing to give a clerk $0.50 for a newspaper. It's another thing to allow my credit card or bank account to be accessed to transfer the funds.

What if you had to pay for each cable TV show you watch instead of just one monthly payment? It would just be a pain.

I'll bring up the definitive article on ads vs. subscriptions yet again.

Mark Ashner: "The only other model that might make sense is to have a network of sites that are part of an ISP's exclusive offering. I could see that too, but then ISPs are having trouble making money right now without having to pay out money to a network of sites."

I think the network model that failed so misearably for internet advertising might actually work with subscriptions. A network would sign up a wide variety of websites exclusively. The network would offer this laundry list of websites on a subscription basis. The customer could select those websites they wanted to view and pay an annual subscription price based on the number of sites selected.

This model might even help out with advertisers as websites would now have a paid subscriber base versus the variety of other measures currently used (click throughs, page views, etc). The advertisers should be more comfortable using subscribers as a decision point for pricing and placing ads as it more closely resembles the methodology used in pricing magazine and newspaper ads which are both familiar media.

I think we have been very lucky to enjoy as much free content on the internet as we have the last few years. BUT, if we want to continue to receive the benefits of what the internet provides, I believe that we will have to pay for it. Many sites may shutdown because the content is not compelling or unique enough to support a good subscriber base. That's business. I strongly feel that there will be many websites that do make it. Personally I feel that Salon.com premium offers content that is worth the $30 subscription price (and it is NOT the naked pictures that drove my purchase decision). Salon may not make it but I believe that more sites should try the subscription model before going belly up.

That's enough opinions for one post.

-DavidCPA

Okay, if I were going to try to charge for content, here's how I'd do it:

Take Mark's idea of premium sites getting paid by the ISP's who charge, cross that with paying a monthly fee to view a site, and cut out the middle-man. Say, for example, that QuarterToThree, Gamersclick, GoneGold, GameSpy, and perhaps one or two other sites form a network and ask us to pay $10-$15 dollars a month for access to all these sites. If done right, each site (in this example) would make three bucks a month off each person who signed up. I for one would be a lot more willing to pay fifteen bucks a month for access to five sites than pay each of those individual sites three bucks a month. I don't know why, but it just feels different.

Naturally, the problem here is that the sites that I really like might be in separate networks, and no one's gonna want to pay $45 for three sites, so the idea needs tweaking. If you could get all sites on one network (what are the chances of that?) then there might be some way of working it out.

I'm no expert, but I think that's the basic idea behind some of those age verification systems that porn sites use. Someone should see how they do it. They're the only ones making money, anyway.

"A network would sign up a wide variety of websites exclusively. The network would offer this laundry list of websites on a subscription basis. The customer could select those websites they wanted to view and pay an annual subscription price based on the number of sites selected."

I think this idea is interesting. Coupled with the ISP cost it doesn't sound so painful, but the network would have to have a hell of a lot of excellent content to make it desirable to people. Could part of the network be access to an online only game (a really good one - Diablo 3 not Solitare)? That sounds intriguing.

"It's not the price of micropayments but the hassle of tracking them. It's one thing to give a clerk $0.50 for a newspaper. It's another thing to allow my credit card or bank account to be accessed to transfer the funds."

As a public company auditor I've seen high transaction volumes cripple financial packages. Financial packages aren't built for extreme punishment. And the high volume I'm talking about is puny in comparison to what the volume would be like if people started banging through 1/10th of a penny 50 times an hour to surf the net. An Oracle or Peoplesoft financial package would crash like the Hindenberg trying to handle that kind of load.

DavidCPA - honestly, I'm just curious, what do you get for $30 from Salon.com that isn't available on their free page?

IGN isn't dead yet and they went with a subscription-based method. They also landed some big advertisers the moment they started charging for subscription content. Coca-Cola and Toyota have both appeared in ads on their site.

They also offer a broad range of gaming content (lots of platforms) along with the movie, entertainment and "for men" content. So right there is your subscription site that combines many sites into one.

But I'm out of this discussion I guess. It's easy to see from all these responses that free is all that will fly with most of you guys. There's really no point in arguing it. Mark's saying "if the internet dries up and blows away, so be it". How can you argue with someone that says that? If you don't care about the content, you'll never care about finding a solution to the current problem with funding web sites.

Yet here we are on his web site... hmmm...

--Dave

I don't think that's the case, Dave. I just don't think anyone's come up with a satisfactory method of charging to attract enough people to make it worth their while. Besides, Mark's got a good point. It's gonna be really tough to get anyone to pay for anything when there's a free site that offers the same stuff. Now, if you can get a site that has enough exclusive content, and a reasonable method of charging, you might be on to something.

Murph: DavidCPA - honestly, I'm just curious, what do you get for $30 from Salon.com that isn't available on their free page?

Officially this link has all the items that premium subscribers receive:

http://www.salon.com/premium/intro/index.html

Beyond those items (some of which I do not take advantage of), one of the main reasons that I subscribe is that I identify with the slant that Salon takes in its articles (fairly liberal). I unsubscribed from my local paper because the editorial and opinion sections became so conservative that I couldn't justify sending them any more of my money. I'd rather support an outlet with which I idenify and agree.

I also felt that by subscribing I increased the chances of continuing to receive the type of content that I like. In a way that may be more a donation than a logical purchase. Thinking about it, I use similar reasoning for other purchases. For example, when purchasing ice cream, I purchase a brand that is made locally instead of a brand from out of state. I have tried both and they are not decidedly different in terms of quality or taste. I just want to support my local brand.

On the micropayments issue, I suspect the transaction costs would be too high to run through either a credit card or bank account. Murph is also right about the volume of transactions if micropayments were implemented on a large scale. I can imagine the transaction flow would look more like a denial of service attack rather than a steady flow of transactions. It would take some very large companies supporting this type of payment and spending some big money on capacity to ever make micropayments work.

-DavidCPA

Actually, I think Rob said both of those.

"If you don't care about the content, you'll never care about finding a solution to the current problem with funding web sites.

Yet here we are on his web site... hmmm..."

Not being willing to pay for content doesn't mean I don't care about content. I'm not willing to pay to watch reruns of Seinfeld, but that doesn't mean I don't enjoy and value the show. I give the show my time and attention. You seem to only associate dollars and cents with value.

If there was a good micropayment system in place that I was comfortable with, I might be willing to pay for one-time access for a day or week to something like Diabloii.net. That's the level of quality I'd pay for, most likely, and then only if it was for a game I'm keenly interested in, and then only if the access charge was cheap.

I can't think of a general gaming site I'd pay for. I don't really read reviews and previews. I trust something like Usenet as much as I trust any individual site. I like to read gaming news, but there isn't a comprehensive site out there for news. I like Blues, but that's more like a news portal. There really aren't news stories there.

I'd pay for Old Man Murray if they updated more frequently. They would need to scale up a bit and become a more full-service site before I'd pony up.

The bottom line is that as much as I enjoy the gaming scene and the game sites, I can live without them. If you want me to pay $10 a month for several sites, they need to scale up their quality dramatically. Look at what you get when you pay for HBO. Not only premium movies, but exclusive shows like the Sopranos. Invest the kind of money that HBO invests in their programming into a network of sites -- gaming, entertainment, news, etc., and I might subscribe.

Of course I ditched cable a long time ago too. :)

Even cable doesn't charge as much as most sites would. Think about a premium channel like HBO. A cable company might charge you an extra $5/month for it above the cost of regular service(I don't have it, so my number's probably a bit off). Compare the value of HBO to the movies you won't rent that month because you can just tape them when they come on and watch them at liesure. The cost of the subscription is paid off after two or three movies. The rest of the month is a cost savings.

Also, for what my provider calls "extended basic" cable, I get a lot of channels, including lots of really cool cable-only stations. If I subscribe to a web site, all I get is the info being posted to that one site.

I think if a cable model would work, it would have to a) involve "networks" of web sites, all accessible to the paid subscriber. There could even be a list, where subscribers were allowed to pick from 5-15 sites as part of their network, so folks could customize their subscriptions. b) The sites would have to add some value-added resource. An HBO saves rental fees, if movies are your thing. A gaming site will generally contain most of the same stuff as other gaming sites. It comes down to your taste, and what you think of the folks posting the content. It's not likely to ever save you money to susbscribe to a gaming site.

I really do believe advertising will make a comeback on the web. You might not recognize it, but it will be there. It's waiting, right now. Waiting for wider bandwidth connections to become more widespread. Waiting for real evidence that the advertisers are reaching and affecting their target demographics. Waiting for the advertising folks to open up their old textbooks and remember how to advertise with the basically slow, static medium that the web represents at this time. It'll happen, tho. As soon as the hint that there is money to be made advertising on the web takes hold again, it'll happen. It just won't be like last time.

"It's one thing to give a clerk $0.50 for a newspaper. It's another thing to allow my credit card or bank account to be accessed to transfer the funds."

You allow your ISP to charge you for monthly service. You allow your cell phone provider to charge you for monthly service, including premium services and per-minute charges. I fail to see the difference here.

From the 'definitive article' at
http://slate.msn.com/Readme/01-05-10/Readme.asp

"Television is the most obvious case. A few weeks ago a producer from Nightline contacted Slate while researching a possible show on the crisis of content on the Internet. He wanted to know how on earth we could ever be a going business if we gave away our content for free. I asked how many people pay to watch Nightline. Answer: none. People pay for their cable or satellite hookup, and they pay for content on HBO, but Nightline and other broadcast programs thrive without a penny directly from viewers."

Just like people PAY FOR THEIR ISP. And last time I checked, there was a "macropayment" on my bill every month for HBO. HBO ain't free, folks. The trick is getting micropayments of 1-5 cent per article to be billed through your ISP.

This is the way it has to be, unless advertising does make a comeback. But I strongly believe a workable micropayment system would fundamentally change how things work on the 'net. If you got 20,000 hits on that Bill Roper article (and you guys probably got more-- I used to get 20k hits on gb.com articles regularly), that's $200 at a measly 1 cent per view. Pop up a few of those per week, and at least you can make a small profit.

Which is more than can be said for the current situation.

"Some probably would, but there will still be plenty of sites that do it for free. So then it's a nickel to read it at Qt3 but free somewhere else."

Hello, intellectual property laws. I guess I'll just mirror a pay site at gamebasement.com for free, then eh? Perhaps I can even undercut their prices. Unique content stays unique and protected. Would I click on a link to the latest shoot club that costs me 5 cents, transparently and automatically added to my ISP bill? Sure I would. Of course stuff like this forum and smaller articles would be free as usual.

"It's not the price of micropayments but the hassle of tracking them. It's one thing to give a clerk $0.50 for a newspaper. It's another thing to allow my credit card or bank account to be accessed to transfer the funds."

Again, absolutely no different than cell phone calls. If you have a salesperson that makes 50 cell phone calls a day, they're all tracked. And it all shows up on the bill. Not exactly rocket science.

"What if you had to pay for each cable TV show you watch instead of just one monthly payment? It would just be a pain."

It depends on usage patterns. If all I get HBO for is to watch the Sopranos, wouldn't it be cheaper for me to get charged 50 cents per episode? Granted if you are a heavy net/hbo user you'll want to look into package deals where you buy blocks of content in advance.

"On the micropayments issue, I suspect the transaction costs would be too high to run through either a credit card or bank account."

Phone providers manage to track all those tiny phone call charges, and the telcos weren't staffed by geniuses last time I checked. Granted the volume would be considerably higher, but..

"Murph is also right about the volume of transactions if micropayments were implemented on a large scale. I can imagine the transaction flow would look more like a denial of service attack rather than a steady flow of transactions. It would take some very large companies supporting this type of payment and spending some big money on capacity to ever make micropayments work."

That's why we have all these high powered computers, guys. If they can't come up with a workable micropayment system, god help us all. The real problem is not the TECHNOLOGY, but the existing banking mindset. And that will take much longer to change, sadly.

"They would need to scale up a bit and become a more full-service site before I'd pony up."

Kind of a chicken and egg problem there, though.

http://www.thecomicreader.com/html/icst/icst-6/icst-6.html

Ah,
Scott McCloud.
A master at sequential explanation. A very good, very compelling argument that does nothing to explain or even acknowledge the sheer difficulty of mounting and tracking such a system. How does a webmaster truly know how much they should expect each month? What about the annoyance that is a huge part of each credit card transaction.

It's possible. But I can't even begin to imagine how difficult it would be to track fees in cent increments.

Maybe somebody can figure it out.
Because, it would be ideal.

-Andrew

Wumpus, he has a point, but his line about Napster "being about getting 100 times as much music, not saving money" is transparently silly. Economically, they're the *same thing*. One just doesn't sound as selfish.

Andrew, people have figured it out: Advertising. ;0

Seriously, advertising is micropayments in reverse. Looking at the ad is your "payment" to the agency, who pay the website, and the transaction costs per payment are at lot, lot lower. I work for an electronic funds company, and I can't even imagine what kind of overheard the necessary volume of sub-dollar transactions would result in.

"You allow your ISP to charge you for monthly service. You allow your cell phone provider to charge you for monthly service, including premium services and per-minute charges. I fail to see the difference here."

The difference is that I can track a handful of payments that recur every month. I'm comfortable with those. I don't want to get into the position of having to worry about 37 micropayments one month and then 24 the next and than 43 the month after that. I don't want to have to check to make sure I'm not being overbilled or billed for something I didn't want, and yet I wouldn't be comfortable making a lot of small electronic payments without constantly checking.

"Hello, intellectual property laws. I guess I'll just mirror a pay site at gamebasement.com for free, then eh? Perhaps I can even undercut their prices."

I'm not talking about mirroring content, but similar content. I'd rather read Bruce Geryk's review of WWII Online at Gamespot than Joe Schmoe's review at SchmoeGames, but if the Schmoe site is free and Gamespot is fee-based, I'll read the free site. That's what I'm talking about.

"Again, absolutely no different than cell phone calls. If you have a salesperson that makes 50 cell phone calls a day, they're all tracked. And it all shows up on the bill. Not exactly rocket science."

And I'm uneasy about cell phone bills, so I check them all the time, and I don't really want another similar bill that I have to check. And of course a single bill for micropayments implies a single source for billing, and no one's figured out yet how this middleman can make money by being the go-between for a million $0.05 payments. People use Paypal now, but I doubt you can use it give someone a nickel or even a quarter.

"Phone providers manage to track all those tiny phone call charges, and the telcos weren't staffed by geniuses last time I checked. Granted the volume would be considerably higher, but.."

Yeah, but the phone company sets the prices so it's easy to automate it all. It's just connect time from one region to another. That's easy. How would 500,000 websites, each setting their own micropayment prices, work?

Maybe there's a way to make it work, but it just seems like a big headache, and what's the ultimate result? That we get to pay to read websites that we read for free now? Can't you just see the huge consumer resistance there will be to this? That's the whole problem with this line of thinking. It's not being driven by consumer desires but by businesses desperate to turn a profit. Good luck trying to convince people that they want to start paying to read web content.

"People use Paypal now, but I doubt you can use it give someone a nickel or even a quarter."

Not to mention that being the middle man on thousands of micropayments is actually hurting Paypal quite a bit.

As I understand it every credit card transaction costs money.

-Andrew

Yeah, but they have to get something out of the deal.

I guess their premium members pay a little bit more...I think there are several levels of membership, too. I know that you can do freebie stuff, but it costs extra for different levels of membership, so I guess that's where they make their money.

The key for microtransactions is to aggregate them into macrotransactions--you track them at the micro level, and process them at the macro level. That takes care of the technical aspects at least. But, as Mark notes, who the hell wants to peruse a laundry list of microtransactions every month? For that reason I think some sort of content/provider aggregation is necessary.

AOL is believe it or not on the right track here. Yes, they are Satan incarnate, without a doubt--but the idea of having a single place you log into (and on with, and pay to) for your Internet needs is obviously popular. The upside for a wider application of this idea is that pay sites could be aggregated to gether and you'd get unlimited browsing time for your ISP fee (the ISP being part of/the center of the aggregator).

The downside is, of course, exclusivity. Everyone would want to be the only aggregator to offer, say, DiabloII.net, or PlanetQuake--or of course, Quarter to Three! You'd end up having to pay hundreds each month to get all of the ISP/aggregators you needed to get the content you wanted.

So maybe it's not a good idea after all. dunno.

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As I understand it every credit card transaction costs money.

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I guess their premium members pay a little bit more...I think there are several levels of membership, too. I know that you can do freebie stuff, but it costs extra for different levels of membership, so I guess that's where they make their money.

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One of the real problems with setting up a fee-based network of sites is that the barrier of entry for competing sites is so low.

You need a fat bankroll to compete with HBO, but creating another Diabloii.net is relatively easy. Even if it isn't as good, if it's free it will siphon off a lot of potential paying customers for a Diabloii.net. Free usually wins even if it is lesser quality.

Here's my idea for micropayments. The onus needs to be on the merchant (the website) to track and charge the customer. Someone needs to write an application that's easy for websites to use that tracks a user's visits.

After enough visits are aggregated, the user in informed at the beginning of his next visit that his credit card will be billed by Paypal for $3 (or whatever) and then the slate is wiped clean until the user builds up another $3 charge. The site could even pop up a recent history of visits to show the user how many times he or she had been to the site.

In other words, you give away the first $2.99 and give the user an option to bail on the site before being charged. The charges could be based on individual visits or just visits by week or month. I think something like this is more workable than expecting a middleman to track thousands of websites and hundreds of thousands of users and handle the financial transactions.

I still think consumers will reject fee-based sites, but something like the above may be more workable.

"After enough visits are aggregated, the user in informed at the beginning of his next visit that his credit card will be billed by Paypal for $3"

Interesting idea Mark, except Paypal doesn't work like this. They can't "bill" me anything, and I'd never grant them that kind of access. It'd have to be some new billing animal.

Also, the potential for fraud is enormous in this (and most of these) ideas.

-Andrew

"Interesting idea Mark, except Paypal doesn't work like this. They can't "bill" me anything, and I'd never grant them that kind of access. It'd have to be some new billing animal."

You'd be at the site you want to visit and it would prompt you to pay your bill to give you new access. Paypal (or something else) would simply be the method you would use for payment.

The problem is that Paypal works fine for a $5 charge but not a $0.25 charge, so you need a way to track usage until you get an aggregate amount that equals the minimal amount that Paypal is willing to handle.

Anyway, it's all moot since there's no indication that people will pay for content anyway. How many newspapers and magazines rely solely on subscriptions? One? Consumer Reports? It's a bit crazy to think that websites can work this way.

"I'd rather read Bruce Geryk's review of WWII Online at Gamespot than Joe Schmoe's review at SchmoeGames, but if the Schmoe site is free and Gamespot is fee-based, I'll read the free site. That's what I'm talking about."

You'd sacrifice one measly _cent_ to choose Shmoe over Geryk? Dude. I don't know the economics of your situation, but that's pretty fucked up right there.

"But, as Mark notes, who the hell wants to peruse a laundry list of microtransactions every month? For that reason I think some sort of content/provider aggregation is necessary."

More to the point-- why the hell would you _want_ to? Nobody wants their water bill to document every single drop of water they use, or their electric bill to document every single kilowatt hour of energy they use. Of course, now that I've written this, Mark will probably scurry off and start watching his electric meter spin around while switching things on and off in the house.

Your ISP should be aggregating your micropayments for metered usage, just like the electric or water companies already are. And when you take a small cut of ten million one cent transactions, you can still make money, by the way. Just look at junk bonds in the 80's -- stranger financial things have definitely happened.

"That's easy. How would 500,000 websites, each setting their own micropayment prices, work?"

I dunno, how does the internet manage to work? While I'm still waiting on the whole flying car thing, clearly technology is capable of dealing with this kind of metered usage. Banks.. not so much.

"Maybe there's a way to make it work, but it just seems like a big headache, and what's the ultimate result? That we get to pay to read websites that we read for free now? Can't you just see the huge consumer resistance there will be to this?"

IMO, micropayments will revolutionize many, many forms of commerce when it happens. Just do the math, Mark. 1 cent times number of people reading your Diablo II interview. 25 cents times number of PvP readers per month. All of a sudden, a lot more people can do what they love, produce great content, and make decent money doing it. You're not excited about that in the least?

http://www.thecomicreader.com/html/icst/icst-6/icst-6.html

It's not a question of one penny vs. none, it's a question of dozens if not hundreds of one penny charges vs. free. Sure, one cent is nothing. But then I read four other articles so it's a nickel. Then I visit ten other sites so suddenly instead of one penny I've spent $0.50. Then that's $15 a month right there, and that's just me. There's my wife and kids who also like to visit websites. Before you know it, that one penny charge is $30-50 a month and includes several thousand transactions, so that one month where my bill is suddenly $75 I have to spend an hour looking at the itemized charges to see why it jumped. No thanks.

About the comparison to the water or electric bill, that doesn't wash because I'm not buying my water or electricty from several hundred different places and neither is my water or electric company.

How would my ISP aggregate my visits? They'd have to know how much each individual website charges for a visit. There's no way they could deal with that at their current price structure. They'd either take a cut of the transaction, which would be a billing nightmare for everyone involved, or they'd have to raise their prices to pay for the huge billing department they'd need to have. How does the $0.04 bill for my two visits to Joe Schmoe's site get resolved? My guess is the ISP wants it all because they have a minimum threshold that has to be reached before they split payments. Of course Joe Schmoe wants his cut too, but to work with the ISP he needs to play by their rules. And that's just one ISP. Others may have different rules. It's just a big mess when you're dealing with a middleman and small charges like a nickel.

The argument seems to be that while people won't pay $3 a month for access to a site, they'll gladly pay $0.15 to read a single article at the site. I just don't buy that line of thinking. It's fee vs. free, no matter what the cost is. That $0.15 is a big barrier to a lot of people because they know it's not really $0.15 but will end up being $10-20 by the time the month is over.

If the Internet does go to a fee-based model, then you'll probably see the small sites either die or join networks if they start charging. Customers want simplicity. They'll opt for networks where a blanket fee covers access to numerous sites in the network rather than having to worry about the aggregate charges of visiting dozens of independant sites. Very few people would opt for paying $0.25 to watch an individual cable TV show when they can watch all of them whenever they want for $20 a month.

You talk about micropayments for PvP. For about $15 a month I get access to about three dozen comic daily strips, as well as sports and other news. Think how much I'd pay if I had to buy my newspaper one article and one comic strip at a time. Yuck.

Finally, I'll repeat what I said earlier in the thread. There's no indication that micropayments are being driven by consumer interest. Micropayments are simply a reaction by sellers to a dismal advertising market and are not something that consumers want in any way, shape, or form as far as I can see.

"If the Internet does go to a fee-based model, then you'll probably see the small sites either die or join networks if they start charging. Customers want simplicity. They'll opt for networks where a blanket fee covers access to numerous sites in the network rather than having to worry about the aggregate charges of visiting dozens of independant sites. Very few people would opt for paying $0.25 to watch an individual cable TV show when they can watch all of them whenever they want for $20 a month."

The only way this can work is if every ISP becomes like AOL. You pay (x) per month for all the 'unique' content that AOL delivers, plus the internet.

I fail to see how your proposed model works any better than micropayments. I'd have to subscribe to maybe 5 or 6 different networks to get to all the content I want. That will easily add up to $30-$50 on top of the existing ISP charges I already pay.

"You talk about micropayments for PvP. For about $15 a month I get access to about three dozen comic daily strips, as well as sports and other news. Think how much I'd pay if I had to buy my newspaper one article and one comic strip at a time. Yuck."

How much of that x hundred pages of newspaper do you actually READ? Micropayments allow a much more accurate form of commerce-- people who create popular content are rewarded directly, rather than a whole network of middlemen and providers collecting a fee for a giant chunk of content.

And it doesn't have to be expensive.. remember, we're talking 1 cent here, or even a fraction of a cent. If you don't like metered consumption, then I'm surprised you use a cell phone, water, electricity, or even your ISP.

"Micropayments are simply a reaction by sellers to a dismal advertising market and are not something that consumers want in any way, shape, or form as far as I can see."

Well duh. Consumers want everything for free, of course. Payment itself is what they resist, not micropayments. The same arguments would apply to your subscription model.

We still haven't gotten around the problem of accountability. If I get a bill for all of my pay-to-surf Internet activity, it seems my choices are either get it as an aggregated lump ("You owe $15.45 for September's surfing") or itemized (a laundry list of 2,398 sites visited at $.01 to $.75 a pop, say). In the first case, how the hell do I know if this billing is fair, accurate, or even based on my surfing? In the second, we have the problem of going through the list line by line--as if you could even remember where you went on the 'Net a few hours, let alone weeks, after the event.

Metered consumption is fine, in fact I agree it's one of the better ways to approach paying for content on the Internet. But only in theory. When you pay for water or electricity based on meter readings, it's pretty straight forward. You don't get electricity from twenty different sources, some of them free, and you don't break down your electricity based on what appliances are running. More, your electric usage is pretty predictable, and any weird increases are immediately noticeable and verifiable.

With the Internet, and micropayments on a metered basis, I still don't see how you could make customers comfortable with the system unless it was made more like the electric company. You get on the 'Net and you get billed a flat fee for all your access/online time, maybe--and that would cover everything you go to while logged on. Pay the sites out of that fund gleaned from all 'Net users maybe. Or something similar, where you don't care what the specifics are, because you have a good intuitive feel for how your activities relate to what you are being billed.

Whether I'd like that sort of system or not is another matter. I like free Internet, and so far there aren't many sites I'd pay to use. I pay for general 'Net access, but other than for playing games (many of which charge anyhow) and email and shopping, the 'Net could vanish and I'd doubt I'd care much.

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Whether I'd like that sort of system or not is another matter. I like free Internet, and so far there aren't many sites I'd pay to use. I pay for general 'Net access, but other than for playing games (many of which charge anyhow) and email and shopping, the 'Net could vanish and I'd doubt I'd care much.

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Ten, fifteen, or even twenty bucks for a year's access seems pretty reasonable, from the user's standpoint. Just about any site that I really like I would pay fifteen bucks for a year of access. That's nothing, and for a year, I'd pay it without flinching.

I'd be far more "touchy" about something along the lines of five bucks a month, because that cash adds up. I almost wonder if even twenty bucks for a year would help the sites that much, though. Unless you keep new people joining, you're gonna get a lot of payments, but have to make them last for a year...I dunno.

Let's use this place as an example, for a hypothetical scenario. (Mark, you might not wanna read this...It might tempt you to start charging us!)

Say Q23 asks $20 for a year's worth of access. Let'say the the first month, 30 people subscribe. That's $600 for Mark and Tom. The second month, perhaps another 30 people, for another 600 bucks. But, after that, don't you think that most of the people who would join have already done so? So, for the next ten months, you've got to get by on those two months' worth of cash.

(By the way, I got those 60 people based on a very rough estimate of how many people post very, very frequently to the board, as they'd probably be the most likely to pay. Could be way more, could by a bit less...Hard to say.)

"And it doesn't have to be expensive.. remember, we're talking 1 cent here, or even a fraction of a cent. If you don't like metered consumption, then I'm surprised you use a cell phone, water, electricity, or even your ISP."

How exactly am I supposed to get by without water and electriciy. Hey, I eat food and I pay for it by the portion. By your logic I'm in love with metered payments.

As to it only being a penny, I doubt we'd see payments that low. And it would be more than a penny because you'd have to aggregate the total cost.

"Micropayments are simply a reaction by sellers to a dismal advertising market and are not something that consumers want in any way, shape, or form as far as I can see."

"Well duh. Consumers want everything for free, of course. Payment itself is what they resist, not micropayments. The same arguments would apply to your subscription model."

Yeah, but when consumers are used to getting something for free and then suddenly are charged for it, what happens normally? Most go somewhere else or do without. It would be one thing if websites were looking to move from a monthly fee to micropayments. Then you might see many consumers excited about it, just like a lot of people would prefer a cafeteria plan for their cable access where they could pay for individual channels and just pick ESPN and a couple of others and skip the rest. That's not the case here though.

"How much of that x hundred pages of newspaper do you actually READ? Micropayments allow a much more accurate form of commerce-- people who create popular content are rewarded directly, rather than a whole network of middlemen and providers collecting a fee for a giant chunk of content."

Except that with micropayments there's still a middleman, the business handling the transaction. You might see that middleman take a substantial portion of the micropayment.

And it may be a more accurate form of commerce, but it's also a much more expensive model than the current one, so it's probably doomed. It may just be that content sites will always be loss leaders on the 'net. Consumers may never embrace a fee-based model, so unless the advertising market for sites recovers, it may just be a tough go.

"The bottom line here is if the ad market does not come back and advertising cannot support large web sites, then either something new must be tried and found to work or you guys will be finding out if you really can live without the net."

Or people continue to run sites like this one for fun. There's always that possibility.

If more sites disappear, the remaining ones will probably be able to eke out better money from advertising. It may be really hard to make a profit for the sites with paid staff, but there will be plenty of game sites still.

The sites in the most danger are the ones that rely on full-time employees drawing salaries. There's this vast pool of sites run by fans or that are designed to make a small amount of money that will probably survive.

I think Gamespot's safe for quite some time because CNET has a nice warchest that will allow them to weather losses for a couple of years. The others I have no idea about. Gamespy seems to be one of the more professionally run businesses, but they may not be making a profit yet. Avault? Who knows? CGO? They're tied to the mag, so as the mag goes, so do they. Gamepower may be in trouble too. CMP is focusing on B2B publications and sites, so where does Gamepower fit in? IGN? Snowball has some problems.

"We still haven't gotten around the problem of accountability. If I get a bill for all of my pay-to-surf Internet activity, it seems my choices are either get it as an aggregated lump ("You owe $15.45 for September's surfing") or itemized (a laundry list of 2,398 sites visited at $.01 to $.75 a pop, say). In the first case, how the hell do I know if this billing is fair, accurate, or even based on my surfing? In the second, we have the problem of going through the list line by line--as if you could even remember where you went on the 'Net a few hours, let alone weeks, after the event."

Agreed. It's complicated, but I would argue it's only complicated from an _infrastructure_ standpoint. And because there is no existing banking system that can deal with this model. But remember, guys-- the internet itself was an impossibility 20 years ago, with many of the same technological hurdles. Think big for big changes! Micropayments really could revolutionize commerce. After all, what is the most ideal form of capitalism? Direct transactions between consumer and creator with a minimum of middlemen. And micropayments is probably as close to the ideal as we'll get in my lifetime.

We can certainly build a robust, distributed micropayment billing system if we already built a robust, distributed internet. I can think of several methods that would work in theory with existing technology (think DISTRIBUTED and AGGREGATED). The problem will be getting people to agree on a standard, but what else is new.

"Consumers may never embrace a fee-based model, so unless the advertising market for sites recovers, it may just be a tough go."

Possible, but if we can enforce intellectual property laws (see Napster), it is possible to create _unique_ content compelling enough to turn a profit. I'd pay 1 cent or even 5 cents to read Shoot Club. If it was a transparent charge automatically billed to me through my ISP, that's damn close to ideal. All I ask is that the pay URLs show up a little differently than the free ones (maybe with the potential charge on mouseover), so I know what I'm 'buying' for my penny or fraction of a penny.

"If more sites disappear, the remaining ones will probably be able to eke out better money from advertising. It may be really hard to make a profit for the sites with paid staff, but there will be plenty of game sites still."

I don't think internet advertising will ever recover. We've built a wasteland of worthless highway billboards that everyone ignores. The radical nature of "zero distribution costs for bits" has economic ramifications that only micropayments can deal with effectively, IMO. Proof? Check out the ridiculous proposals floating around from the record companies for napster-like services. Clearly unworkable. Laughable even.

"I like free Internet, and so far there aren't many sites I'd pay to use. I pay for general 'Net access, but other than for playing games (many of which charge anyhow) and email and shopping, the 'Net could vanish and I'd doubt I'd care much."

The fundamental issue is bits vs. atoms. Buying a book and reading it in the real world is a very different experience than buying an e-book and reading it online. I'm not saying one is better than the other, merely that the physical model does NOT work for the electronic world. It's completely broken-- hence, the collapse of the internet advertising market. We need a new commerce model that reflects what we can do with bits that we can't do with atoms: micropayments. You only pay for the exact portion you use, and the buyer and the creator (not just a reseller) are linked almost directly. It's like mail order taken to the extreme.. and we know how effective Dell's mail order business was in crushing Compaq's traditional retail model.

Yes, there is a lot of work that has to happen before this is possible. But until we do, the economics of atoms will always break down when applied to the internet.

"I'd pay 1 cent or even 5 cents to read Shoot Club. If it was a transparent charge automatically billed to me through my ISP, that's damn close to ideal."

Why would any ISP or bank want to be involved in this? It's just a mess. You're talking about ISPs and banks having to track millions of new transactions and keep records of them. I think it can be done, but I don't think it can be done in a cost-effective way. That's the real problem with micropayments. I can't imagine banks and credit card companies wanting anything to with them.

Imagine that PvP goes to a fee model. It's a nickel to visit their site. I go there once every two months, I'd guess, so I'd be charged $0.30 over the course of twelve months. How much will it cost Visa to process the six payments? How much will it cost my bank to process the six withdrawls of money from my account? I just don't see the financial institutions playing along.

I also don't understand what's keeping these sites from going to a fee model now? Just charge $10 for a year's access or $3 for three months and use Paypal. If people will resist paying $3 they'll resist paying a quarter. It's not like any site that wanted to do this couldn't give away a free sample, just like the porn sites do.

My guess is that sites aren't going to what is essentially a micropayment model -- $3 can't be considered a large payment by any means -- because they know it will doom them.

"Yes, there is a lot of work that has to happen before this is possible. But until we do, the economics of atoms will always break down when applied to the internet."

I have no idea what you're talking about. When I buy a hamburger, which is made of atoms last I checked, I'm paying "for the exact portion...[I]use" which you seem to think is the chief advantage of micropayments. The difference is that the hamburger is tangible. I can hold it in my hand. I can eat it. Seems to me like atoms win hands down.

I fail to see any compelling reason why consumers, banks, ISPs, and credit card companies will embrace micropayments. Websites are the ones who want them, so they'll have to come up with a scheme that bypasses the banks and ISPs. Good luck.

"I fail to see any compelling reason why consumers, banks, ISPs, and credit card companies will embrace micropayments. Websites are the ones who want them..."

Well put Mark. That's exactly what I meant when I noted that McCloud avoided the "possible" with his micropayment concept. The biggest failure of the tech boom may have been the over-concentration on idealistic "possibilities" that just didn't work when reality was applied.

Someone else mentioned being willing to pay $30 a year for some of these sites. I can't think of a single one worth that when I can get 52 weeks of EW for $30, 52 weeks of the New Yorker for $46, etc., ad nauseum.

I think it's clear that we saw the pendulum swing one direction in regards to banner ads. Now it's swinging the other way.

Guess what? The people exist. The readers are there (just not in truly great numbers, yet). Also the audiences most sites attract are homogenous. Which is a good and bad, depending on the product.

Therefore, advertising will one day work on the web. Maybe not in banner ad form, I think Interstitials are the way to go, like CGO used to do. Annoying? Sure. But they are just like magazine ads which is the accepted form.

"Click Through" is an insane concept and Marketing 101 should teach that.

Course... It'll take awhile.

-Andrew

I think the tower ads are much more effective than banner ads. I think some kinds of ads can work, but it remains to be seen what the advertisers are willing to pay after things settle down.

One real problem is that websites have huge "circulations" compared to magazines if you go by pageviews, so the websites want a lot of money for the ads because they want magazine rates. It's kind of insane to think that for $10,000-15,000 you can get a full page color ad in a mag like CGW, yet at the rates that CNET wants to charge, that would probably only buy you less than a day's exposure as a banner ad on Gamespot. That's just not right.

Right!
I never understood why web advertising was a failure. I mean, by all marketing logic it should work at least as well as Magazine, Newspaper and Billboard ads (which are also ignorable). Then somebody broke down the page-view versus real people numbers for me.

1,000,000 views doesn't equal 1 million visitors (as it is presumed to in the magazine world)... It can actually can break down to less than 20,000 readers. In the magazine world you can't sell advertising (except local business stuff) to that small an audience and the Internet is not a local business....

-Andrew

Yeah but a lot of advertising agencies online look at unique visitors these days, not just overall ad impressions.

--- Alan

And well they should. Having your ad in front of the same 20,000 people isn't the same thing as reaching 20,000 new people. In the print world agencies look at subscription rates and off the rack sales differently as well.

It depends on the advert goal of course. Sometimes you want to reach a small but loyal audience and other times you want a huge one.

Take Buffy The Vampire Slayer. WB claimed it doesn't do well with advertisers, because the audience is small and loyal (and the same every week). Most advertisers want "unique visitors" in that mix.

-Andrew

"Yeah but a lot of advertising agencies online look at unique visitors these days, not just overall ad impressions."

So how are the payouts determined these days? By unique sessions or by pageviews?

The whole pageview thing is really just a lot of smoke. One of the EverQuest sites gets about 60,000 unique sessions a day, which translates into 20 million pageviews a month. Thing is, those unique sessions probably mean they have 45,000 readers or something like that since a lot of people probably check the site at work and then later at home.

So what's a fair price for reaching 45,000 readers? That's a smalltown newspaper. What do those charge for ads? I'd bet not a lot. Yet under the old metric 20 million pageviews a month at a $3 CPM would have been worth $60,000, and that's just the website's cut. The network would probably take in two or three times that much. The whole thing was nuts.

"'Click Through' is an insane concept and Marketing 101 should teach that."

Clickthrough is at the core of my bits vs. atoms argument. With a print ad made of atoms, we have no way to determine how many people actually looked at the ad. All we can tell you is how many copies of the ad were printed, which isn't that helpful. How many of those magazines sat on the shelf and were returned unsold? How many people went to the table of contents and read three or four random articles and never saw your ad? How many subscribers had time to read this month's issue at all? Not to mention the cost of printing the ad, editing it into the magazine, and physically delivering to everyone.

Bits allow us to track impressions and clickthrough. To ignore that is to ignore one of the biggest advantages the medium offers. Treating the bits like atoms, or new media like old media.. that's a recipe for failure.

"So what's a fair price for reaching 45,000 readers? That's a smalltown newspaper. What do those charge for ads? I'd bet not a lot."

Ad rates for a smalltown newspaper that reaches 45,000 people should be _higher_, since the cost of delivering the atoms has to be factored into the equation. And "reaching" is a bit of a misnomer. They may print 45,000 copies, or even have 45,000 subscribers, but how many arrive in the hands of readers and are actually READ? There's the real power of internet vis a vis advertising.

"One real problem is that websites have huge "circulations" compared to magazines if you go by pageviews, so the websites want a lot of money for the ads because they want magazine rates. It's kind of insane to think that for $10,000-15,000 you can get a full page color ad in a mag like CGW, yet at the rates that CNET wants to charge, that would probably only buy you less than a day's exposure as a banner ad on Gamespot. That's just not right."

Exactly my point.

"I have no idea what you're talking about. When I buy a hamburger, which is made of atoms last I checked, I'm paying "for the exact portion...[I]use" which you seem to think is the chief advantage of micropayments."

So you can take one bite of the hamburger for 10 cents and return the rest to the cashier for a refund? I think you go to a different McDonalds than I do.

"The difference is that the hamburger is tangible. I can hold it in my hand. I can eat it. Seems to me like atoms win hands down."

It isn't about one being inherently better than the other. It's about them being very different, and the economic models that apply to one simply do not work with the other-- at all.

"I go there once every two months, I'd guess, so I'd be charged $0.30 over the course of twelve months. How much will it cost Visa to process the six payments? How much will it cost my bank to process the six withdrawls of money from my account? I just don't see the financial institutions playing along."

They wouldn't just process your 30 cents and call it a day, Mark, they'd batch process everyone at once. The percentage rule applies to the VOLUME, not individual transactions. It is a different model (no per-trans fees), and banks are definitely part of the problem. But they're mired in atoms and how atoms work. Someone has to drag them, kicking and screaming, into the future where the cost of delivery and production are effectively zero. How much "work" do you think electronic funds transfers involve? Compare that with walking into a bank and asking a teller to deposit your check.

"I also don't understand what's keeping these sites from going to a fee model now? Just charge $10 for a year's access or $3 for three months and use Paypal. If people will resist paying $3 they'll resist paying a quarter. It's not like any site that wanted to do this couldn't give away a free sample, just like the porn sites do."

Because it's a pain in the ass. I have to manually subscribe to every site I frequent? That means entering credit card info, tracking billing, etc across dozens of sites. Better if I just click the link and I get billed a few cents completely automatically by ONE source-- my ISP.

Anyway, hasn't it been proven time and time again that web subscriptions don't work? Why should I subscribe to Salon? I do enjoy some of their gaming related articles, but I don't want to pay $30/year for a site I visit maybe once a month. Better if I just get charged a nickel for the stores I do read. Eg, I really just want a bite of that hamburger, not the whole thing. Better for everyone involved, really.

"I fail to see any compelling reason why consumers, banks, ISPs, and credit card companies will embrace micropayments. Websites are the ones who want them, so they'll have to come up with a scheme that bypasses the banks and ISPs. Good luck."

It's not just websites, it's all electronic content delivery. And I agree, the infrastructure hurdles are high-- but the alternatives (eg, internet advertising) are a dismal failure, and I don't see them recovering any time soon. The price of typical internet banner ads will always be a miniscule fraction of the "real world" ad rates, and that's the way it should be.

"They wouldn't just process your 30 cents and call it a day, Mark, they'd batch process everyone at once. The percentage rule applies to the VOLUME, not individual transactions. It is a different model (no per-trans fees), and banks are definitely part of the problem. But they're mired in atoms and how atoms work. Someone has to drag them, kicking and screaming, into the future where the cost of delivery and production are effectively zero. How much "work" do you think electronic funds transfers involve? Compare that with walking into a bank and asking a teller to deposit your check."

No matter how you slice it, a system that has to ask thousands of different banks for nickels and dimes is never going to be accepted. There's no profit in it for the banks. In fact, it's likely that micropayments would cost them money. They can't pay out those nickels and not keep records of the transactions, and record keeping costs money. I need a record of my transactions. The bank needs a record. The credit card company needs a record, and the website needs a record.

You can batch process the fees on one end, but then the request for payments will be going to hundreds of different institutions.

Figure out a way where I can directly give PvP a quarter without having to involve my bank and my credit card and you may have something. Until then, transactions that small will probably be rejected by financial institutions. You have to have a way for them to make money from it. They're not going to take on a line of business that costs them.

I think it's just doomed. Not only will the websites have to convince people to pay, a dubious prospect, but they'll also have to convince them to adopt a new method of payment. Given that there will likely always be competing free sites, I just don't see people embracing fees and micropayments.

"It's not just websites, it's all electronic content delivery. And I agree, the infrastructure hurdles are high-- but the alternatives (eg, internet advertising) are a dismal failure, and I don't see them recovering any time soon. The price of typical internet banner ads will always be a miniscule fraction of the "real world" ad rates, and that's the way it should be."

The banner ads don't work because people ignore them. They're too small and always in the same place. Other types of ads will probably be more effective. I wouldn't give up on Internet advertising yet. It was overprice, but it may be underpriced now. There probably isn't a real alternative for websites anyway.

"I think it's just doomed. Not only will the websites have to convince people to pay, a dubious prospect, but they'll also have to convince them to adopt a new method of payment. Given that there will likely always be competing free sites, I just don't see people embracing fees and micropayments."

Asking people to pay will be a barrier, no doubt about it. But making that payment as small and effortless as possible should help a lot-- and micropayments are, IMO, close to the ideal in this regard. Just click the (visually different via some accepted standard) link, then a tiny charge is automatically accumulated on your monthly ISP bill you have to pay anyway. What could be easier than that?

"No matter how you slice it, a system that has to ask thousands of different banks for nickels and dimes is never going to be accepted. There's no profit in it for the banks."

I don't envision it happening that way. Here's what I was thinking.

1) billing

The websites talk directly to your ISP via some standard distributed billing protocol (perhaps along the lines of DNS). Q23 tells MindSpring that user (x) just visited the latest shoot club and should be charged 5 cents. The ISP will tally up all the charges for user (x) and include them in the normal monthly bill.. probably just as a raw total. You can go to some sort of standard software web interface to view your transaction detail by site or by charge if you like.

Regardless, you get a bill every month from your ISP just like you always have. No real change there-- ISPs collect cash from customers.

2) payment

Now, the ISP has collected all this cash from customers. What to do with it? Of course they'll extract the usual ISP fee.. say $40/month or whatever you usually pay. What's left over is the revenue from micropayments. I would expect the ISP to do a monthly/weekly electronic funds transfer of the micropayment revenue to some central clearinghouse, along with the slice of the ISP's micropayments database for that month/week. Very straightforward.

The clearinghouse would then accumulate the micropayments for Q23 until they reached some target value (say, $20). Then the clearinghouse would do another electronic funds transfer into the global domain account registered by Q23 (this is where tying into DNS helps).

3) fees

Granted, this isn't a direct transaction between producer and consumer. But I think it's a realistic one; we have to aggregate all the charges to get around exorbitant per-transaction fees, and that means involving the ISP and the clearinghouse.

Both the ISP and clearinghouse can be expected to take a cut of the transactions. But users will have a choice of ISPs, so we can expect fees to vary here due to competition.

And billing clearinghouses would be somewhat akin to DNS registrars, who maintain a local database of DNS entries but also are a part of the global DNS network. Ditto for billing records. Website opperators can pick dozens of places to register domain names, and they should be able to pick from dozens of micropayment providers, and hopefully some with lower fees. This probably won't be a choice CONSUMERS need to make.

This is eminently possible; the problem is getting everyone to agree on the protocols involved. And all the database vendors are wetting their pants at the prospect of all this transaction data floating around-- but that's exactly what all these fast, high powered computers are good for, guys. And I expect it'll be a long time before this micropayment traffic rivals even a fraction of what the creditcard guys do worldwide on a daily basis.

"The banner ads don't work because people ignore them."

People ignore advertising in other media, too. I don't consider this a valid 'reason' why internet ads aren't working. On the other hand, if the future of internet advertising is becoming more 'in your face', eg taking over your computer's desktop in popup or TV commercial style, I'm not sure that's a future .. er, with a future.

So you're talking about ISPs and a billing clearinghouse both taking a slice of the micropayments? How much is left for small sites? From my $0.30 a year for six visits to PvP, how much does PvP keep from those six transactions?

Do I get an itemized bill from my ISP? I hope so. Otherwise I have no idea if it's accurate or not. How long are the records kept? I guess due to legalities they probably need to keep them for quite some time in case the IRS or someone needs to do some investigating.

What happens if I dispute parts of my bill, which will be bound to happen? Suddenly my ISP needs a larger customer service department because it's responsible for collecting tens of thousands of micropayments.

It's just not going to happen. First, as far as I can tell, there's no consumer demand for micropayments. There seems to be no business demand for micropayments. The only people who seem to want them are mom and pop website owners who just wistfully say, "What if...." Who's going to develop this system?

Second, it seems to me that it would be quite expensive. The cost per transaction wouldn't go down, just the amount of money being moved would go down, so the cost of the transaction as a percentage of the transaction would rise dramatically. You'd still have the same kind of record keeping involved because it's money we're talking about, and customers will demand a record of how their money is being spent. If you just want to give them an aggregate amount, that's one more reason for people to avoid micropayments.

Finally, what's stopping websites now? Just use Paypal and ask for $5 for an entire year's access. If PvP is popular enough, the guy can get 20,000 subscribers to sign up and make $100,000. If he can't get 20,000 subscribers, which is a relatively small number, then micropayments of a nickel and dime won't give him anything but lunch money anyway.

Let's see a lot of sites flourish with small Paypal fees and then maybe I'll believe that micropayments may have an audience. I think Paypal accepts even $3 payments.

>>Why should I subscribe to Salon? I do enjoy some of their gaming related articles, but I don't want to pay $30/year for a site I visit maybe once a month.

You shouldn't subscribe to Salon. The person that visits every day should consider the subscription.

The only difference between subscribing to Salon for a year and a print magazine, say the New Yorker, is the difference between a tangible good and a more "virtual" one. As you see with Napster and warez, people do not consider most things downloaded or available online as a tangible good worthy of money. It's a strange mindset, but that's all it is.

My problem, thus far, with Salon's subscription system has nothing to do with cost or convenience, just that they still give me so much daily stuff I haven't found a compelling reason to subscribe.

"Do I get an itemized bill from my ISP? I hope so. Otherwise I have no idea if it's accurate or not. How long are the records kept? I guess due to legalities they probably need to keep them for quite some time in case the IRS or someone needs to do some investigating."

Yes, there would be some standard database format for storing these records, so you could view them at the micropayment clearinghouse database. The ISP wouldn't really want or need to be involved in this.

"What happens if I dispute parts of my bill, which will be bound to happen? Suddenly my ISP needs a larger customer service department because it's responsible for collecting tens of thousands of micropayments."

Nah, you would dispute with the micropayment clearinghouse, which would mediate between you and the website directly. I don't see the ISPs getting involved for disputes.

"It's just not going to happen. First, as far as I can tell, there's no consumer demand for micropayments. There seems to be no business demand for micropayments. The only people who seem to want them are mom and pop website owners who just wistfully say, "What if...." Who's going to develop this system?"

Was there any business demand for the internet in 1993? Was there any consumer demand for the internet in 1993? Where did all that come from? Who "developed" the internet? New technology requires new solutions. Why not do it-- micropayments have HUGE advantages for everyone involved. For one thing, it could make Q23 a for-profit business overnight. You tell me another model that will actually turn a profit for Q23 without creating a ton of extra work for you guys, because I can't think of one. The beauty of the micropayment model is that it generates proportional revenue for content providers, with a minimal, effortless charge to consumers. And consumers WILL benefit because content providers will be actually rewarded for producing big traffic numbers, instead of punished.

And sadly, bandwidth is not getting any cheaper. It's a damn shame. I was pricing colocated servers and bandwidth the other day, and prices haven't really budged in two years.

"As you see with Napster and warez, people do not consider most things downloaded or available online as a tangible good worthy of money. It's a strange mindset, but that's all it is."

There's a lot of consternation over this attitude, but I think it's correct-- consumers intuitively realize that the cost of production and distribution are effectively zero for this medium, and it SHOULD cost a lot less than a physical good.

However, the difference between "free" (napster) and "tiny associated charge" is incredibly important. Take Mark's example. If Q23's Bill Roper interview generated 20,000 page hits (and I'm guessing it did more), that's $100 at a half-cent per view. Build enough of those pages and, hey, goddamn if you don't have a workable web business. Without annoying subscriptions, begging for paypal contributions, credit cards, and the like. It's virtually effortless.

And honestly, how many of the people that linked through to the Blizzard article have any chance in hell of subscribing or giving Q23 money any other way? That's a pipe dream.

The problem is the banking infrastructure sucks ass for payments small enough to reflect the miniscule value of the goods, and then you've got guys like Mark who insist that the existing payment/subscription/commerce model can work in this context. I don't believe it can.

There are a lot of hurdles for micropayments, but I firmly believe that if we can build the internet, we can build a micropayment system into it that is fair and works for everyone.

"My problem, thus far, with Salon's subscription system has nothing to do with cost or convenience, just that they still give me so much daily stuff I haven't found a compelling reason to subscribe."

They've been really half-hearted about this whole subscription initiative. They're scared. And they should be; it won't work. Better for such an influential site to put their considerable muscle behind something like micropayments. Sigh.

Theoretically, micropayments are a perfectly fine way of charging for content. However, the biggest problem with them isn't unfamiliarity, or hassling the consumer to track each individual one, or blah, blah, blah.

It's that transactions are still too expensive to generate a profit on sub-dollar amounts. To hear everyone talk about it, the average micropayment will be $.12. Credit card companies don't let you charge less than a dollar to a card for a reason.

Since I Do This For A Living, I feel pretty confident making money on sub-dollar amounts isn't going to happen for at 5 years, possibly 10. Tracking individual ad views (and charging for them 10,000 at a time, all to one account) is practically free by comparison.

"To hear everyone talk about it, the average micropayment will be $.12. Credit card companies don't let you charge less than a dollar to a card for a reason."

Yeah, I don't see how you make money on a transaction that small. Even if you lump them together, at some point they still have be accounted for individually.

Just to give an example, my bank is a credit union bank not affliated with any national chain. If I spend $0.60 every year for six visits to PvP, I'm probably the only member of my bank that hits that site. My bank will have to process six requests for $0.10 each. How can you convince them to do that?

I still don't see why that comic guy who likes to do strips about micropayments doesn't just go to a $2 subscription fee. That's a small enough payment to see how much interest there is in fee-based sites. Charge $2 for six months access.

Another thing about micropayments that bugs me is the potential cost. In the course of a day my family of six might easily hit 30 different websites. If each one only charged a dime, that would still be $3 a day, or $90 a month. At that point we institute a "no pay" rule and no longer visit any fee-based sites.

I suspect that any fee-based stuff on the Internet will be more like cable TV, where you pay for access to a network. It's simpler and your costs are contained.

"Since I Do This For A Living, I feel pretty confident making money on sub-dollar amounts isn't going to happen for at 5 years, possibly 10. Tracking individual ad views (and charging for them 10,000 at a time, all to one account) is practically free by comparison."

But you never ACTUALLY GENERATE half-cent charges. They're just billing entries in a giant database in the sky. The clearinghouse aggregates those charges until they reach a certain threshold, then do an EFT for the threshold amount (probably more, depending on the interval). I hardly expect anyone to write a check for 12 cents, electronic or otherwise.

It's all about aggregation. Following my example above with specifics to Q23..

1) Wumpus clicks on the Q23 Bill Roper interview.
2) Wumpus' ISP, MindSpring, automatically and transparently logs a record in their micropayment database indicating he visited a pay link at Q23 for 1/2 cent. They aggregate all his charges in the bakcground, and include them on his monthly bill.
3) At the end of the week, Mindspring transfers all the micropayment transactions they have to the micropayment provider listed in the DNS entry for each domain. Let's say Mark and Tom pick MiniPay, Inc.
4) MiniPay will then aggregate Wumpus' payment with every other payment from visitors with different ISPs all over the world. If the aggregated total is greater than say, $5, then WP will cut a check that week to Mark and Tom for the total.

Wumpus pays MindSpring. $40 ISP charge plus whatever micropayments, say $10.

Mark and Tom get paid by WumpusPayments -- $100 for 20,000 impressions at a 1/2 cent per impression. Minus 2% fee or whatever.

Remember, guys-- Nixon took us off the gold standard. I'm not sure why there's such a wide misunderstanding of how micropayments work; of course you're not going to push it through the existing banking structure in fractions of a cent.

"Another thing about micropayments that bugs me is the potential cost. In the course of a day my family of six might easily hit 30 different websites. If each one only charged a dime, that would still be $3 a day, or $90 a month. At that point we institute a "no pay" rule and no longer visit any fee-based sites."

There are several fallacies in the logic here.

First, 10 cents is WAY too much for a micropayment. I think one cent is more in the ballpark, probably less for a lot of sites. I would expect fractions of a cent to become the norm.

Second, not all content will be pay. I still expect there to be a strong division between free content (main page, summary pieces, news) and pay content (features, in-depth articles, exclusives). Micropayments doesn't mean "everything becomes pay". It just means a better way to deal with the revenue generating sections of your site. You still need a free teaser to bring people in, and it's reasonable to expect the "normal" stuff to be free.. like this messageboard.

"I suspect that any fee-based stuff on the Internet will be more like cable TV, where you pay for access to a network. It's simpler and your costs are contained."

I guarantee we will have standardized micropayment systems in our lifetime. I'm willing to bet money on it.. only a micropayment, though.

I know it will happen; I'm just impatient. It's such an obviously superior model for online content delivery-- it'll really let the creative guys cut loose and get rewarded for their hard work (thus giving them tremendous incentive to produce even more cool stuff), whereas with the current system they just get reamed. The old atom-based models just aren't working.

Also that should read "MiniPay" above instead of "WumpusPayments". :O

I cant keep up with this thread, it gives me a headache, this money talk...but anyway (i might be repeating a comment), but couldnt this micropayment thing be specific only to big budgeted sites? I cant see a small site being able to handle the logistics of micropayments and stuff. wouldnt the bandwidth and contracts with the isps, cc companys and banks be a nightmare for the smally designed sites of people developers?

my 2 coins...yah

etc

Jeff, I hadn't really thought of bundling; aggregation would probably work then to cut costs once you get out to the ACH network. That still leaves databases with trillions of individual entries for each "micropayment clearinghouse," though, as you have to log each transaction seperately at some point in the chain. All doable, just expensive.

It all seems like a shitload of work to get around incompetent ad execs, which is the only thing blocking an effective ad model at the moment. I'd rather fix the advertising industry vis-�-vis the web.

Wumpus- in a state run world this might work but you are missing some little things.

Why?

Why would your ISP do it? For a cut of course. Why would the clearing house do it? For a cut of course? Banks? Chop that penny up - what is left?

You keep talking about aggregating the cost - but your isp pays for bandwidth right? How much does it cost to send this micropayemnt? Aggregate that demand - what are their costs? The cost for storing the data? The cost for processing? And you are just looking at the perfect world - what happens if there is trouble? Why did webvan fail? You can't run a company at a 1% profit margin, first problem - there goes your profit. If the clearing house needs to do the customer service, what is their cut for that service? How long back do they need to store these terrabytes of data? Do they have ads on their site to recoup the bandwidth when you come to look at your billing statement?

The first rule of running a business that lasts - if it touches your hand, you better have made money from it. You have too many hands with too many real costs to every see anything back from that penny.

As for the demand. There was no previous demand for the Internet because it did not exist to commercial ventures before that time. The momement it was commercially available, there was a demand.

Remember, Jimmy carter was a peanut farmer. I am not sure why you have such a misunderstanding about costs and how a business works.

Chet

"I'd rather fix the advertising industry vis-�-vis the web."

I would too. I think this is much more likely to happen. Like you said, at some level the micropayments still have to be accounted for individually and that won't be cheap.

The web ad market ballooned because it was new and no one knew how it would work and because there was a lot of foolish money being spent. It won't ever be what it was, I'm sure, because it was artificially inflated. It might get better than it is now, though, which is probably worse than it should be.

There are also better ads than the banner ads, which are a waste. Check out my GameSpin column and the ad for Alone in the Dark that's integrated into the column.

http://www.gamespy.com/gamespin/july01/gamespin18/

That's a much more effective ad. You notice it and it's targetted well. I've seen effective tower ads too.

I think the ad market will rebound. It's in a slump for everyone now -- newspapers, mags, and of course websites. It should get better.

Mark - yeah, that's a pretty good ad. Have you seen the Intel ad for some racing game? I saw it a while back on OMM; it's just a simple little flash animation in a sidebar with a pedal taking up all the space. It may still be floating around UGO.

When you move the mouse over the pedal it proportionally accelerates the car in the background until it's floored; then there's a well done little animation of the car taking off and some blurb about a racing game. If you move the mouse off and on the box, you can rev the car.

I don't care about cars or racing at all, and the interactivity on that ad actually got me to clickthrough on it. Lesson to world - copy this shit.

Bravo Chet,
That's exactly what I meant by "reality" getting in the way of idealistic ideas like McCloud's micropayment concept and Wumpus' belief in it.

Thanks also to --scrolls up-- McCullough for his knowledge of the credit card business. I knew from my retail days that credit card transactions cost money, so a store loses money each time it accepts plastic - but - that's offset by the convenience and security issues. Those benefits don't exist with micropayments.

- Andrew

Stores accept credit cards because to not accept them is to turn away business, so the same could be said about micropayments. If your ISP won't facilitate them, you'll get one that will.

Thing is, there's no groundswell of demand for micropayments, so consumers aren't going to demand that their ISPs facilitate them.

It really has to be an initiative that starts with the middlemen, the ISPs, etc. You have to show them how they can make a healthy profit by being the bill collector for micropayments and maybe they'll jump on it.

Without much demand demonstrated by consumers, I don't see it happening though. There's no evidence that people will be happy even paying a nickel for online content.

Businesses will be very reluctant to invest in the infrastructure needed to make micropayments work without some better sense that consumers will use it en masse. It doesn't matter if it's a superior delivery system for content, as Wumpus argues, if the customer base isn't there.

And all this assumes that micropayments can be profitable for the bill collectors and clearinghouses, something I'm still dubious about. And after they take their cut, how much is left for the website, as Chet questioned?

There's one other thorny issue. If I have a website that charges micropayments and I expect the ISPs to collect the payments, I probably need a contract with each ISP to authorize them to collect my money. It's just another mess, especially when you consider foreign ISPs being part of the picture.

While I'm one of the people you will find it easiest to convince that people will pay for content on the web, I don't think that micropayments is the answer, chief reason being that people like to know what to expect. On my cell phone, I know that unless I exceed my given minutes in a month, my bill is going to be exactly the same as it was last month. My electric company has an "average payment" system, where they figure the total amount of electricity used in a year (based on last year's activity) and divvy that up among 12 months, so that my bill is the same every month this year, and I know what to expect. What I like about internet access is that you pay a flat fee for unlimited usage, no by the hour. I don't want micropayments spoiling that. And, like Mark said, all those add up -- I'm going to wind up with a surprisingly huge bill one month, and that's gonna be that -- no more pay sites for me.

Now, if I agree to pay a set monthly/yearly fee for a site/network of sites, then I know what to expect. Different story entirely.

Like Mark, I expect that the advertising model will make a rebound. Wumpus, there are a lot of good points in your arguments, but I just don't think that micropayments are the way to go. Now, maybe if I can pre-pay, so I don't accumulate a massive bill one month, we'll talk. Until then, no micropayments for me.

I also don't think the ISP should be involved. If you're going to have a third-party clearinghouse, why don't they bill you? I don't see any sense in involving the ISPs. It doesn't seem necessary. Cut them out of the equation, and we may have something we can work with.

Chet, I'm going to physically come to your house and remove the dash key from your keyboard. This time (dash)(dash) it's personal.

"You keep talking about aggregating the cost - but your isp pays for bandwidth right? How much does it cost to send this micropayemnt? Aggregate that demand - what are their costs? The cost for storing the data? The cost for processing? And you are just looking at the perfect world - what happens if there is trouble? Why did webvan fail?"

Webvan failed because it was a model based on the physical world-- delivery of atoms using trucks. Compare with bits: the cost of processing and delivering a bit is basically ZERO. How much does it cost Metallica to generate 5,000 copies of their latest MP3 and distribute it to the world? How much does it cost Steven King to write another chapter of his web novel and sell it across the world? Compare that with costs of the physical equivalents -- pressing, duplication, materials, delivery via webvan.

Computers get faster and cheaper every day. To a much lesser extent, so does the network. Whatever the costs of atoms, bits will always be so cheap that they're essentially free and asymptotically getting closer and closer to zero every second. I'm going to call this the "Julian L. Simon" theory.

http://www.bmgt.umd.edu/~jsimon/

Mr. Simon was a fascinating man. In the same way that he argues people are the ultimate resource, I argue that bits are the penultimate resource.

"You can't run a company at a 1% profit margin, first problem - there goes your profit. If the clearing house needs to do the customer service, what is their cut for that service? How long back do they need to store these terrabytes of data? Do they have ads on their site to recoup the bandwidth when you come to look at your billing statement?"

In the long run, hardware is free. Bandwidth will be free, albeit on a slightly longer timeline (longer than Jason Cross realizes). However, you do have a point about people-- customer service via humans is, and will always be, expensive. That's why I envison a nearly-automated online system. When was the last time you spoke to a human being about your DNS entry? I've been registering domains on and off since 1995 and I have never ONCE spoken to a live human being about that.

"The first rule of running a business that lasts - if it touches your hand, you better have made money from it. You have too many hands with too many real costs to every see anything back from that penny. "

The rules are different when the hands are virtual.

---

Quote:

The rules are different when the hands are virtual.

---

"I also don't think the ISP should be involved. If you're going to have a third-party clearinghouse, why don't they bill you? I don't see any sense in involving the ISPs. It doesn't seem necessary. Cut them out of the equation, and we may have something we can work with."

The ISPs already have a consumer billing infrastructure; the micropayment clearinghouse does not. Big, whopping difference. Billing each and every consumer individually, outside of their normal ISP bill, adds a lot of overhead to the process; the ISPs already do this. Why reinvent the wheel on that front? And Mark already said he doesn't want a bunch of different bills.. he wants a unified single bill. Having 5 different micropayment companies bill a single consumer (it would happen) is not a good idea.

Say what you will about the feasability of the concept.. I agree there are many hurdles to overcome. However, if _any_ model is going to work, it is the one I've outlined. It's the most practical.

The ISP and the Micropayment clearinghouse both will get a modest cut of the aggregated totals. Heck, even if you gave them a paypal-esque 2.5% each, that's still 95% of the income for Quarter To Three. So that $100 Mark and Tom would generate for the Roper interview would become "only" $95. And all billed from the same micropayment clearinghouse, through hundreds of different ISPs.

The real problem is getting the ISPs on board. But why the heck not? 2.5% of a million bucks a month is nothing to sneeze at. And the invisible hands of computers will be doing all the real 'work', with minimal human oversight. Think DNS folks! Think DNS!

Also, I don't expect the micropayment transaction records to add any appreciable traffic to the 'net. We're talking maybe 500 bytes of data, which is just noise against all the 500kb porn images flying around. Or maybe it's a Tribes 2 screenshot.

"I think the ad market will rebound. It's in a slump for everyone now -- newspapers, mags, and of course websites. It should get better."

I disagree. I think the internet ad market is going to get worse. When the pie is already large and getting bigger every day-- what does that mean? Infinite supply, but a fixed demand. I think you can do the math there.

"The virtual world still has to turn a profit, and it's currently having a lot of trouble doing so."

You have to discriminate here between content ( music, writing, software, etc) that can be delivered electronically-- and physical "stuff", which cannot. I think plenty of websites are profitable when selling physical items, if there's enough demand. But they're really just virtual storefronts. The physical models work OK in that case-- we can't beam your new refrigerator into your home over the internet.

"Say what you will about the feasability of the concept.. I agree there are many hurdles to overcome. However, if _any_ model is going to work, it is the one I've outlined. It's the most practical."

So no matter how much evidence we present on how unfeasible it is you'll still think it "the most practical"?

"I disagree. I think the internet ad market is going to get worse. When the pie is already large and getting bigger every day-- what does that mean? Infinite supply, but a fixed demand. I think you can do the math there."

That's where you're wrong though. Advertising is all about finding demand and meeting it. Targeting it effectively. Maybe the demand is fixed, but it's never been targeted effectively. An advertising axiom states that it's worthwhile to reach a even a tiny audience if that audience is the market you want. The Internet audience is there, it's growing (despite the economy) and once advertisers start targeting more effectively the money will start coming back. Maybe not to game sites, that's probably too limited, but the Internet is still an untapped gold mine in terms of focus.

Remember, Star Trek failed in the 60's mostly because advertisers thought the audience too fixed, too limited. Even though those Neilsen ratings would equal a VERY "attractive demographic" today, back then it was really the advertiser's thinking that was too fixed and too limited.

-Andrew

"The Internet audience is there, it's growing (despite the economy) and once advertisers start targeting more effectively the money will start coming back."

I would argue that targetting ads takes nearly as much work as a micropayment infrastructure. If I give you an IP address, you can tell me the likes/dislikes, income level, address, and purchase history of the _person_ behind the computer at that IP address? Because that's what it takes to really target an ad. Everything else is just stabbing in the dark with a very large fork.

As the host in SmashTV said-- Good luck! You'll need it!

---

Quote:

If I give you an IP address, you can tell me the likes/dislikes, income level, address, and purchase history of the _person_ behind the computer at that IP address?

---

News flash. They already do that. And it's working so very well..

They don't do that enough. It's very likely to find any kind of banner on any kind of page. They're not related nearly as often as they should be. Like that X10 camera pop-up. It's everywhere. It doesn't care what website you're at -- it's gonna intrude anyway.

Maybe it works better than anyone thinks, too, because we all know what camera I'm talking about, and if any of us are in the market for a camera, we're gonna remember that one.

Actually, those intrusive ads have made me remember NOT to buy that one. There's a big difference between advertising and bludgeoning.

--Dave

"Chet, I'm going to physically come to your house and remove the dash key from your keyboard. This time (dash)(dash) it's personal."

Your humorless persistence astonishes all. You are the Bill Buckley of Q23, minus the wit, intelligence, and sailing expertise. You resist data and argument without discrimination;

Is it real, or is it � wumpus?

HUMAN: "I don't think WindowsXP is a big leap. The interface changes are minor."
WUMPUS: "The interface changes are HUGE. Biggest since 1998."
HUMAN: "How are they huge?"
WUMPUS: "These are the most significant interface changes since 1998, at least. It's going to be HUGE."
HUMAN: "What sort of changes?"
WUMPUS: "You people just aren't getting it - this is a MAJOR upgrade. Mark my words."

"I would argue that targetting ads takes nearly as much work as a micropayment infrastructure."

Maybe, but there's no evidence of demand for micropayments. Targetted advertising is something that lots of people are willing to pay for.

CNET's had pretty good success with getting people to divulge demographic information in return for getting access to newsletters. That's one relatively painless way of getting people to "pay" for content.

Wumpus, you read like a circa-1998 Wired article. Here on The Planet Earth, bandwidth and hardware cost money.

Lets work through a business model: assume QT3 has 10,000 unique visitors this month, hitting 5 pages a piece at a cent per page, for a grand total of 50,000 page views -> $500.

How do you bill them? Possibilities:

The website handles it, and just sends "transfer these funds around" messages at the end of the month. This is infeasible for any website that's not already selling stuff, as they have to pretty much come up with an end-to-end billing model. Additionally, you'll have to sign up for billing on every website you visit. Ok, ignore this one then, since we're talking about QT3-size sites.

The clearance center houses it; just put some in-between thingy on the server to move it off to the clearance center. However, this requires you to do the equivalent of signing up for a bank account every time you go to a website that uses a clearance center you haven't used before. This isn't going to fly for a good while, so I'm going to ignore this one.

Another one: the ISP tracks the websites you go to and automagically takes care of the money transfers. The problem here is that this changes an ISP from a "telephone company" equivalent into a "bank" equivalent, which is a pretty damn big business model change. I'm not even going to get in the difficulty of tracking all outgoing ip addresses and turning them into billing requests, or reliable authentication, or blah blah blah.

Any of the above methods would require insane one-time expenditures to get the necessary infrastructure into place.

Conclusion: micropayments are horseshit. Instead of all this ridiculous geekery-in-search-of-a-problem, you can just stick ads on your pages and charge the same per page you would for a micropayment.

Wumpus, nobody screams when they get a mistargeted ad. The same cannot be said for when you are talking about actual money trading hands. Who cares if your DNS goes down. But did you know even though they process millions and millions of transactions daily, when you call the customer support of your merchant credit processing house, you speak with a real live human? Because its about money!!!!

The safeguards for abuse and fraud take processing, the bandwidth does cost money as do the hard drives. As do the humans who will have to investigate fraud, are fraudulent DNS entries a big problem for you?

Do you think real live people monitor your DNS servers? Do you think they have a human resource staff? An office? Phones? Health care? An electric bill? Are the snacks in their vending machines free? Nothing else in the world cares that they are a Internet company, you are exposing one of the fallacies of Internet boom companies.

Nobody does anything for free, yet you assume companies will. Your childlike belief in how business work cracks me up. If bandwidth is free, why do I keep getting billed every month for our T1? I am going to have to talk to sprint...

Chet

Maybe I miswrote when I used the term "Targeted Ads". By ad targeting I only meant aiming ads at customers. Not culling customer data so you can send them appropos junk (e)mail or the crap that Amazon does.

I'm talking about selling Mountain Dew and Red Bull at computer web page fans.

Advertising NYTimes and New Yorker subs at Salon/Slate readers.

That sort of targetting. Selling game ads at game sites isn't helpful because game site people are already aware of your game. Selling movie ads at game sites is a better investment in brand/product awareness.

Reading about Diablo?
Here's an ad for the D&D Movie & Red Bull Energy Drink.
etc.,

Reading about simulations? Have you driven a Ford lately?

Really, it doesn't have to be that targetted, but a little creativity is needed. 90% of web ads are scams or scam-like, that's why they don't work.

Mainly, though, ad agencies need to see better stats on how many real visits sites are getting and ad rates need to be reasonable, cause the numbers are still small.

-Andrew

Now I am excited.

After reading Wumpuss's clear business plan and super scaling explanation. I contacted mp3.com, double click, Audiohighway.com, farmclub.com - I let them know that those negative numbers they are reporting, must be positive numbers. Everything is free and since they have no manufacturing costs, do not provide customer service, and scale to millions of transactions they must be rolling in the money. I am sure I will get a rather large reward for pointing out this accounting error.

I am also going to try and contact the bankrupt or ailing DSL providers Covad, Reflex, Telocity, and Bazillion.com - again, it must be a mistake. Since bandwidth costs nothing, they must be rolling in the money selling this free commodity.

Does anyone have any idea what my accounting fee should be for my new service?

Thanks

Chet

To anonymous:

HUMAN: "How are they huge?"

To which I already replied in the relevant thread--

http://www.winsupersite.com/reviews/windowsxp_beta2.asp

Instead of wasting everyone's time with idiotic personal attacks, why don't you read the article I linked that explains the differences in detail?

In fact, allow me to quote that article here--
"The first thing that's obvious about Windows XP is that the user interface has changed dramatically."

But of course, you're smarter than myself and Paul Thurott, and every other industry analyst. What was I thinking?

"But of course, you're smarter than myself and Paul Thurott, and every other industry analyst. What was I thinking?"

I read the article you linked to. I failed to see the dramatic changes. I just don't count things like more robust file assocation options and a skinnable UI as being "dramatic" changes. A dramatic change for me would be a UI that significantly improves my productivity in working with the OS or let me do something new that I haven't been able to do before.

Might "industry analyst" Paul Thurott have a slight interest in hyping Windows XP's "dramatic" changes? One wonders. I mean, he runs a "SuperSite For Windows" *and* it's "brought to you by Windows 2000 Magazine."

I know none of it looks like a "dramatic" change to me; but then, I'm not an "industry analyst."

"I read the article you linked to."

You're a better man than I Mark. I didn't even make it halfway through the article before I got tired of it. I skipped to the conclusions section to see if there was anything of substance there, but alas, there wasn't. I did make it all the way through the section about the UI, and I didn't read anything that could be called a "dramatic" change in my book. Evolutionary? Yeah. Improvements for the better? Possibly. Dramatic? Nope.

Jason, you hit the nail on the head there.

My favorite part of the article is this: "Surprisingly, even its current beta form, Windows XP is a major success across the board" In the strictest sense, this isn't true, since the ultimate purpose of XP is to make money for MS, and I don't think they've sold any copies yet.

Oh, and setup taking a hour regardless of configuration does NOT impress me.

Of course, I'm not an industry analyst either.

You can add PC magazine "industry analysts" to this list.

http://www.pcmag.com/article/0,2997,s%253D1474%2526a%253D3149,00.asp

"This fall Microsoft will release Windows XP, its first major operating-system upgrade since Windows 95."

"Testers within PC Magazine Labs commented that Windows XP bears a resemblance to Apple's Mac OS X. Longtime Windows users will find the change about as extreme as the change from Windows 3.1 to Windows 95, which introduced the Start button and a new file folder view. But Windows XP's appearance is only one part of the new OS."

It's not just me, gentlemen. Of course, I've been eating, sleeping, breathing, and drinking Windows since 1993 as a developer, so I'm closer to this stuff than most are.

I can certainly post more links that say exactly the same thing, from some of the most respected analysts in the industry. You may or may not agree with it-- fine. But it's true.

"Wumpus, you read like a circa-1998 Wired article. Here on The Planet Earth, bandwidth and hardware cost money."

I agree, the cost of bandwidth is a major issue. It really isn't declining-- if anything, it's stabilizing. I've been telling Jason "everyone will have broadband within 5 years" Cross this for the last three months. It's a problem.

What you guys may not realize is that the kinds of text-based transactions are a tiny drop in the bucket compared to the terabytes of GIF and JPG images thrown around the 'net every day. It's laughable to even compare them.

Hardware, on the other hand, really is free. Have you priced PC133 memory lately? Or hard drives? Or CPUs? They're at all-time lows. Just take a stroll down to pricewatch, then dig up an old computer magazine from a few years ago. G'wan. I dare you. It's the business model that brought Microsoft where they are today.. you have to develop as if hardware was free.

Getting back to bandwidth. This is a legitimate concern. The cost per page has to be lower than the micropayment amount. I don't think this is a problem for mostly-text based content, however. Many hosts will sell you 50 gigabytes/month (that's 1,706 megabytes per day, or three nearly full CD-ROMs) for about $300. That works out to a little over half a cent per MEGABYTE.

Not a problem for a site like Q23 with mostly text and a few graphics. Now, if you're serving largish MP3 files, you have some bandwidth cost concerns. If the average MP3 file is ~4mb, that means the transmission of said file costs you a little under five cents.

"Conclusion: micropayments are horseshit. Instead of all this ridiculous geekery-in-search-of-a-problem, you can just stick ads on your pages and charge the same per page you would for a micropayment."

Which would be fine, except nobody's buying the ads. Therein lies the problem. I'd argue the current advertising model is horseshit, because it's working about as well as our imaginary micropayments system.

Also, to Chet. There's a misconception about what I'm saying here. I'm trying to debunk the myth that micropayments are a fantasy; that they're impossible. This just isn't so. It is definitely possible, and it will happen in our lifetimes. That _doesn't_ mean it's going to happen overnight or even in the next 2 years. There are significant hurdles to overcome before it can happen.

But it's going to happen.

"I can certainly post more links that say exactly the same thing, from some of the most respected analysts in the industry."

Quit fucking around. I don't give a shit about your analysts. I care about facts. Quote the best examples of what you think are the great improvements (in your words or those of "industry analysts") and post them here. Or shut up.

"The safeguards for abuse and fraud take processing, the bandwidth does cost money as do the hard drives. As do the humans who will have to investigate fraud, are fraudulent DNS entries a big problem for you?"

Oh yeah, and eBay does a STELLAR job of having their so-called "human" reps investigate auction fraud. Pah. As in, they could give a damn. It's happened to me several times. I *PREFER* a consistent automated enforcement system to that. Those guys make Barney Fife look like Daryl Gates in comparison.

"Who cares if your DNS goes down."

Are you on crack? Ask hotmail how they would feel about their DNS being down.

"Everything is free and since they have no manufacturing costs, do not provide customer service, and scale to millions of transactions they must be rolling in the money. I am sure I will get a rather large reward for pointing out this accounting error."

The day Google goes out of business I'll agree with you. I'll even pay your reward. Until then, believe it: you can scale to millions of transactions with a staff of 60.

http://biz.yahoo.com/bizwk/010710/zakwawtnp2hsdj9uuujfza.html

"Nobody does anything for free, yet you assume companies will. Your childlike belief in how business work cracks me up. If bandwidth is free, why do I keep getting billed every month for our T1? I am going to have to talk to sprint..."

Free RELATIVE TO THE COST OF PHYSICAL DISTRIBUTION. Not completely free. Approaching zero but not equal to zero. And bandwidth is a problem as I outlined above; hardware is getting much cheaper over time than bandwidth is.

"Quit fucking around. I don't give a shit about your analysts. I care about facts. Quote the best examples of what you think are the great improvements (in your words or those of "industry analysts") and post them here. Or shut up."

You know, it's eerie. I had this _exact_ same conversation in 1995 prior to the release of Windows 95, except it was taking place on AOL via dialup instead of on this website via the Internet. I don't feel like revisiting the same tired old ground year after year.

If you don't like upgrading, then stick with the tried and true Windows 3.1 and DOS. It's not my job to tell you what your needs are. Read the articles and decide for yourself.

Here's another one for you, which reflects RC1, the very latest version of XP.

http://www.winsupersite.com/reviews/windowsxp_rc1.asp

"I can certainly post more links that say exactly the same thing, from some of the most respected analysts in the industry. You may or may not agree with it-- fine. But it's true."

You don't need to post more links. You simply need to post the relevant changes yourself. What's the dramatic change in the UI that's going to make me as a Windows user more productive? Just tell me that. Otherwise, saying a lot of industry pundits agree that it's a big change is meaningless. I don't care what they say. You're convinced. Now convince me with facts, not links to other opinions.

Ok, I read the PC Magazine look at XP. It's almost laughable. To wit:

"Perhaps the most different element of the new Windows is the welcome screen, with users' names and account types�administrator, standard, limited, or guest�listed on the right-hand side of the screen."

The welcome screen is the biggest change? Excuse me, I just soiled my underwear I'm so excited. Not to downplay this, because being able to have different desktops can certainly be nice for a lot of users, but it's not a big deal. I just love this part too.

"And when account settings are set up correctly, parents won't have to worry about whether their Quicken files will survive their children's next round of Quake."

Yes, playing Quake destroys data. Jesus, why do they even write shit like this?

"Microsoft has taken an important, positive step toward network security with the introduction of the Internet Connection Firewall. Although not a replacement for a firewall program with a higher level of protection, this utility will help protect unsuspecting broadband subscribers from Internet hackers by preventing outsiders from scanning ports."

Hey, it's about time for a built-in firewall. Welcome to the '90's, Microsoft. Oh wait, it's 2001. And the firewall is "not a replacement for a firewall program with a higher level of protection...."

"Internet Explorer 6 is a big plus for the consumer."

And you don't need XP to get it.

"Windows XP flat-out improves the digital media experience."

I believe this, but this is hardly a revolution. It's an iterative improvement. It's also something not all that relevant for someone like me who doesn't do much with multimedia.

Honestly, it sounds like there are a lot of nice-to-have but hardly need-to-have improvements. I still think the new kernel with better stability is far and away the most significant change. I suspect that it will just keep Windows from crashing; apps that have problems will still crash and I'll still lose work.

What are the big changes that will improve my productivity?

Why I bother I do not know...

Wumpuss- yes your site's usage could be handled by a 486, but again you want to talk scale. So then we are talking gigaswitches, serious server farms to handle the billions of transactions - because if the isp gets the .025 percent - what does the clearing house get? Or do they do it for free? And don't forget doubles if not triples for everything - and this means the same for your isp. This is money - this is not a no backup situation. Are the servers self monitoring? Will robots keep them running? Who hires these robots? Who fills out their healthcare forms? Supervises them? Cleans their offices?

Bandwidth? Again we are talking scaling to the billion tranaactions. Do you think you just send once using udp "wumpuss .01" It will be encrypted, it will have multiple verifications and handshakes - if this would grow like you think the sheer open connections to the clearing house would dwarf any current system. And remember to quadruple it. From the site to to the clearing house to your isp back to the content server. How else will the content server know you have a valid account in good standing? Or does the clearing house have to handle all of this private information? Who clears it up if your account is mistakenly disabled?

And of course it would have to have a backup system for everything. Does this money server run for free at the isp? Do you think they will hire people to run it? Manage it? If your isp bill is $10,000, don't you think you are going to call? Or is it automatically wiped? What about the accounting to the content sites? Who handles that? If the clearing house has to aggregate all the isps, can all isps signup? Are all valid for all sites? You will have to make the server end cheap so eventhe small isp's can afford it - but also able to handle the scale of transaction. What if one is a bad seed for a certain content server? Can they still let their visitors visit sites if their money servers are down? What about software glitches? If they reboot their servers do you lose your content? Is that money refunded? It will not matchup with the content server's records.

And no one cares about your dns, but I am sure microsoft actually talks to who is running their dns - don't cloud one service level with another.

Comparing fraud in this system to fraud in ebay where one guy claims the speakers aren't as black as they are in the picture??? give me a break. What system handles fraud automically and up to your level of need? Or does that need to be invented as well?

While google is privately held so you have no idea if they are turning a profit - every other search site/portal is losing money so um... okay... How is PSI doing? But they own a mint to print money!!!!

But you want to hold out - that all the isps are going to change their business model, take on all the hassle the expense the uncertainty just because you have a untested, unproven idea and infastructure that could possibly make them .025

Chet

Why Google isn't relevant to the micropayment debate.

Quote: "The day Google goes out of business I'll agree with you. I'll even pay your reward. Until then, believe it: you can scale to millions of transactions with a staff of 60."

Google may handle millions of transactions, but it has nothing to do with micropayments.

For one, transactions are fleeting - you make your search request, you get an answer. There is no logging of your ip, your destination site, the file you downloaded, no crossreferencing with a payment company (paypal/credit card/unit of exchange of choice).

2. There is no redundancy. If one of google's machines fails, they shut it down, remove the entire machine, plug a fresh one in, reinstall from backup. There is no information that is unique to that machine. If you're storing financial transactions, you need redundancy, you need raided drives, you need hourly/daily/weekly backups.

3. There is no audit trail. If the cops want to start tracing credit card transactions (ie. possible fraud) there is an audit trail, there are backups, there are business instruments. There is no such equivalent for google.

4. Google relies on ads and private indexing (i.e. internal business/government/institional) sites. Micropayments would rely soly on random members of the internet.

5. Micropayments rely on enforcement of copyright (no mirror sites) and a resource that cannot be gained elsewhere (as had been said elsewhere). Websites do not have this luxury. The google equivalent would be their algorithms and their huge index of the web, neither of which is easily reproduced.


I have no idea where the internet is going, but believe that free content will survive. It's in what form that will be interesting to see.

westyx

I've changed my mind; I don't think the long-term problem with micropayments is cost. The problem is that the profit margin just isn't enough to justify a change in methodologies. Why on earth would ISPs want to turn themselves into banks to (effectively) kill off the advertising market? Is there really that much money to be had there?

Sure, as part of the eventual change to a Blade-Runner all-electronic dystopian n' shit virtual economy, something like that will happen, but that's probably 20 years off, at a bare minimum. We'll probably get economical flying cars first.

Off to XP land again: the only useful functionality changes are packet forwarding/bridging and the included firewall. The only UI change is that it looks much nicer; I didn't see anything even as remotely innovative as "Send To," added back with 95.

As near as I can tell, everything you want to do today on a 95 box will take just as long on XP, and the actual sequence of actions will be almost exactly the same.

About micropayments, I saw that for the NY Times archives they have a way of extracting only $0.80 from you. If these sites that advocate micropayments really want to get behind fee-based content, they should look into this. Charge $0.80 for a month's access, which is a little less than $10 for an entire year.

If they can't get their fans to go for that kind of minimal payment in numbers, then they won't go for nickel and dime payments either.

However, I suspect that none of them want to charge because they fear that people won't pay. I think that even if they charged just a nickel, 95% of their readers would shrug and go somewhere else.

>>"And when account settings are set up correctly, parents won't have to worry about whether their Quicken files will survive their children's next round of Quake."
>Yes, playing Quake destroys data. Jesus, why do they even write shit like this?

Man, that's embarrassing. There's almost no point in reading anything further written by that guy, since he clearly is an unredeemable moron.

I'm anti-XP to date, largely because I find the registration system intrusive, and therefore inherently offensive, and also potentially problematic if it doesn't work as intended. I see no value, whatsoever, in XP. Even the much touted stability of an NT environment is irrelevant -- as Mark stated, buggy programs will crash (although they won't require you to reboot as frequently). I've never encountered any stability problems in Win9x in any event -- provided you're not short on memory or running dozens of unnecessary applications at once.

But I really find it hard to believe that the "multiple" log-in feature is useful to anyone other than the smallest fractions of the user base. Who the hell has multiple people "logging in" to a computer? Not offices. I've never heard of anyone doing that at home.

It's great that Microsoft continues to improve its OS, but it's annoying how most of the previews of XP (especially the ones linked to here), just read like badly paraphrasized copies of Microsoft's PR publications.

I find it interesting that Jeff cited the move from Windows 3.1 to 95.

I moved to 95 because games began requiring it. I agree it's better than 3.1. XP may be better than 98/Me, but I'm not moving until I have to. Something tells me MS will come out with something better than XP before I have to. And something else tells me that will take maybe a year or two before XP becomes "obsolete."

I'm not saying what that "something" is, because it lives in my head and is easily angered.

-Andrew

I'm sure XP is an improvement, but Microsoft has flooded the market with OS product over the last few years. If XP was around the corner, why did they put out ME? 2000 I can see as a new iteration of NT, but why put out ME and then a year later put out XP and expect people to pay $100 again for an upgrade? I'm just tired of it. I want MS to show me dramatic improvement if they want me to open my wallet again. And yeah, the registration thing really bugs me too. It's their right to have it, but it's my option to say, "I'll pass."

I know that over the long haul Microsoft and other software makers have some problems, because the natural evolution of their software means that it begins to reach a point where new versions have fewer and fewer real updates that make a difference. Guess what? That's their problem, not mine. I'm still using Office 97 nearly five years after it was released and as far as I can tell, I'm just as productive as anyone using a later version of Office.

You see how much they want for an upgrade to Office XP? Over $200! That's a Gamecube or a new GeForce 2. Why would I want to spend that kind of money for Office? What the hell's in there that warrants that kind of money?

The PC Magazine article listed 2GB of free hard drive space as one of the minimum system requirements. You've got to be kidding me! Is it that big because it's derived from Windows 2000?

Why in the world should my operating system go from taking up 3.5% of my hdd to 20%?! (My C: partition is 10Gb and I'm using 98SE)

That's a good question about the drive space. I wonder if it's all the multimedia stuff they're building in?

Just thought of a new wrinkle re micropayments.

Quote: "About micropayments, I saw that for the NY Times archives they have a way of extracting only $0.80 from you."

0.80 *american*.

Yes, the majority (for arguements sake) of internet users are american. But what of international readers? For instance, at the moment that's approx $1.60 australian, ignoring the exchange rate charges. And if the exchange rate changes between debits (which it will), to the average international person, the cost to subscribe to a website will fluctuate. Bad luck if the bill comes due on a bad day on (your) local stock exchange.

Here's some updated bandwidth costs for you guys to chew on.

http://www.dialtoneinternet.com/prodandserv/managedservices/bandwidth.html

WRT westyx's post, remember that hardware is getting cheaper (in fact, dramatically so) every year, in every metric we can measure-- CPU speed, hard drive space, memory size, you name it. I do believe the Google approach (use lots of cheap, easily replaceable machines) can scale to this type of distributed transaction application. Relative to the other costs you have, hardware really is essentially free.

Speaking of expenses. Labor. With the right expertise and design you won't need a lot of people to run your massively distributed system, thus cutting the cost of labor a lot. That's why I brought up Google-- only 60 employees. Labor is expensive and needs to be cut out of the equation as much as possible. Why? Talk to your local ATM.

The real challenge is not in building the micropayment clearinghouse, IMO. It's getting the ISPs on board.

Anyway, there's no point in me defending a system that doesn't even exist... but I _hope_ I've at least partially convinced some of you that a micropayment system _is_ indeed possible, even today. Whether it is likely or not is another story, because of the disparate groups that have to work together to make it happen (namely, ISPs).

And for the last time, Mark-- nobody would charge a nickel for an article. Micropayments start at one cent and go down from there. As long as you're covering the 10% fees (let's be generous) plus your bandwidth costs (roughly one-half cent per MEGABYTE), your income is commensurate with your hits. One cent for an article would easily cover this.

"The only UI change is that it looks much nicer; I didn't see anything even as remotely innovative as "Send To," added back with 95."

Hmm, I see at least a dozen I consider essential. First of all, combining windows that have similar titles in the taskbar-- eg, no more 5 instances of explorer taking up 5 slots in the taskbar. Also, the most frequently used applications appearing on the start menu is a godsend (previously it was just documents). Just a few examples.

Also, for equal time

http://www.penny-arcade.com/view.php3?date=2001-06-22

Although, you'll note that I do give specifics about how I think micropayments COULD work in my messages.

Fairies and baskets would be neat though. I say make 'em topless while we're at it.

Interesting editorial on http://www.storagereview.com --

"The Internet industry is changing. Unfortunately, due to the fault of advertisers, publishers, and readers alike, the ubiquitous banner system that supported a �free Internet� is failing. Allow us to use SR as an example� its only discretion that compels us to leave out actual figures. Over the period of 1/1/2001 � 5/19/2001 (i.e., one day before the launch of this Seagate campaign), our advertising revenue has slid 90%. We were not wealthy by any means before. Imagine where we stand now."

"Believe it or not, I empathize with the reader perspective. Pop-ups and other unconventional forms of advertising are intrusive. Some readers may believe that a threat such as �lose the pop-up, else lose me� is one that will restrain our course to one they deem acceptable. Though the prospect of losing readers pains us, such a view is unrealistic. The fact is that the amount of readers we have is �irrelevant- if our income plummets towards zero. Every page view by every reader costs SR money. Right now gross revenue barely covers this cost, let alone the 80+ weekly man-hours of labor outlined above."

Do read the rest, as it's very interesting.

My question is this: when will internet advertising rebound, and how much? My personal feelings are "no time soon, and not very much".

Eg, why do we need micropayments? Because the current system isn't working, folks. Unless chet has some amazing plan to make all his sites profitable that he hasn't shared with us.

"And for the last time, Mark-- nobody would charge a nickel for an article. Micropayments start at one cent and go down from there. As long as you're covering the 10% fees (let's be generous) plus your bandwidth costs (roughly one-half cent per MEGABYTE), your income is commensurate with your hits. One cent for an article would easily cover this."

Well, a penny an article would squeeze out most small sites. Remember the economies of scale work both ways. You only make money when you get a lot of readers at a penny per. I don't know of any gaming sites besides Gamespot that get as many as 100,000 readers a day. The MMOG EQ site I know of, which is one of the most successful ones, gets about 60,000 readers a day. At a penny per reader, that's $600 a day *before* the ISP and clearinghouse take their cut. Let's say they keep 80% of that penny, so that leaves them with $480 a day. That's a little under $15,000 a month. Their bandwidth costs are about $5000 a month. I have no idea what their equipment costs are but they do have to budget for travel since they cover EQ events and go to E3. They had five full-time people working there before the ad money disappeared. You can do the math. There's not a lot of give in the numbers.

Let me put it another way. Getting 10,000 readers to pay a penny for a story nets the site less than $100, which isn't a living wage for a writer. It won't mean dick for small sites, in other words. It will be the mega sites that will flourish.

"My question is this: when will internet advertising rebound, and how much? My personal feelings are "no time soon, and not very much"."

Doubleclick thinks it will improve starting with the middle of next year. It probably won't ever be what it was because the ads were overpriced, IMO.

Wumpuss - simple bet. $50.00. In three years micropayments will be no further along then they are now. We can make it 5 if you really want. 5 years, no one will be charging sub penny prices for content. Its no longer worth trying to show all the flaws in your idea, it would be a smaller task to count all the hairs on my ass without a mirror.

Chet
PS. Ask lumthemad about cheapo bandwidth prices - you get what you pay for.

Does anyone still talk about Operation Flashpoint: the GAME? :) Is anyone playing the European version? Is it any fun? etc.?

start another thread, Geo.

it always happens: topic starts, morphs into something else. kinda cool that there's so much stuff people like to talk about and all, but troublesome to me to have to wade through all the crap to get to something that might vaguely be of interest to me. :)

- mike - another in a line of 2c micropayments, collect them all! -

"Let me put it another way. Getting 10,000 readers to pay a penny for a story nets the site less than $100, which isn't a living wage for a writer. It won't mean dick for small sites, in other words. It will be the mega sites that will flourish."

1. It's going to be that way, regardless. In the early 1920s there were also dozens of auto manufacturers. Now there are, what.. three?

2. At least this way you can cover your costs for small sites, so they CAN survive.

3. The advertising model ALSO requires a certain number of hits/impressions. Ads might even be paid on click-through which is dismally low.

Micropayments really are superior to the ad model, no matter how you slice and dice the economics.

"Wumpuss - simple bet. $50.00. In three years micropayments will be no further along then they are now. We can make it 5 if you really want. 5 years, no one will be charging sub penny prices for content."

Okay, you're on. I will make it 5 years though. I've said over and over that this isn't an overnight phenomenon, due to the number of groups that have to work together.

http://www.millicent.com/faq/index.html

"1. It's going to be that way, regardless. In the early 1920s there were also dozens of auto manufacturers. Now there are, what.. three?"

So micropayments aren't a boon for small sites, as you claimed? Micropayments only make money when they're scaled up into the hundreds of thousands of penny payments. You want to see the website equivalent of three auto manufacturers producing content for the web?

I don't really understand what you're arguing for anymore. If the cost of reading an article really does fix at a penny or less, then small sites might as well give up any notion of being profitable. Only the huge websites will make money selling content at a penny an article. Why is this superior to an advertising model? Why is this something you want to see?

Why do I have a strange feeling that wumpus will not be in Chet's radar 5 years hence? I mean, wumpus is mind-crushingly tiresome NOW, how can anyone expect to be able to continue counting ass hairs for FIVE MORE YEARS without losing his sanity?

Oh good! Anonymouse rears his unimpeachable credibility yet again! :)

Misspelling intended.

I too am curious about the Operation Flashpoint game. Even moreso, amazingly enough, than the mindnumbingly boring discussion of micropayments.

Anyone played it? Kafka? Did you buy the Euro version?

Lando: How come you keep picking on me? You have hurt me.

CompuExpert has sold out of the import version, BTW. Dammit, I was just about to give in to. :( No word on when they'll have it in stock again. I might get Independence War 2 import version instead. Just so I can say that I'm "having an import" and sort of sneer in a snobby fashion. :)

I picked up I-War2. Amazing graphics. Some frustrating missions but pirating ships at lagrange points can be fun and a real thrill when you know you can't save until you get back to your base. Do you risk hitting that corporate transport filled with nice booty even though it has 4 interceptors guarding it? My advice would be no unless you like a particle beam sandwich. :)

The game does seem fairly linear for all of it's vastness. From what I have seen it is pretty much waylay cargo ships or follow the story arc. You aren't going to find Elite here unfortunately.

Overall though I like it quite a bit.

Actually, let me expound on the graphics of I-War2 a bit. They are drop dead gorgeous by far the best I have ever seen in a game ever. Amazing just doesn't fully describe them.

---

Quote:

Lando: How come you keep picking on me? You have hurt me.

---

"Sign your dad's name."

Or sign someone else's Dad's name.

Sorry, couldn't help it.

My suggestion for getting around Compuexpert, which supposedly "lost" my order:

Go to Canada. They have a ton of copies! Sorry about the travel costs.

-Rob

You'd think maybe Mark or Tom would get rid of the 'Post as "Anonymous"' checkbox at the bottom of the form. Then again, maybe it's a Discus thing.

- Alan

No problem, Rob. Just let it be known to all - my dad wouldn't be caught dead around here!! And, from now on, anyone claiming to be my dad will be asked their first name, and since none of you know that my dad's name is Larry, none of you will be able to impersonate him further! HA!

And, hey, if they don't have it in Canada, I hear that there are plenty of copies over in Europe, too, so just catch a flight over there!! AA flight 106 leaves at 9:35 in the morning, it can have you in London by ten (their time), so what are you waiting for??

---

Quote:

Then again, maybe it's a Discus thing.

---

Well, I'm not the anonymous who said my credibility was unimsomething. So there!

So, you're saying you don't have unimpeachable credibility? Are you lying to us then?

Can you be trusted?

Sorry, I'm having quite a bit of fun -- it seems the only thing I do anymore on the QtT boards is taunt anonymous posters. Very entertaining for me, and I'm sure very annoying for everyone else.

=)

Maybe Mark or Tom will ban me. That'd be fun.

Unless we force people to register for board access, there's no way to make anyone use the same name twice so removing the Anonymous checkbox wouldn't accomplish anything.

I'm not interested in making people register because I don't like doing it myself. We've had nearly 12,000 posts to the board and there's just been a few that have been objectionable, and I'm not counting any recent ones in that category.

If people abuse the board we'll blow up that bridge when we come to it. Until then neither Tom nor I want to be policemen. In fact, I can safely say that we won't ever be board police. I might remove an offensive post -- I'm not saying I wouldn't exercise that power -- but if it gets to be something that I have to do with greater and greater frequency, well, that's not a good thing.

Let me reiterate that I don't really see any pervasive problems with the messages, though.

Ah, heck, I'll agree -- I don't think this board has near the problems that some others have. Let me say again, I'm just having fun berating anonymous posters. It's nothing personal, it's just me in my own little world.

Feel free to come to Little Rock or send Guido and set me straight.

Hey, what's da problem? Youz guys got problems? I takes cares of problems. For a fee. Capiche?

http://www.technews.com/news/01/168403.html

A little X-10 news that's surprising. I am a popup; hear me roar! Or not.

How is it surprising?
The article says:
A: they got their name out there effectively.
B: They are unsuccessful.

In marketing terms, A is then a complete success. Pop-unders = brand recognition. Now, B is mostly due to a complete lack of demand for spycams. But no amount of brand recognition is going to change that.

-Andrew

You'd have to ask the people selling the cameras if they're unsuccessful. The article seemed to indicate that, but there wasn't much data produced to support success or failure other than an independant auditing firm's statement that clickthrus to an area where secure transactions can take place were minimal. I thought the article was a bit incomplete -- where was a statement from the X-10 Camera company about the success or failure of the campaign, even if it was a "no comment"?

What you'd really need to know is the cost of the pop under advertising campaign, how much camera sales have increased, and what kind of price tag you can put on increased brand awareness. It could be that there's an 800 number on the website to order the camera, or instructions for mailing a check to order, etc.

I just checked -- there is an 800 number to call to order the camera, so I'd suspect a lot sales are done that way, if not most.

The campaign's been running for several months now. That would seem to indicate some level of success. Heck, after visiting the website I was intrigued by the camera. They have a package you can add that will transmit the images to your PC, which then will allow you to access the video feed from any PC with Internet access.

I have one of the x-10 cameras and it is pretty cool. I got it to keep an eye on our dog (via a private website) when my wife was planning on going back to work. Since she hasn't gone back to work it is collecting dust now. Since it is wireless you can put it anywhere you can plug it in. I never got to get it integrated with a web server but I hear it is not very difficult.

-- Xaroc