Friday, September 05, 2003

Clay Shirky is always good. A new essay on micropayments

Some quotes:

...The fame vs fortune choice matters because of substitutability, the willingness to accept one thing as a substitute for another. Substitutability is neutralized in perfect markets. For example, if someone has even a slight preference for Pepsi over Coke, and if both are always equally available in all situations, that person will never drink a Coke, despite being only mildly biased.

The soft-drink market is not perfect, but the Web comes awfully close: If InstaPundit and Samizdata are both equally easy to get to, the relative traffic to the sites will always match audience preference. But were InstaPundit to become less easy to get to, Samizdata would become a more palatable substitute. Any barrier erodes the user's preferences, and raises their willingness to substitute one thing for another.

This is made worse by the asymmetry between the author's motivation and the reader's. While the author has one particular thing they want to write, the reader is usually willing to read anything interesting or relevant to their interests. Though each piece of written material is unique, the universe of possible choices for any given reader is so vast that uniqueness is not a rare quality. Thus any barrier to a particular piece of content (even, as the usability people will tell you, making it one click further away) will deflect at least some potential readers... [ed - italics added for emphasis]

I am inclined to believe Clay when it comes to these matters. Even recent experiences and adventures in RSS land show this to be true. Joshua Marshall used to have a bad RSS feed. I stopped reading him because my aggregator would not deliver the content. I am reading Lileks only sporadically, even though his writing is beyond excellent, because he does not have an XML feed that works. As soon as a magazine puts its content behind a pay-per-read wall, I stop using it. So, I will concede that one-time micropayments do not really work, especially for content. It is not even an issue of the mental transaction as much as the inbility to know whether the content I have not yet consumed is going to be worth it. Would I pay $0.10/month to read Lileks as a recurrent monthly payment? Probably. What about Marshall? Perhaps. Would I pay a $1/month to have access to NYT online? Sure. The trick here is that while these transactions are more or less tiny, I would be grouping them into a larger category that will add up for me. Does that lower each transaction cost? I am not sure, but I do know that I am more likely to then sign-up with some syndicator -- similar to NewsIsFree -- which would give me access to all sources I care about for some monthly fee that is well beyond 25 cents. I already have one for TV - it's my cable company.


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