[dredmorbius]

Multiple reasons, though many boil down to Gresham's Law or similar: it's difficult to assess the quality of information, particularly when disaggregated. Most media advances have occurred through bundling rather than unbundling options: magazines, books (collected parchments, monthly serials), subscriptions. Even advertising-supported broadcast and Web models work by aggregating product, though in this case, eyeballs sold to advertisers.

See:

"Why Information Goods and Markets are a Poor Match" https://www.reddit.com/r/dredmorbius/comments/2vm2da/why_inf...

Nick Szabo: "The Mental Accounting Barrier to Micropayments" http://szabo.best.vwh.net/micropayments.html

Jacob Nielsen tries to make the opposite case. He's wrong. "The Case For Micropayments" http://www.nngroup.com/articles/the-case-for-micropayments/

I see a mix of some advertising, patronage, and a content syndication system similar to the existing performance payment model for music (broadcast, commercial establishment use) via ASCAP and the Harry Fox agency as most likely: https://www.reddit.com/r/dredmorbius/comments/1uotb3/a_modes...

See Phil Hunt's UK proposal: "A broadband tax for the UK?" http://cabalamat.wordpress.com/2009/01/27/a-broadband-tax-fo...

[e12e]

With apologies for not reading all the references you list before asking:

> it's difficult to assess the quality of information, particularly when disaggregated.

Do you mean that it's difficult in general, or in terms of "should I buy this"? I could see micropayments work similar to Kindle - a 24 hour no-questions, semi-automatic refund policy. Don't think that article was worth 50 cent? Just "unpay" for it.

[dredmorbius]

It's difficult for a number of reasons, which I spell out in the essay you've failed to read:

Market mechanisms work best where goods are uniform (either individually or on aggregate average), their qualities are readily determined (or again tend to average out well), where the fixed costs of production are low and marginal costs of production high (relative to one another), and externalities, both positive and negative, are small relative to market price.

Information goods violate virtually all these assumptions.

● Quality is highly variable.

● Quality assessment is difficult, and often frustrated by other factors (e.g., pay-to-publish journals, "friendly" colleague peer reviews, discussed recently by Joerg Fliege at The Other Place).

● Quality isn't, and often cannot, be known in advance.

● Variance of individual instances is high enough that averages rarely suffice.

● Fixed costs of production are high, particularly for research, also to an extent for selection, review, and editing.

● Variable costs of production (e.g., publication) are low. In fact we're utilizing a system which was specifically created to reduce those costs still further, Tim Berners-Lee's World Wide Web, developed to transmit physics papers between CERN, SLAC, and other related facilities.

● Information goods typically have very high positive externalities -- they benefit those who don't directly consume them. Occasionally they have high negative externalities -- e.g., smallpox, "superflu", or weapons research.

There's the question of what does a content payment scheme provide? Of which the answer is, generally, "an incentive to create content". What matters isn't whether or not each individual information trasnfer is equitably priced, but whether, at some reasonable interval (e.g., at years' end) you've got sufficient compensation for authors, researchers, reporters, etc., to provide an adequate supply of information and entertainment.

When distribution was on physical media, printing and transactional sales were reasonably appropriate. With the price of reproduction* approaching zero, but nonzero fixed costs of production, there's an inherent conflict in the mechanisms which allow for price discovery in markets.

[e12e]

Right. But it's easy, after reading an article,to decide: this was interesting: I don't need my quarter/dollar back?

Granted most posts are crap, and also probably most of the stuff that's worth a quarter to some are not worth it to most. But publicatuon is free - if one million people doesn't pay for your book, that's fine if 5000 pays an average of 20 USD for it?

[dredmorbius]

Consider two schemes for payment of content.

A: You must decide, for each piece of data or information you consume, whether and how much it is worth to you. I'll note that in this discussion, not only did you not pay to read a work, but you couldn't even be bothered to click a link to examine it. Which, actually, I applaud as a rational behavior: the odds of being rewarded with quality content by following an arbitrary link posted on an Internet discussion site by someone who's preferred description is "space alien cat" is fairly low.

But it also rather handily demonstrates the specific failure mode of micropayments.

B: Information is paid out of a general cultural tax, apportioned by wealth or income. You may access as much (or as little) of the availed information as you choose. Creators are paid according to the access and performance of their works, tracked by one or more monitoring services.

Under the first scheme, there are numerous issues: the rich and poor have vastly different information access, as do children. Researchers who might reference many works (though often only in brief fragments) would have tremendous data charges, as might musicians or authors or photographsers, who typically have large reference libraries of relevant works. Those who don't directly consume information but benefit by its effects on society as a whole pay nothing. Remixes of works would be difficult to arrange given complex rights negotiations.

Under the second scheme, there's no concern at the time of access whether or not the work is worth paying for (though in circumstances where you're accessing physical resources or premeses: a book, a recording, a performance venue) you would still typically pay. Children and the poor would have as much access as any other. Researchers and artists could reference works as needed without concern as to cost. Remixes of works would be straightforward. Payment would be made regularly throughout the year.

At first blush, scheme A describes what we have today, and scheme B is a utopian broadband tax / content syndication scheme. Actually, this is entirely backwards: scheme B is largely the system we have in place today, except that instead of a government-imposed tax, it's one based on advertisers and paid through higher prices for goods purchased regularly throughout the year. Total advertising spending in the United States is $181 billion per year -- $567 per person in 2014.[1] Artists are paid through either ratings-based metrics for music, or according to negotiated television contracts for actors, screenwriters, and such. There's one key difference though: under an advertising-based system, it's ultimately the advertiser who calls the shots on content, and content is geared to maximise advertising-based appeal. This shapes both the types of works produced and the topics covered.

A broadband tax approach changes one element of this: how revenues are collected. It's either through an access provider (your ISP, cable, or broadband service), or through a public tax imposed independently. Allocate some or all of the $567 per-person advertising cost presently collected, and it would be transferred directly to authors, composers, musicians, actors, reporters, researchers, etc. Without the advertising middleman.

Your micropayments scheme requires a middleman and payment processor, trusted by both crators and consumers, some way of providing for refunds, and the somewhat problematic issue that there are limited capabilities to suck out any information you might have acquired but decided after the fact that you weren't interested in actually paying for. At least, without inflicting possible brain damage. How do I keep you from copying my book, or music, or photos, or movie?

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Notes:

1. US Advertising!spend!statisics: http://galbithink.org/ad-spending.htm

http://carisesuatu.loomhost.com/cari/Annual_Advertising_Spen...

http://www.prnewswire.com/news-releases/the-united-states-to...

[e12e]

First, I didn't realize the first link was by you - I did read it prior to my previous response.

I think you overestimate the complexity of refundable (for "regret" reasons) micropayments. Both Amazon and Google play handle this fine.

I don't see why one would need to go back and get a refund for a quarter or dollar spent weeks ago; have a "pay to access - refunds as wanted (imediatly) after reading. In essence keep payments un escrow for 24-48 hours; with buyer opt-out.

> How do I keep you from copying my book, or music, or photos, or movie?

Why would you care? Go after systematic/for-profit copyright breach through the legal system - enjoy the rest as free publucity? If a link to pay could be embedded (eg: a pay:<content-hash> url scheme - it might be easy (enough) for readers (both in the people sense and application sende) to opt-in to paying. Register the hash in your library when you've decided to pay or refund; have the app commit to paying based on the list that's maintained in your account. The account could be with a payment broker, like itunes/amazon/google - or just a file. In case of a file you'd need to have the/an app look up the hash and follow some instructions for payment.

Your concerns wrt monitoring are valid; but not sure they're worse than what we seem to be moving towards.

[ed: re failure of micropayments - wouldn't someone not buying/paying for something they do not want be a win for micropayments? This would be similar for ads anyway? No view; no ad revenue?

But with ads, I can't get back my "ad view". If I read something (or started to) - and realised this isn't interesting - I could "unspend" a micropayment - let those that like content support it - but stop rewarding "eyeballs". Because that seems like a terrible quality measure (or measure of value-add/price).]

[dredmorbius]

I can't get back my "ad view".

Irrelevant.

That's not the payment transaction. You are not paying for content with ad views. You're paying when you buy products and services which advertise online.

Why would you care?

Because unlimited recourse to view, then withdraw payment, torpedoes the system.

You've also got the matter that under a syndication system, all views are retail views, regardless of source. Where advertising promotes piracy schemes benefitting publishers at the expense of authors, a Syndication scheme would fairly benefit both.

A "net traffic" based system would eliminate this concern: it simply doesn't matter where your work is served from, so long1as it's served. And no, it's not necessary to measure via privacy-invading mechanisms:

1. Zipf power functions mean that a small number of major sites are the bulk of traffic. You monitor these.

2. You're concerned with served traffic volumes. Other than eliminating suspect traffic, it doesn't matter who is accessing content, only how many. Yes, you've got a views-inflation issue to deal with, there are methods for mitigating that.

3. Sampled traffic estimates are used to model total traffic. That's apportioned across total funds for apportionment.

There's probably going to be some level of bundling, and it may be that specific creators market through specific syndicates, rather than directly. But in general, you're going to end up with payment based on actual access and funded through an indirect, general, tax or fee.

Google and Amazon serve only specific markets. There are large parts of the world with some Internet access but limited payment or finance systems. Credit card fraud is a thing, $11.3 billion worldwide in 2012, up 15% from prior year, and breaches of credit and payment data details are running to the hundreds of millions if not billions[1]. Individually transactionalised online payments are a considerable risk. Ecommerce for all its touted benefits remains a modest fraction of total retail, favoured strongly in B2B space, that is, established relationships and regular transactions.

Also noted that you've failed to address access issues for the poor, children, researchers, and creatives themselves, all of which a general fee would cover.

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Notes:

1. "Skimming off the top" http://www.economist.com/news/finance-and-economics/21596547...

[bitcuration]

Yep, you pretty much explained why the "paid" web never took off the first place and free web dominated the world.

Ironically, in the media world, cable/network, both models of content distribution market existed, there is public station yet there is HBO. Why "HBO" never took place in the web world is a mystery.

[bitcuration]

When content was distributed via physical good, the manufacture served as the "value appraiser" to invest in the cost of manufacture. This surely functioned as the price discovery but not ideal as it acts on behalf of consumers.

When the distribution cost down to zero, the value appropriator has now changed to advertiser or marketing campaign organization, but in online world is mostly viral though mostly still driven by underground campaign, have replaced the physical media manufacture/distributor and become the new price appraiser.