[pauleastlund]

What is a page view on an article worth these days? A couple cents? Less? If the micropayments implementation was right, and if paying for content became a more mainstream idea, I don't think you'd feel that you "[could] read but [couldn't] share" an article just because it charged a nickel to continue past the intro paragraph. I don't see how that would break hyperlinks.

[sk8ingdom]

The problem with this model is that the mental transaction (do I care enough to pay for this) is more expensive than the couple of cents it costs for access.

A similar problem exists when trying to decide to pay for an article from a journal you don't have access to. Is the abstract compelling enough for me to fork out $100 dollars for this article? What if the abstract was misleading? Can I return it?

As a consumer, I'd rather just pay a higher flat fee for internet access / browsing and have that collective wealth distributed to content providers based on some metrics. Better content gets bigger portion of the pie. The problem is probably determining the metrics.

[cwyers]

Behavior economics suggests that you're wrong[1]. Users do not like metered useage even when it benefits them. An anecdotal illustration of this at work:

> What was the biggest complaint of AOL users? Not the widely mocked and irritating blue bar that appeared when members downloaded information. Not the frequent unsolicited junk e-mail. Not dropped connections. Their overwhelming gripe: the ticking clock. Users didn’t want to pay by the hour anymore. ... Case had heard from one AOL member who insisted that she was being cheated by AOL’s hourly rate pricing. When he checked her average monthly usage, he found that she would be paying AOL more under the flat-rate price of $19.95. When Case informed the user of that fact, her reaction was immediate. ‘I don’t care,’ she told an incredulous Case. ’I am being cheated by you.’

The transactional friction between "free" and "not free" is high, even for very small values of "not free." This has been backed up by experiments[2]:

> In his book Predictably Irrational, Ariely describes a series of simple experiments that offered subjects something desirable – chocolate – at a variety of prices. Two types of chocolate were used – a Hershey’s kiss and a Lindt chocolate truffle. While the kiss is an inexpensive and common treat, a Lindt truffle is a far more tasty confection that costs an order of magnitude more than the kiss.

> The first experiment offered subjects a truffle for 15 cents (about half its actual cost) or a kiss for 1 cent. Nearly three out of four subjects chose the truffle, which seems logical enough based on the relative value of the offers.

> The next experiment reduced the price of each product by one cent – the truffle was offered at 14 cents, and the kiss was free. Although the price differential remained the same, the behavior of the subjects changed dramatically: more than two thirds of the subjects chose the free chocolate kiss over the bargain-priced truffle.

It's not about getting the right micropayment system, it's about overcoming something about how humans understand and deal with price signals. You can either sit around trying to rewire people or you can come up with a business model designed for people. Micropayments as a business model for web content is wishcasting.

1) http://www.dtc.umn.edu/~odlyzko/doc/case.against.micropaymen... 2) http://www.neurosciencemarketing.com/blog/articles/the-power...

[maxerickson]

The Case anecdote doesn't address her desired usage (at least not as presented in the pdf). Maybe she ends up using the service a great deal more at the flat rate, with it's significantly lower marginal price.

It'd be nice if it laid out her perception of what would be fair (we have roughly one data point, that the hourly rate at the time the conversation happened is unfair) and what the economics looked like for AOL (perhaps they could have substantially reduced the hourly price but were good at math and figured that a flat rate was the more profitable path).

[cwyers]

The flat rate would have been a guaranteed higher monthly bill that what she was paying at the time, for as you point out potentially higher usage. But if her desired price to pay was $20, and her average monthly bill was n, where n is below $20, why wasn't she already using the service more, at the rate of $20-n?

And, again, the AOL anecdote was an illustration, not evidence. See the truffle study, we know more about this than your response suggests.

[maxerickson]

Her stated reason was that the hourly price was unfair. This suggests that it was a couple dollars an hour:

http://ask.metafilter.com/101477/Cost-of-the-intertubes-a-de...

So we have an anecdote about marginal pricing going from $1 or $2 (or more) to $0 being used as an illustration that people don't like metering.

If AOL had costs of $0.20 an hour, her perception that their pricing was a ripoff probably wasn't ridiculous.

(I'm not trying to refute you, I was making the perhaps not very useful argument that the anecdote was not a good illustration, because it left too many loose ends. It's compelling because AOL is famous and her behavior is easy to cast as ridiculous, but it wouldn't be real surprising if it was told in a way that was useful to AOL.)