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760Re: [decentralization] Pricing and micropayments

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  • Clay Shirky
    Dec 1, 2000
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      > 1.User clicks on a link
      >
      > 2.Popup says "You will be charged $0.15 to access this
      > site for one month, starting today"
      >
      > 3.User agrees

      Interestingly, steps 1-3 work now, and generate revenue in the
      hundreds of millions of dollars annually for the pornography industry.

      "If you want access for a month to 'Frothing Sex Weasels', enter your
      CC#/Pr0n-Pass ID<tm> here..."

      Note that because the porn sites use no infrastructure not available
      to the industry at large, a possible conclusion is that everyone
      charges what the market will bear. For FrothingSexWeasel.com, that's
      $19.95 a month, and for C|Net its bupkis.

      Note also that the argument that there isn't a financial
      infrastructure to process $0.15 transactions doesn't affect sites'
      ability to aggregate weekly subscriptinos into montly ones etc etc.
      There is enough infrastructure in place to process $1+ transactions
      (i.e. the annualized equivalent of 8.5 cents a month), and if users
      wanted to use those systems QPass would have a jillion dollar market
      cap.

      > 4.Charge is added to his ISP bill (ISP receives some
      > sort of payment for hosting the charge)

      Watch Deutsch Telecom and Nokia. Both are making huge plays in the
      "You don't need a credit card, you can just bill it back to your phone
      bill" plays.

      This is irrelevant to the micropayment conversation, of course, but
      its going to be an interesting fight if you like watching financial
      infrastructure battles.

      > 5.If applicable, email reminder sent 3 days before
      > access is lost to remind user to renew

      You wouldn't last 5 minutes as a marketing director.

      One of the reasons micropayments have historically failed relative to
      the competition is that the competition knows enough to adopt the Ron
      Popeil "Just set it and forget it" model -- sign up now, and let us
      know if you ever want to opt *out* of the system, otehrwise we will
      continue bleeding you for $4.95 a month unto the 4th and 5th
      generation.

      --
      Clay Shirky | Essays on the Internet
      http://www.shirky.com/writings/what_is_p2p.html | What is P2P?
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