The following is a response to Clay Shirky's new article Fame versus Fortune (a follow-up to his 2000 essay The Case Against Micropayments) which takes aim at the 9-week-old BitPass payment system. I'm a long-time advocate of micropayments, an advisor to BitPass, and my online comic The Right Number is mentioned in his first paragraph, so I'm hardly a disinterested party. Still, I hope my arguments will help illuminate why I think that Shirky's logic is flawed, and why his caricature of the idea of micropayments bears little resemblance to the reality being created right now.
Micropayments are making the rounds of the Internet once again, and I'm still not sure on their viability. The arguments I've seen always seem to miss the Google Problem (the arguments I made then still stand up now—Google alone hit this journal about 4,000 times this month so far). And let's face it, without a search engine spidering your site, you are going to have a hard time getting people to your site without major advertising (another fact—Google sent about 2,200 people to this site this month).
But there is still that nagging notion of “pay-as-you-play” argument against micropayments. Since I run my own proxy webserver here at the Facility in the Middle of Nowhere (and I'm the only one who actually uses the darned thing) I can get a fell for how much I might have to pay of I actually had to pay for each hit I generated; averaged over the past quarter (since I have logs going back 91 days).
Certainly not in the $40 a Day catagory but it still is a good amount though (and this just counting HTML pages—no images, movies, songs, etc). I'm not claiming to be your average web surfer, but for me, “pay-as-you-play” would definitely cause me to change my surfing habits (which may give you an indication of just how much I surf the web in a day—eeek!).
There were also some arguments about micropayments in this MetaFilter thread some pretty good, some not so good. One interesting argument stated: “if micropayments could be made to work, the porn industry would have already done it.” Well, they have. I've seen some porn sites selling images for as low as 1¢ per image. So it is being tried even in the porn industry (you just have to know where to look—ahem).
The trick, then, seems to be to have enough free content (or samples) to bring people to your site and hopefully entice them enough so they “play-as-they-play” around your site, either offering premium content, or perhaps timely content (like stock feeds—you can get 15-minute delayed feeds for free but real time costs).