Micropayments for content Seth’s Blog

It’s a problem that comes up every year or two, but no one has yet implemented a workable solution.

Advertising is a surprisingly bad way to pay for content for a culture, because the kind of content that is rewarded is often untargeted for a large audience or optimized for people interested in buying something profitable.

It’s also inefficient, because advertisers can’t know in advance what’s going to work, and manufacturers get very little of the ad spend.

An alternative is to pay for what you get, the way we treat carrots, baseballs, and clarinets. Instead of buying a baseball, you’re buying a chance to watch a video.

Micropayments are a system where you pay a penny or a nickel or a dollar for a piece of content.

This introduces two types of friction, though:

1. There needs to be a technical system that can efficiently move small amounts of money around.
2. As a reader/consumer of content, you must constantly decide what is “worth it”.

About thirty years ago, I described a simple solution to both problems:

For $25 you can buy a content passport. It is available for purchase on any website that is part of the content network, and you need one to read the content on their site. The site that sells it to you gets a $10 commission for selling it to you.

It keeps track of every member site you visit (it’s really simple now, with a cookie). And then the system coordinator, on a percentage basis, allocates $10 to the sites you visit. Whether you visit one site or thousands, it’s going to go somewhere. No friction, because it’s a buffet, just as it is now. Read what you want, no ads, no hassle.

The sites with the most visits receive the highest total amount from the monthly distribution of royalties

Each site has an incentive to sell a lot of passports (commission is significant) and the coordinator of the network is also earning 25%.

It’s really clear who the customer (reader) is and it’s easy to join any site’s network. Aligned incentives, a simple and resilient solution.

Rejoice. (PS this is not related to yesterday’s post about federation, just a coincidence.)