Comment by ashdksnndck
11 days ago
Microtransactions are the perfect solution, if you have an economic theory that assumes near-zero transaction costs. Technology can achieve low technical costs, but the problem is the human cost of a transaction. The mental overhead of deciding whether I want to make a purchase to consume every piece of content, and whether I got ripped off, adds up, and makes microtransactions exhausting.
When someone on the internet tries to sell you something for a dollar, how often do you really take them up on it? How many microtransactions have you actually made? To problem with microtransactions is they discourage people from consuming your content. Which is silly, because the marginal cost of serving one reader or viewer is nearly zero.
The solution is bundling. I make a decision to pay once, then don’t pay any marginal costs on each bit of content. Revenue goes to creators proportionally based on what fraction of each user’s consumption went to them.
People feel hesitation toward paying for the bundle, but they only have to get over the hump once, not repeatedly for every single view.
Advertising-supported content is one kind of bundle, but in my opinion, it’s just as exhausting. The best version of bundling I’ve experienced are services like Spotify and YouTube Premium, where I pay a reasonable fixed monthly fee and in return get to consume many hours of entertainment. The main problems with those services are the middlemen who take half the money.
I disagree, bundling is the problem. That strategy created the fragmented landscape that we now see in streaming video, which is pretty much universally hated.
The ideal solution would involve a flat rate which I pay monthly, and at the end of the month that money goes towards the content that I consumed during that month. If I only read a single blog, they get all of it.
Then we build a culture around preferring to share content which is configured to cite its sources, and we discourage sharing anything which has an obvious source with which it doesn't share its inbound microtransactions.
We already need to do our due dilligence re: determining if an information source is trustworthy (and if its sources are trustworthy, and so on). Might as well make money flow along the same structures.
It's not an ideal solution because any fixed cost solution is begging for a middle man/reseller to be introduced.
Like I pay the $5 monthly flat fee (or $500, $5k, $500k, whatever it's known fixed cost for me) for the system, turn around and resell all content for a $1 monthly flat fee.
There is a real cost to the content you're consuming with that flat-fee. So either the flat fee is more of "credit" system or it's relying on a middle man to do the oversubscribing calculation/arbitrage or whatever to balance the cost.
And no, introducing any form of rate limits or "abuse reduction" doesn't work because it's basically changing your flat-fee into a credit based system.
A credit system has advantages over pure micropayment system (in terms of mental overload. I know I charged my "internet content" card with $50 for this month. A movie on Netflix is selling for $2 tonight. Normally it's $0.5 a movie, but it's Valentines and everyone is "Netflix and Chilling" so surge charging)
I suppose "credit system" is indeed more accurate than "fee", it's just that I personally would set it at a flat rate and then stop thinking about it, so it would feel like a sort of admission-to-the-internet to me.
As for bandwidth and storage costs... that could just be rolled into the same attribution/payment scheme. If content is not propagating well because too few people are hosting it, then I'm ok with allocating some space and bandwidth to help distribute it. I don't think there's anything wrong with that so long as when it gets viewed, the creators still get the bulk of the credit and I only get a teensy bit for the part I played in distributing it.
The goal would be to mostly decouple the attribution/payment handling from the data handling so that it's as simple as seeding a torrent and it's the players/clients/whatever that handles giving credit. If I notice that I've got a leacher problem (whether as a creator or as a distributor) then maybe I revoke trust in the leachers and they stop getting the content from me.
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I think the costs of serving digital content are so low that you don’t need to rely on oversubscription. The user can stream 24/7 and you would still make money (assuming you got the working IP payment model like YouTube does that divide up individual user revenue proportional to that user’s watch time - I think Spotify has a problem here). The only “anti abuse” you need is to enforce that the user only streams one thing at a time.
The problem with the credit system is that the user won’t like that they have to pay extra for the good stuff, the feeling of watching worse stuff to save money etc.
Given the marginal cost of distributing the good stuff is the same as the bad stuff, why make the customer feel bad about watching by adding an incremental cost? Just let it rip. If you have a lot of good stuff, customers will be willing to pay more for the bundle. Once they’re in the bundle, let them watch exactly what they want.
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So, Flattr 2.0 ?
https://www.ctrl.blog/entry/flattr2.html
More or less, yeah.
When it's all grown up though, I'd hope for more transparency into where the money is going. Suppose a journalist has risked life and limb to expose some important information and two news outlets publish stories about it. I don't want to pay the news outlets under the assumption that they'll then pay the journalist. Instead I want to decide which story to read based on whichever one triggers my client to compensate the journalist the most (because I care more about the investigative work than the writing, though other users might configure their clients differently).
> I disagree, bundling is the problem. That strategy created the fragmented landscape that we now see in streaming video, which is pretty much universally hated.
> The ideal solution would involve a flat rate which I pay monthly, and at the end of the month that money goes towards the content that I consumed during that month. If I only read a single blog, they get all of it.
You just described bundling - that’s how YouTube Premium works. I’m not sure what the distinction you are drawing is here. Is it the existence of multiple separate bundling services? If so, I agree that creates friction, but the solution is more bundling, ie. everything should be in the same bundle.
Btw I don’t hate the fragmentation of streaming that much. The value proposition for TV/movie consumption is the best it’s ever been. For what it used to cost to buy a single season of a TV show on DVD, I now get access to watch hundreds of shows on-demand. It would be even better if all the streaming services merged together, but antitrust law will probably prevent that.
I think what most people hate more is when the specific thing they want isn’t in the bundle - ie. paying $4 to watch one movie.
Yeah, everything in the same bundle is what I'm going for. Except it's not a bundle that is offered and gatekept by some platform, but rather one that emerges from the participation of users while they interact with each other or with artists.
Whether I received the content via a browser, over bittorrent, or on a USB stick should have no bearing on whether I'm able to
- reward its creators
- assess the content's trustworthiness based on whether I trust those creators
I want to have single subscription and then happy to pay extra $5 to watch an out of network show.
I feel streaming companies should offer some sort of content exchange for a fee so users wouldn’t have to switch platforms.
> the problem is the human cost of a transaction. The mental overhead of deciding whether I want to make a purchase to consume every piece of content […] > When someone on the internet tries to sell you something for a dollar, how often do you really take them up on it?
It depends on how micro they are. Your example of $1 is quite big. It should be cents or even less.
Several examples. When using chatgpt api, do you really worry how much a short q&a session will cost you? Do you stress whether to turn on the light in your room or not (electricity cost is also micro-transaction if you think about it)?
$1 is not a micro-transaction, it's just a regular transaction. It's not micro until it's only several cents at most.
I'm not the parent, but when I use the OpenAI API (not ChatGPT API, that stuff is very cheap in comparison), I do keep an eye on my spend. For the more variable models like o3, o3-pro, GPT-4.5, expenditure can quickly exceed what you decided to spend. I'm glad you can set spending limits if you choose to do so.
For the examples you gave, there is a lot of marginal cost to provide more of the product. ChatGPT and your utility would be bankrupt if they gave infinite usage. Although ChatGPT’s consumer product is flat rate (users greatly prefer that model), rumor is that they lose money if you use the big models a lot, and they do cap usage.
While I agree with most of your comment, there is a pitfall - bundling is often used as an extractive pricing strategy, where you force the consumers to buy goods they do not want to access the one they want.
This is problematic when the seller is a monopoly, and has a strong market power that prevents the consumer to seek alternatives.
https://www.concurrences.com/en/dictionary/bundling
I would pay for YouTube premium in a heartbeat if they didn’t also include YouTube music, which I have zero interest in paying for.
The whole point of bundling is that you combine many things together because the marginal cost is zero. If you pay for YouTube premium, you are also paying for all of the videos on YouTube that don’t interest you. That’s irrelevant as long is there is enough content you want. The fact that the bundle includes a music app you don’t care to use is the same way, it doesn’t detract from the value proposition.
Well in my case the value is not there at their price which includes YouTube music as a separate service that must be maintained and I assume separate licensing as well. I’m not interested in paying for access to that side of the service. I have little doubt that the access to YouTube music adds to the sticker price of their bundle. They are not simply passing along bundled costs, they are also targeting what they think consumers are willing to pay. I think they’ve miscalculated in this case.
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