Tag: micropayments

Flattr-y Will Get You … Where?

I’m trying an experiment on this blog. I’ve Flattr enabled it via plugins, so now you’ll see those on both the posts and the RSS entries if you read them via Google reader or the like. I’m mostly doing this as to see where the value lies in this project. I don’t expect this blog/podcast will ever pull in significant revenue. I’d consider it a wild success if I broke even on my incoming and outgoing Flattr balance.

Here’s how Flattr works (as I understand it, with my vast 18 hours of experience with it): you put a certain amount of money in your Flattr account, and specify how much you’ll pay out each month. Then as you “Flattr” things through the month, those each get an equal share of whatever your monthly payout is set at. Think of it as Digg but with financial consequences, like Digging a thing means you are paying money to it.

What I do like about this is that you aren’t thinking about an amount as you pull the trigger to micro-pay something. The amount you are paying that recipient can range from the full amount of your monthly (if it’s the one item you Flattr that month) to such a small slice that it is a fraction of a cent. This solves one of the big problems of micropayment systems – the mental cost of valuing the payment vs the item to be paid for. In the Bitpass days, you have to think “Is this webcomic view really worth $0.15 to me” over and over again. If there is one aspect of modern life that is wearing me out, it’s being asked to make decisions over and over, all day every day, that I really don’t give much of a shit about. Instead, youmake two big decisions: 1) how much money to put into Flatter and 2) how much to pay each month Once those are locked in, you don’t think about money again. That’s smart.

The downside at this point is that the project clearly lacks critical mass and density. There are a lot of things I’d be willing to Flattr but thus far I had to really go looking for something to click. If this were more widely distributed, that would be easier. The other downside from an adoption perspective (but probably an upside from a business side) is that nothing happens at all until you’ve put some money in the system. You can’t receive a Flattr until you’ve made one, and you can’t make one until you put money in. Fiendish!

Here’s possible ways I see this playing out, not in any particular order:

  1. The whole thing is a Ponzi scheme and for most people it does nothing but the earliest people in do alright. This is also kind of the way the professional poker world works, as people shift the same money around to each other.
  2. It democratizes content payment, and people who create content for the love of it (like myself and the other podcasters/video bloggers/ et al) can pick up enough pin money to at least get costs covered pretty regularly. Sometimes you feel like you are winning the game when you just stop losing money.
  3. It is a total power law distribution, with the vast majority of items in the system getting 0 Flattrs (and thus no money), and a few getting a huge amount of them and little in between. This already might be happening, particularly with the “Top Flattrs” list in the site’s sidebar that means the rich get richer. This is how bestseller lists and iTunes directories work as well.
  4. It ends up like Digg but better because of the skin one has in the game. When you do capture lightning in the bottle with a post, viral video or something of the sort you end up scoring directly. Some sites already do this, some like You Tube notably do not in any reasonable way. I’m curious if there ever is a “Flattr millionaire” and if so, what the content is that generates it. I fear for the lowness of the common denominator, but I’m in the market to be pleasantly surprised.
  5. Much like all the best performing blogs in the Kindle marketplace are about (any guesses … ) the Kindle, at least now it appears many of the best performing Flattrs are about Flattr. Note that this blog post will be my first in that world too, and I’m curious to see what happens with that. The huge downside of this dynamic is that interesting new projects have incentives from day one to be circle jerks, creating little novel value but playing to the crowd. It’s the Web 2.0 equivalent of “Hello Cleveland! Are you ready to rock?” Pandering gets you everywhere.

I put in 12 Euros, which is 6 months at the lowest monthly payment setting. We’ll see how this goes and evaluate from there. If it seems too whorelike I might dial down the Flattr badge in every post setting, and only add it manually to a subset of them. Also, as of this writing (lunchtime EDT, Monday May 17) I think I have one extra beta invite code. I had signed up on the list for one weeks ago but when they sent me one, they sent two. I think the second code might work for someone else. Email me if you want it ,with the proviso that it’s possible it doesn’t work at all.

Cory Doctorow on Macropayments

In his column at Locus Magazine, Cory Doctorow has a piece on “macropayments.” It lays out a lot of his thinking in giving away his books for free, but also refutes the whole philosophical basis of micropayments at the same time. I like this bit:

Taking someone’s money is expensive. It incurs transaction and bookkeeping costs and it incurs emotional and social costs. Micropayments have historically focused on eliminating the cash overheads while ignoring the intangible costs. For a writer whose career might span decades and involve hundreds of thousands of readers, these costs cannot be ignored.

At various points in my career I’ve been involved in micropayment type startups. I’ve believed in the idea and it always made sense to me in the abstract and theoretical. When Scott McCloud wrote his defense of micropayments, I agreed and cheered along with him. However in the feet on the street sense, it’s impossible to note the relative lack of success of micropayments (remember Bitpass) versus the kinds of projects Cory lays out in his essay. It emphasizes to me the technocratic divide – geeks are always trying to solve people problems with technological solutions, and that seldom if ever works.

I’m working behind the scenes as an advisor to a new media/old media hybrid that is in a bit of a funding crunch. I’m almost wondering if the ideas Cory raises aren’t perhaps the way to go. Rather than looking to get $10 from thousands of people, what about getting $1000 from a few hundred people? When you look at the distribution of people who gave money to fund Jill Sobule’s next record, $70K of the $86k raised came from donations of $100 or more.

Maybe there is something to that, focusing on a few larger donors. In a way, that’s a shame because my leanings are to be communitarian and get lots of people involved. It may be that in terms of generating dough quickly, it is actually more effective to go big or go home.

In a slightly related topic, this is why I priced my stuff packages the way I did. I could have done it more cheaply but then I’m doing all the same work for less profit. That profit has bought most of my equipment and kept my podcast running at close to break even for four years. After a period of inactivity, I actually sold some more stuff packages recently which helps out. If you’d like to pull on that rope, you certainly may. Not only do you help the show, you get to be a styling fool with some great tunes. Win/win, citizens!