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Comment by baron816 | Hacker News Reader

What we really need is for the Fed to enable micro transactions. Make transferring money so easy and cheap that Visa et al can be disrupted. Facebook/Google would also be disrupted—people would be willing to pay $.03 to watch a video or read an article instead of handing over their data.

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Micropayments are a bad idea that feels like a good idea. They're bad for a fundamental human reason - each decision carries with it emotional and psychological burden. Make a few in a day and you land in decision fatigue [1]. Weighing the value of a purchase no matter how small over and over again makes the whole experience an utter chore.

  There is a paradox in that "people who lack choices seem to want them and often will fight for them", yet at the same time, "people find that making many choices can be [psychologically] aversive." [1]

There's no technical reason why any wallet operator today, like PayPal can't do micropayments except people don't want them. They think they do, but they don't.

Concrete example: For most people, it's always been cheaper to just buy the content you want to watch from iTunes one at a time - and own it forever! But everyone uses Netflix instead. They continue to use Netflix even as it has less and less of what they actually wanted to watch in the first place! In the battle of more expensive vs more decision making, more expensive always wins.

[1] https://en.wikipedia.org/wiki/Decision_fatigue

> Concrete example: It's always been cheaper to just buy the content you want to watch from iTunes, but everyone uses Netflix instead. They continue to use Netflix even as it has less and less of what they actually wanted to watch in the first place! In the battle of more expensive vs more decision making, more expensive always wins.

No way is that true.

A single season of a TV show varies from $10 to $20 on iTunes[1]. Movies are $10-$15 [2].

For anything beyond light viewing, Netflix is a clear win. Watch 2 movies a month on it and you are well over break even!

Now if you buy from iTunes, it is only pay once. But for people like me who almost never rewatch a movie, ownership is irrelevant. Streaming is a hands down winner!

[1] https://itunes.apple.com/us/tv-season/robot-chicken-season-1... https://itunes.apple.com/us/tv-season/archer-danger-island-s... https://itunes.apple.com/us/tv-season/the-office-season-3/id...

[2] https://itunes.apple.com/us/movie/back-to-the-future-part-ii... https://itunes.apple.com/us/movie/the-divergent-series-alleg...

How much TV do you watch a day? Buying a couple of seasons of TV a month is going to be about the same price as a couple of subscriptions to streaming TV. And theoretically it gets you exactly the TV you want, something which you need 5 subscriptions or so to do right now.

I think consumers would be better off with the Season Pass model than having to subscribe to a bunch of services, but what really kills it is that it doesn't have all TV, or anywhere close. Season Pass isn't horrendously expensive if that's all you have, but it does get expensive on top of Netflix and/or cable.

As for movies, you can rent them from $1 - $5, so a couple of movies per week can also be cheaper than a couple of streaming services.

People watch A LOT of TV. Americans watch 4 hours per day, still ahead of the amount of time they spend on smartphones, approximately 3.5.

https://www.statista.com/chart/15224/daily-tv-consumption-by...

That's a nice 7.5 hour workday right there.

> How much TV do you watch a day?

Just a side comment, 'watching TV' today when TVs and monitors are common and cheap is different from 'watching TV' 20-30+ years ago, when TVs were more of a luxury good (I know displays still aren't free but they're much more accessible than they used to be). It's common for people to have netflix on in the background while doing things (e.g. studying, netflix and chill), to have netflix on a secondary monitor while gaming, to fall asleep to, etc. People probably don't 'watch' TV in the sense of sitting down and just staring at the screen like they used to, but they still 'watch' a lot of TV in the sense of having it on. From that perspective, it's easy to imagine someone watching 8+ hours of netflix a day: auto-playing sitcoms in the background during chores or studying, switching to a favorite show to watch during meals, binging multiple episodes or seasons of a new show on weekends, etc. That would rack up the cost quick using your pay-per-show model

> 'watching TV' today when TVs and monitors are common and cheap is different from 'watching TV' 20-30+ years ago, when TVs were more of a luxury good [..]

Source?

Today, people seem to spend a significant amount of money on purchasing an expensive (large) TV. They then spend even more money on subscription services for content to watch on their TV.

Rewind 30+ years (when I was young): TVs were small, and the number of channels was too. No-one paid per month for access to channels. You watched what was being broadcast live, or you drove to Blockbuster and rented a tape. I don't recall that being considered "luxury".

Maybe it wasn't a luxury for you, but for me and the people where I lived growing up TVs were much more of a luxury than they are today. People practically give away monitors and TVs, especially if they're old or small. Add in laptop and phone screens, and you have even more displays for 'watching TV'. If a poor family has an old phone per person and one TV, that's easily more than most families would've had when I was growing up, which was often 0-1 TVs for the whole household.

To tie it back to my original point, people can afford more screens than the equivalent people could've afforded 20-30 years ago. This makes it easier to have netflix on in the background, whereas back in the day it would've been more of an active activity

> How much TV do you watch a day?

None.

Using my family as an example and guestimating some numbers...

1. One 24 minute episode of a show during dinner with the family. That's not strictly accurate, but it averages out around there. That's 30 episodes per month, at 13 episodes per volume and $20 per volume (on itunes), that's ~ $46 / month.

2. One 47 minute episode of a show with my wife, each weeknight. That's 20 episodes per month, at $30 for 26 episodes on iTunes, that's $23 per month.

3. Two movies per month with the family (one per two weekends.. I'm guessing here), at lets say $12 per movie, is $24 per month.

4. Some nights I watch TV alone, as does my wife. Lets call it one show per 1 between the two of us. So 30 shows per month at an average of something like 20 shows per season and $20 per season on iTunes, is $30 / month.

So with that, we have

46 + 23 + 24 + 30 = $123 / month.

Everything we watch is one of two services we pay for, for a total of something like $30 per month. Streaming wins by a LARGE margin.

And that doesn't even count the mental cost of binging. If I binge and each episode costs me additional money, I have t justify it to myself. When I'm paying monthly for all you can watch, that isn't a problem.

Movies often drop to $4 or $5 (and you can almost always rent them for $4 and sometimes less) and complete tv series often go for $20-50.

I don’t currently have Netflix, but when I did have it there were rarely two movies per month that I wanted to watch that they had. Seemed like they mostly switched to niche tvlike series.

That seems like an overgeneralization. People are perfectly happy to buy low price things on Amazon or eBay.

IMHO, transaction fatigue swamps the effect of decision fatigue. Where transaction = the energy required to realize a decision, once made. See: PayPal's valuation.

You can get the best of both worlds with a plug-in that allocates a fixed amount each month for whatever media you choose. Microbuy to your heart’s content until the amount runs out, then decide if you’ve had enough for the month or top it up. The plug-in would roll your allotment over if you don’t finish it.

IMO each time is still a purchasing decision. People are about as weary of deferring the making of the purchasing decision to an app as they are tired of making the decisions.

Just reduce the price until it isn't.

0 dollars?

You're describing coil.com and Web Payments, sounds like.

This seems like a reasonable argument, however I must say that buying content from iTunes is usually not cheaper than an Netflix subscription, unless you don't actually watch TV regularly.

With the highest level premium subscription of $17.99 a month you could only watch 4.5 movies a month, or 5 - 6 episodes of a TV show. I don't watch TV regularly, but if an average user watchtime of greater than 2 hours is accurate, as I'm getting from a quick search, that's more like 90 episodes a month.

But how many people actually watch 4.5 new (to them) movies or 5-6 new episodes a month? I suspect that’s pretty rare.

you think that's high? I usually binge at least 2-3 seasons of a new-to-me show a month on netflix, prime, hulu, if I'm really busy -- my wife makes up for the time I miss watching new-to-her shows, or the kids watch new-to-them shows or disney launches a new movie... I mean.. Wandavision, Falcon+Winter Soldier, Mandalorian, New Mighty Ducks are top notch and that's just disney...

Netflix has the Witcher which I still need to watch, just finished two different ones on figure skating Zero Chill (Hockey+Figure skating) and Spinning out. Both really good shows that weren't on my radar. Recently finished Queen's gambit too--also great and not on radar...

Lots of back-burner shows too (waiting for the next season).

7-11pm is usually dinner, tv with family put kids to bed, watch 1-2 shows with wife, then go to bed. Sometimes I watch old movies that are new to me just cause I heard they're good but haven't seen them yet. Grew up in 80's and just recently finished Fast Times at Ridgemont High for example.

120 hours of screen time's easy... weekends are probably a lot more.. maybe 8 hour sessions, definitely enough to watch 1 whole new-to-us series... esp. with lockdowns and covid.

> you think that's high?

I don't really know. I'm sure plenty of people consume a lot of new stuff, but I just had a gut reaction to seeing "4 movies or 6 new TV episodes a month" mentioned as a low bar. To me that's a very busy month! But of course I have no data and no reason to believe myself and my family/friends/peers to be representative.

Families with children are an obvious case that probably pushes up the average. But I also get the impression, based anecdotally on myself and my friends and peers, that there's also plenty of people who routinely find themselves considering whether they should even keep paying. There's definitely a common sentiment like "it seems like I browse around on Netflix for several minutes and see the same couple of dozen things that I've been seeing for months, I swear I remember hearing about some recent must-watch movies and shows, but I sure can't find them right now, and I just end up watching YouTube videos." I personally am definitely way over-subscribed to streaming services, and my YouTube Premium subscription is delivering tons more value than all the others combined.

That's a good point. I know a lot of people who buy an unlimited Metrocard even when they don't get their money's worth out of it just so they don't need to think about paying for their subway fare.

The real reason to do a monthly unlimited is to not have to reload, especially when you are pressed for time.

Going forward, in NYC, I'm just going to use OMNY, since it's not in all stations.

I'm one of these people. I have a BahnCard 100, an unlimited-access pass from the German national railway company that works on about 95% of all public transit across the country (all railway except for some lines that are only tourist attractions; and all subways/trams/busses/ferries in 120 large cities).

It costs me around 170€ per month, which is way more than I would spend if I bought just a subscription for my city's public transit plus train tickets as needed. But even if I pay a few bucks more, it's totally worth it because it changes how I approach travel. I can wake up in the morning and decide on a whim to do a day trip to a city 200 kilometers away for no extra charge. I can decide on Thursday evening to take Friday off and visit my parents (who live 500 km away from me) for the weekend.

(Side-note: Obviously a lot of this is not possible right now because of the plague, but at some point, all parties involved will be vaccinated and I can resume my travels.)

It's the same idea round buying a season ski pass vs pay each day. Or owning a car vs renting it for each need. It's not that its more cost effective it's the idea of having to do a mental hurdle every time you want to do something. The sunk cost is an enabler to go do something vs having to pay each time and get value out of that trip.

I've had this debate many times with friends. Am I hyper efficient with my spend? No, am I happy about my decision making process and/or less decisions to make? Absolutely.

If I see micro transactions for reading articles SMH. Conceptually I see where you are going but it would have really bad ripple effects IMHO.

Eh I think both the example you've provided aren't the best. A season pass breaks even at most places in 4-6 days if you're going at peak rates. A car rental is much more variable (parking, distance limits etc) but does have a higher mental load than a ski pass. Both would be pretty easy things to hit break even if you're going to be doing/using it. A metro pass is often a much higher break even point. Iirc, when I did the calculations for the NYC metro card, you broke even using your pass to and from 1 place if you left your place every day. Obviously that calculation is much different for each city, but they require a high number uses vs your examples.

Also supporting a system you appreciate has an added value, less hassle etc.

Your concrete example substantially detracts from your argument because it is just not true.

I'll accept that I was projecting my own calculus.

I can see some utility though. I'd love to be paid a penny at a time, and pay for things a penny at a time. I'd love for my income and regular bills to all be made into rates (pennies/second) rather than lump sums on some weekly or monthly schedule.

Heck, make them functions, so there's no ongoing communication that needs to happen to represent value transferred between parties, until the function changes or the sending account runs out of money.

There's so much I can imagine happening if value transfers could defined as functions instead of individual transactions.

The idea would be that people transact without consciously thinking about it.

Ex. I pay per byte stored in my cloud backup, but I don't fret about which individual bytes I'm going to store, it's all captured in a high level strategy of which directories I want backed up. If I start spending more than I want, the solution isn't to individually comb through what files I want to back up, it's to tweak my high level strategy.

That’s a valid point, but you don’t seem to be comparing it to the “fundamental human reasons” that dominant Internet media oligopolies supported almost entirely by advertising might impose emotional and psychological burden.

I believe the stuff about decision fatigue, I just don’t think you can immediately conclude “therefore paying for online content is a non-starter because of fundamental human psychology.” I mean, people do still decide to buy things, including online content!

The parent comment was railing against micropayments in particular, not buying things online in general.

Concrete counterexample: The cloud. You can spin up and down servers whenever and you make micropayments for keeping the servers you have around.

I think you are wrong and you are confusing your opinion with "absolute truth". It is a limited form of is/ought fallacy. Just because things are one way today doesn't mean they ought to be that way.

I recall reading a16z blog post "Outgrowing Advertising: Multimodal Business Models as a Product Strategy" [1] and they mention many innovative business models coming out of China.

For example, from the "Books" section of that blog post:

> Books are also sold as bite-sized snacks. Readers pay per 1,000 words, for often-serialized works. Below is a screenshot of one of the most popular books from 2014, 一世倾城. It has over 10,000 chapters and is still being updated — now more than 46 times the length of the entire Harry Potter series. Because authors can publish chapters piecemeal, they are also able to incorporate reader feedback to quickly change plots or even kill off characters.

> Some authors offer free books and illustrations, gain a loyal user base, and then collect money through tips. At the end of each chapter, an overlay button for tipping authors allows readers to tip from $0.15 and up.

This kind of thing is built into WeChat and WeChat has significant penetration in the Chinese market. Twitch is also experimenting with a form of micropayments called "bits" [2]

Right now in the West we don't have an equivalent of WeChat so we don't see the same things happening. Twitch is a very limited scope (live streams and mostly focused on gaming content). However, just because it isn't happening widely in the West yet doesn't mean that emerging economies aren't going to jump on this. And it also doesn't mean it won't make it's way here eventually.

Our systems are preventing us from experimenting with these new business models. If we completely remove the friction that currently exists - let's see if clever entrepreneurs can make it work. The alternative is to fall behind the experimentation that is currently happening outside of our bubble.

1. https://a16z.com/2018/12/07/when-advertising-isnt-enough-mul...

2. https://www.twitch.tv/bits

Indeed, it's almost certainly my own opinion. The fundamental technology or platform to implement a micropayments system very much exists though, it's something PayPal could implement in a heartbeat.

While I take your point that "micropayments" are that thing people are have been consistently wrong about for 25 years now... I'd be careful leaning to heavily on psychology in making prediction.

There definitely needs to be a breakthrough UI, cultural shift or something... but people have the ability to background stuff given the right circumstances.

> buy the content you want to watch from iTunes one at a time - and own it forever!

Can I actually download it? Or is it "as long as it is not removed from iTunes and you can log in"?

The mere fact that their people demanding these things means that they are wanted.

Micro transactions would open up new business opportunities. And I don't find it very taxing when for example going to the grocery store where you make a lot of small purchase decisions. One concern though is book-keeping and tax rules if you run an international small business - but I guess that can be automated too ... So that the state automatically get their VAT from every transaction and in turn provides a payment system completely free from transfer fees.

> They're bad for a fundamental human reason - each decision carries with it emotional and psychological burden. Make a few in a day and you land in decision fatigue

So, introduce a "content-plan" which is just like the data-plan of your smartphone. I.e. a quota on the total payments per month for content.

By the way each advertisement also carries with it an emotional and psychological burden.

I tried switching ting as my mobile service provider a few years ago when it was something along the lines of 10 dollars per gigabyte and every time I wanted to watch a youtube video I had to ask myself "is it really worth 4 dollars to watch this?" "would I really spend 2 dollars to download this podcast when I could just download it for free at home?" . I eventually wound up switching to another provider that actually wound up costing me more money per month but a flat cost and a flat allotment of bandwidth. Even though the flat rate service was more expensive it was still preferable to me because I didn't need to spend mental energy justifying the cost of every action I made.

There's two issues to deconflate:

1. Reducing fees associated with smaller payments - it would be nice to be able to buy a candy bar or give a street performer a tip without costing anyone an arm and a leg to put a transaction through.

2. More choices - too many choices are bad, unless you're framing a poster.

https://en.wikipedia.org/wiki/The_Paradox_of_Choice

There is no need to decide you start watching the money starts streaming you stop the money stops. If you only watched a few seconds its only fractions of a cent it doesn't matter. If at all it makes people less likely to watch crap and more likely to stop if it isn't what they hoped it to be.

And BTW the standard already exists https://interledger.org/rfcs/0029-stream/

It should also be noted that placing prices on things changes peoples decision processes dramatically. There's the famous experiment where a school tried to combat parents picking up children late (which caused teachers to stay late) by charging them a small fee. That caused the number of late parents to increase because it shifted the issue from guilt to capital. Zach Star used this example in a recent video along with others[0]. These types of decisions are extremely complicated because we're changing the entire incentive structure in a non-obvious way. This often creates "contradictory" results because we have bad priors in our model. What is "obvious" usually isn't (which is often why problems haven't been solved).

[0] https://www.youtube.com/watch?v=AGuwXSe6tAw

This has been said before. Everyone who is invested in the advertisement model will then start to hate on the idea, for obvious reasons. In particular, media, including journalists who cover these ideas.

However, the advertisement model truly sucks. It severely dilutes the interest of the actual consumer and actual fans, in favor of big companies who buy the advertisements.

EDIT: As I mention below, this isn't theory. This debate happened between Penny Arcade and Scott McCloud nearly two decades ago.

>In particular, media, including journalists who cover these ideas.

Why would they care? They still get paid in the end.

They sometimes get more than just payment. If a publication promises to show an ad for a specific company, before a visitor can read a specific article, that company try to help drive visitors to that article to drive more ad views.

This is why (using Twitter as an example) you sometimes see news articles for seemingly unrelated content show up as promoted Tweets straight from the journalist with "Sponsored by T-Mobile" at the bottom. Chances are, clicking through to the article will also lead to a T-Mobile advertisement.

Modulo some huge disruption. Most people are naturally reactionary, especially when it comes to fundamental changes in their livelihood.

I'm not talking in theory. This is history. This debate literally already happened almost two decades ago. Scott McCloud and Penny Arcade!

I work in the “traditional” media—software not journalism. Ad sales are only celebrated for the money they bring in. Any optimizations around that are only there because they serve to increase as revenues, like any readership analytics.

In my experience, and I can’t speak for them, but it appears to me the journalists, at least any of the ones I’ve worked with, do not care where that money comes from. I think they’d prefer if it all could come directly from readership. I think it would serve to be more validating in more than one way.

To that end I think proposing that journalists (as a single entity, no less) would decry the diminishing need for advertising in their industry without actually losing revenues is a bit of a loaded take.

I hope that can happen. I'm not sure if enough journalists are that far-seeing.

Actually news media would be lucky to get $.03 from a single pageview. Their RPM is quite low due to the lack of targeted audience.

You think micropayments will somehow get rid of ads?

There are a multitude of noteworthy examples where you pay for a product and still get ads (Cable, Hulu, unskippable DVD sections, etc).

What will really curb the online ad industry is the ability for consumers to control their privacy, and make personal info a liability.

You think micropayments will somehow get rid of ads?

No. However, it would theoretically give content creators who don't want to serve the interests of advertisers an alternative source of income that allows this.

Basically, do what Patreon does, but with even less friction, and far more flexibly.

It already exists and it's called Web Monetization.

I recently wrote an article on it:

https://atodorov.me/2021/03/07/please-support-web-monetizati...

You should be able to get a report from publishing platforms on how much people paid for your cookie (per month?) just to better understand how much it would cost to not see ads. I've toyed with the idea of a "no ad" ad network that only bids on their own customers and replaces ads with either nothing or content of your choice. You end up paying a small premium on the amount they had to pay to remove ads.

EDIT: Something like this but for consumer viewing rather than for the content publisher: https://www.theverge.com/2020/7/10/21319938/youtube-monetiza...

Never mind the question of why you think the Fed would be well-suited to provide micro-transactions, they've been possible via centralized systems for years. The issue seems to be there is no market for them. See this PDF for a theory: https://nakamotoinstitute.org/static/docs/micropayments-and-...

Finally, something Nick and I actually agree on lol. That's a great write-up, too - thanks for sharing.

This is possible literally now, but barely anyone actually wants it.

- Full time content creators just want discoverability and traffic to their content, they have a thousand ways to monetize with ad revenue just being icing for many

- Content consumers just want to watch their content, ads aren't annoying enough for most people to pay $11.99 to unlock all of YouTube ad-free (~13 videos / day @ $0.03 / video)

None of the current draw to the currently dominant platforms would be moved an inch by some other platform existing with microtransactions.

> - Content consumers just want to watch their content, ads aren't annoying enough for most people to pay $11.99 to unlock all of YouTube ad-free (~13 videos / day @ $0.03 / video)

Bigger problem for youtube, imo, is that ad-block works on desktop, and also they don't have any content most of us couldn't live without.

Those problems might not be as big as you think.

>More than 70% of YouTube watch time comes from mobile devices.

>Over 2 billion logged-in users visit YouTube each month, and every day people watch over a billion hours of video and generate billions of views.

from https://www.youtube.com/intl/en-GB/about/press/

obligatory plug for firefox for android, which allows adblock on mobile. it's not as slick as the youtube app, but it's handy if you don't want to deal with the ads

The Fed does not prevent banks from enabling microtransactions.

It simply isn't profitable for banks to provide microtransaction services, especially considering that all microtransaction services to date have failed. (Contrast to P2P payment services like Venmo, which have flourished over the same time period.)

I recently started playing with the Breez wallet (https://breez.technology) and they introduced a podcast player directly in the app, and small payments are sent to the author every few seconds, while you listen to the podcast episode. It's pretty nifty and I like it. If there would be widespread support in browsers for this kind of technology, I could see it get to mainstream adoption.

Interesting, why is this app under /apps/testing/com.breez.client ? I also note that, searching for "breez" on the google play store yields no results. Is the app not really launched yet?

You’re right, I installed it using TestFlight on my iPhone. I guess they don’t have a proper release yet.

> instead of handing over their data.

If every article and every video you watch has to be paid for they'll have as much if not more data about you...

This is it. Any payment will connect a person more directly than the random targeting we get now connecting using sites visited, words you share with siri and what you put in your facebook profile.

I really don't want a centralized organization to have visibility of all transactions along with the power to cut them off.

I think this is a little too optimistic regarding what consumers are willing to pay for. The Original Sin of the Internet was subsidizing everything via advertising revenue, allowing businesses to present services as "free" to end users (in reality, you're paying with your personal privacy). This culture has taken root very deep inside mainstream culture to the point that the average person would think it ridiculous to pay money for something they've been able to do for "free" for decades now.

People paid $$$ to politicians to not have that happen.

Amazon attempted to do this with Amazon Flexible Payments Service [1]. It didn't get much adoption.

[1] https://www.allthingsdistributed.com/2007/08/the_amazon_flex...

I don’t know why Visa/MC even exist in 2021. Literal financial leeches.

> people would be willing to pay $.03 to watch a video or read an article

Nope. Maybe for 1% of the price I'd be willing to do microtransactions.

Lightning...

Otherwise Stellar XLM, Bitcoin LN

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