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Comment by cedws | Hacker News Reader

I’d love to see a ‘micropayments’ model. Instead of a monthly subscription, you pay a fair price based on usage. So instead of however much a month for Netflix, you pay maybe a fraction of a dollar to watch a movie. Or to listen to a song on Spotify, you pay a fraction of a penny. Maybe I’d be happy to pay WSJ a few cents to read this article if it were a quick and painless user experience.

With this I don’t have to juggle subscriptions and pay for something I don’t use. Companies could set the rates at a level that would generate the same amount of revenue.

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I wouldn't mind that if it's 0,50$ to watch a TV show episode, up to the maximum I would spend per month on a subscription. If I don't use it, I don't get charged. If I only watched a few things, charge me a few dollars.

However, this destroys the business value of a subscription. You can no longer bill people every month, and count on recurring revenue. The only benefit is you have their CC on file, and make it really easy to bill them... maybe there's value there for a business.

But as a consumer I would love that model. If your business relies on people forgetting that they pay for your service, your service sucks.

I feel people don't want the feeling of expending money when using a service. It just makes using the service feel bad.

Although that's how electricity and water "subscriptions" work.

I agree, I think that paying based on usage encourages people to use less, use only if they are sure that it's valuable to them. With a subscription you feel the need to use more, just to not waste the money spent on the subscription. Using more is making a habit, and allows to see more sides of a product, which can encourage you to use it even more and pay for the next period of the subscription.

I'm sure that if I was paying per song, I wouldn't be letting Spotify play random things with no end, or use it when I don't really have to, and then I wouldn't start to see the convenience it brings and that I don't mind paying that subscription. And now, after years of using it, I really wouldn't like to end that subscription, because I got so used to it.

> I think that paying based on usage encourages people to use less, use only if they are sure that it's valuable to them. With a subscription you feel the need to use more, just to not waste the money spent on the subscription.

On the contrary, businesses make more money from people paying the fee and not utilising the service enough.

If we moved to pay-as-you-go, the price would rise proportionally because the small fraction of 100% utilisation users would no longer get subsidised by forgetful folks forgetting their subscription or just hoping to use it occasionally.

Think about a small data center. A small portion of users will constantly blast away the VM at 90% CPU and saturate(use) the bandwidth while the majority will sit idle at 2-5% utilisation. If all VMs are being pushed to 90%+, the cost of operation goes up immediately and the price will go up to keep the margin healthy.

Not a decent example but hopefully gets my point across.

This is only the case if the high users are not canceled by the service upon being detected. Many businesses use this model where it is "unlimited" but they cancel customers that are using it in an unlimited way.

And my electric company/water company offer ability to pay single amount per month which is average of your 12 month bill.

So it’s clear people dislike that model as well.

Living in a climate (Wisconsin) that has extreme highs and lows my understanding is this is typically intended to smooth-out a gas bill (as one example) moving from $10/mo in the summer to $400/mo in the winter.

It’s a budgeting thing.

Electricity and water are things that we don’t mind (or even want) people using less of. The same can’t really be said for Spotify etc.

You meant use less water listen to more music, right?

Perhaps there is just much more utility per dollar in electricity and water subscriptions. People don’t feel bad about them because it’s a reasonable deal.

Let’s say you had to cut a $15 subscription. Is it going to be water or the oomphteenth Netflix clone? There is almost no value in the latter compared to the former.

So instead of however much a month for Netflix, you pay maybe a fraction of a dollar to watch a movie. Or to listen to a song on Spotify, you pay a fraction of a penny. Maybe I’d be happy to pay WSJ a few cents to read this article if it were a quick and painless user experience.

Now one has to fight against the feeling of being "nickeled-and-dimed to death". And if companies are going to set the rates such that I will probably pay about the same amount of money ("...generate the same amount of revenue"), then just bill me once a month and be done with it.

> Companies could set the rates at a level that would generate the same amount of revenue.

How would you even begin to compute this though?

If you have 1 million users paying $15 a month in the subscription model then you're making $15 million (minus taxes, processing fees, etc - spherical cow, no wind resistance for the rest of these examples).

How would you even begin to know what to price a per-vice price across the board to match that with 1 million users?

One of the things I've noticed around here is that there are a lot of new automated car washes popping up. They have two ways you can pay - per wash and monthly subscription. The car wash always prefers that you pay a monthly subscription That keeps their income steady, means they don't have to send home workers by the middle of the day if there's not enough work for them, and on days when it's raining they're not losing money by staying open.

> pay a fair price based on usage

I think you're the only one who wants that, though. They've tried that again and again and nobody uses it.

Though I can't quite put my finger on why, psychologically, I'm so less willing to fork over $3.99 to Amazon to watch a movie when I was perfectly happy to fork over that same $3.99 to Blockbuster for a physical block of plastic that I had to bring back in the same state they gave it to me.

I had the same thought and did put a finger on it. It's because we don't trust Amazon or any of the other media companies for "buying" content online - we don't trust that the purchase is really permanent, eventually the company will go away or discontinue that service or lose the rights to that content or whatever. Since we don't trust them for buying, we don't trust them for renting either, even if we'd expect the rental transaction to be over in a day or two.

The problem with the micropayments model is that we almost never see it. I don't see $3.99 as a micropayment.

Rent for 4€, buy digital for 7€ or buy a hard copy for 8-10€. The decision is obvious.

While physical media feels more valuable because you can hold it, share it with people etc, I'd suggest you didn't pay $3.99 for the video at Blockbuster, you paid for the event of going to the store, browsing the titles, maybe discussing with your friends/family what you want to see, grab some popcorn, there's trailers on the TVs. It feels a lot more special than just scrolling through Netflix

And it’s not nostalgia. You can go to the blockbuster in bend Oregon that still exists and see that it’s simply fun to walk around and see the movies. It’s just that in the back of your mind you know you can stream everything you find from somewhere.

> Companies could set the rates at a level that would generate the same amount of revenue.

With the number of people paying for subscriptions they don't use (or underuse), I wonder how expensive it would have to be to generate the same amount.

Remember the whole micro-payments thing that the web tried? It failed miserably. The issue isn't spending 10 cents versus 10 dollars, it's the hurdle of getting anyone to spend anything at all.

https://www.cnet.com/tech/tech-industry/micropayments-the-bu...

flattr is dead, probably for a good reason. Maybe it was unfeasible, maybe it was greed, but it was there and worked.

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