Show HN: Progressive paywall using bitcoin microtransactions | Hacker News Reader

Show HN: Progressive paywall using bitcoin microtransactions

klipperapp.com

14 pointspowertry31 comments

Somebody in the media industry tell me I'm wrong, but I don't think news companies (e.g. your customers) actually want this.

If I subscribe to the NYT for $5/month, then in order to "get my money's worth", I use NYT as my primary source for news. I visit newyorktimes.com every day and see what today's stories are.

After 30 days of that, I am an NYT user "by habit" and thus a loyal customer. I'm not clicking through news aggregators as much anymore, because NYT.com is obviously better I tell myself, or else why am I paying $5/month for it? NYT wants customer loyalty to their brand so they get that consistent income and sign long deals with their advertisers.

This sounds a lot like cable "unbundling", which consumers want (or say they want) but Comcast will offer it over its dead body.

Now maybe you can sell this to independent blogs. But TipJoy (YC 08) tried that and went bust, so it's an uphill road.

We were thinking about independent blogs, our thinking is very much on the unbundling lines.

We are trying to build this around summarization tech (text, audio, images, video, etc), you see some quality of the good before you buy it. Sort of window shopping for content, like it then you read more.

Thanks for you thoughts! Appreciate it :).

good point. I hear that a some of the pornography sites are charging the bitcoin users more to make if for the non recurring payment style.

The main problem with micro-transactions is "represented value" - if something doesn't cost very much then the perceived value of the item is very low so it ends up looking like you're charging for something that isn't really worth the cost. For the majority of people $10/month for 100 articles represents better value than $.10 per article even though they're actually the same.

So, another way of looking at it is the app store/app upgrades way. You pay using smaller increments, but have a view of the goods that you are buying. So instead of a future commitment, its more about paying for what you want now.

If its seamless, then micro transactions work. It also implies you are distracted enough not to do a future projection of the longer term aggregate costs incurred :).

You should look at http://blendle.nl same concept. All mayor newspapers in the Netherlands use it. After reading an article you can choose to not pay it for several reasons (link bait, not readable, clicked by accident, too short, too long etc). Articles cost between 10 and 95 cent.

Can't read :(, Not in english. But that is awesome to hear! Will try to read more about them and maybe get in tough. Thanks.

Isn't this the same trick that some newspapers and magazines have been using for ages? Show the title and the first paragraph or two, hide the rest of the article behind a paywall.

On the surface, the most noticeable difference is that this uses BTC instead of USD. But since the example amount (0.0005 BTC) is approx. $0.22, which is well within the range of a PayPal micropayment, there's little reason why it can't use USD instead.

So the real innovation here is not the choice of currency, but rather that you're using micropayments. If done right, this can eliminates the friction of purchasing a subscription. Since $0.22 is literally pocket change, you might even be able to make people pay a lot without knowing it. All those quarters and dimes can add up to a sizable sum.

Realistically, however, it will be too much hassle for readers to shell out money every time, and too much hassle for publishers to manage all those micropayments. So there might be a valid business model for a middleman that lets people keep money in a prepaid account and spend it little by little with participating publishers. You could even automatically deduct a small amount each time someone opens an article and keeps it open for X seconds. At the end of each month, each publisher receives a lump sum that is much easier for them to manage. You, the middleman, deduct a fee for providing the API and some neat statistics.

But since the example amount (0.0005 BTC) is approx. $0.22, which is well within the range of a PayPal micropayment

Yes, but they'll eat 27.3% of that payment . Not exactly a cheap rate.

EDIT: fixed.

Doesn't BTC have a transaction fee in the region of 0.0001 BTC meaning you'll lose almost the same as with a Paypal transaction?

I don't think BTC works very well for micro payments

No, the current fee (not sure if it's already in the stable version) is just half a cent: https://github.com/bitcoin/bitcoin/pull/3305

Thanks! You have summed up how we were thinking about it. It does attempt to utilize micropayments in a novel way, so the kind of actions that you are talking about like waiting on the page, maybe even scrolling are very much valid reasons for people to pay.

Can we mail you, would appreciate more thoughts around the same?

> Realistically, however, it will be too much hassle for readers to shell out money every time, and too much hassle for publishers to manage all those micropayments. So there might be a valid business model for a middleman

True, but there is still the feeling that you might be going through the pain of signing up and putting a chunk of money down upfront for something that you might not find useful. Of course that fear goes away if it takes off and gains a good reputation.

I think I would would be more inclined to try a service (aggregate or otherwise) that rewards the pain of sign up with a certain amount of free content per month. Then require payment beyond that.

Another approach would be free access to older content. No one pays for old newspapers, but you can judge the quality of the content.

Good idea. Since what I'm suggesting is essentially a hybrid of the subscription model and the pay-as-you-go model, a certain amount of free content per month could be a useful feature to borrow from typical subscription models.

Compliments on making it a deal for the "whole piece" instead of per-page. The latter invites a scam where sites would break an article into many small segments, and when the vistor finds out, he/she has paid for at least one already.

There are some other problems tho. A participating site won't show anything unless it sends the visitor's data to (a) the micropayment company and (b) google (at least, the demo won't work without requests there)? There's too much tracking on the web already. Of course, not everyone cares about this and it may become popular with the non-privacy-conscious public.

Other problems are more subtle. Sites using this would be likely to tailor content to maximize revenue - attention-grabbing titles, sensationalism - while some readers prefer qualities that are found where the motives are less commercial.

And of course, this is not likely to reduce ads. A site owner might try to go with this alone, but soon would be subject to economic pressure to include ads as well.

Thanks! We want the consumer to get a feel of the article quality early on.

We think the algorithm to summarize is resistant to tailoring due to some core assumptions we are making. We are not dependent on the title and so on.

If such a system gets adopted, it would to some extent clear up the insanity that is ads on good articles no matter where its posted.

Currently this kind of embedding (user interface) could cause some problems in some countries like Germany.

In Germany there is a law that when any contract of purchase is made on the web, the decisive button must conform to strict regulations. That is because in the past there where many frauds in Germany where contracts where made by clicking some buttons with and giving the address of the customers that lead to huge recurring costs -- and the customers believed that they just joined a user base without costs. To prevent such frauds, this law was given, but the regulations are rather strict. So the button must clearly tell, that a sale is to be made. I believe thus, a service like in the demo would be illegal in Germany.

Interesting, this would also put across our argument to use bitcoins maybe? and not regular currency transactions.

I don't know if I understand you right (my English is not perfect), but when you mean, that using Bitcoin could prevent this from being illegal: I don't think so. The problem is not the amount of payment or the type of payment, but that it is a sales contract (at least in Germany, every sale would be made via a contract, if explicitly written or not -- also a handshake could be seen as contract). And the law just says, how any sale contract must be made ... There must be a good visible button that clearly states the intention: "Buy with costs" or something similar. The customer must be very clearly informed about the sale and the fact that he is making a sale now. Your demo informs afterwards in a rather weird way. Just giving a link and say "read further" or similar would be accounted to be a fraud, I guess. I am also not sure that having a different text would be enough.

I am no lawyer, but one remedy could be to have some kind of "frame contract" where you buy an amount of readings in advance -- and the readings afterwards could be accounted for with such a system. But such a frame contract would of course counter your ease of use goal -- and of course would bind the customers what would counter your goal to lower barriers.

Okay, I got what you said. Yeah, any intermediate step would kill the seamless experience :(. Will need to figure this out, thanks!

I often read that the Bitcoin system has limits for the amount of transactions processed worldwide in a given time frame. I think it has to do with the block chain and the mining, but I am no expert in this topic.

When such payment systems spread, couldn't they overburden the system?

To make it clear: I am a huge friend of alternative payment systems, particularly if they make it possible to have smaller amounts paid on the web without hassle and with less transaction fees. But there are always the people that warn against Bitcoin because of diverse reasons (keywords: inherent limits, Ponzy scheme).

What do you think/know?

I don't think that should be a problem? In any case we will allow the publisher to use any other micro transaction system that they are "comfortable" with :).

What happens if I don't have any bitcoins to pay with?

presumably, you're out of luck. I don't think this particular monetizing model is very viable these days, except for really high-quality content/websites, which probably have better deals already, anyway.

Not too sure about that, I do think that pay wall tech has stalled for sometime now.

How does one charge for consuming content on the internet? We think that consumers can potentially see the goods(in this case the summary) before acquiring or buying it whole.

The high quality sites pretty much run on trust, the other long tail of sites that want to monetize have to cram in ads. Time to change that?

Well, we can replace the payment system with any other kinds. Facebook likes, tweets as a payment are as valid :)

>Patented technology

Did you patent paywalls?

It'a regarding the summarization algorithm and not a paywall.

Yeah, that may sound misleading without context. Its the algo we are in the process of patenting.

Please don't! Software patents are not good for our society and community.

We do agree, but its been tough trying to get the broad investor community to see value/ability without building fences around your core tech. Some even see this as validation. We don't.

Not too sure how others feel about this, this specific advice has come from fellow entrepreneurs who have managed to figure things out (i.e. raising, team, etc).

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