(Clip above, made by Queensland AV act Sampology, for the Parker remix of the dubstep anthem, ‘Where’s my money?’. Hard to go past a leading man like Lancelot Link, Secret Chimp. )
Micropayment options continue to expand, offering more ways to get bread on the table for artists and musicians.
The Paypal Gorilla
Micropayments are payment systems that allow for people to easily transfer very small amounts of money without a disproportionate transaction fee attached, and these have been championed as a solution for generating income for online publishers. Click a button if you like an article / song / video, and 5 cents is effortlessly donated. Spread this model over a large enough audience and it’d start to mean many could concentrate on making higher quality work for a living. There’ve been two problems with this so far though – proportionally large transaction fees, and what others have termed a ‘mental accounting barrier’. The argument there was that ‘each price, no matter how small, carries a burden of deciding if the content is worth that price; accumulated over a large amount of content, this burden would pose an extreme inconvenience to the users’. Micropayment systems have come and gone ( eg bitpass.com RIP ), but the move by the ubiquitous Paypal could change the ballpark.
Instead of a typical fee, where a $1 transaction would incur a fee of 33 cents, Paypal now offers new pricing of 5% plus 5 cents for purchases under $12 ( a $1 transaction would now only cost .10 ). The new pricing will launch later this year, but will be integrated into Facebook soon. Apparently part of the motivation was for direct in-app transactions for virtual goods within social gaming environments, where they currently process billions of dollars a year. These payments will also be available by SMS.
Already Amazon offer a Flexible Payments service, and Google offer a checkout service, both with apparently similar pricing options, but it’s popularity of Paypal as a payment system which means that this will likely have some repercussions for independent producers. Other factors that suggest the time might finally be ripe for micropayments – the increased visibility of social media services for ‘sharing’ and ‘liking’ on the web, and the App store model, which sells software at smaller prices to much larger audiences, but also gets audiences used to paying small amounts for services.
Flattr
An interesting sidenote to the above (founded by Pirate Bay members), Flattr seeks to solve the micropayment problem by using monthly fees. Choose the amount you want to pay per month, donate to whoever you like – and at the end of the month, your fee is divided between all the things you’ve flattered. 10% of incoming revenue is taken as a Flattr fee.
[ Sidenote 2: Discovered the Paypal announcement via Scott McCloud’s blog, the author of Understanding Comics, who has been a long-time micropayments advocate.]