I’ve been thinking a lot about paywalls and why people are so averse to paying for things they use on the Internet. People don’t mind putting quarters into a vending machine to get a snack at 4:00, or handing a couple of one-dollar bills to get coffee, but put a 50-cent charge on an article, and your savvier readers will try to find it for free, while your less savvy ones will just find another distraction. People hate paywalls, and it’s not clear why. The time people spend trying to get around copyrights in a safe and reliable way is often worth more than the money that would be spent just paying for the content. Economically, it’s hard to make sense of it. The time spent reading a news article is a lot more expensive than the amount being asked-for (i.e. paid content is often only 10-20% more costly at worst, including the time) so why are paywalls so controversial? What’s the issue here?
Personally, I think it goes back to childhood. If you were in a hotel room, you didn’t touch the “Pay Channels” (perhaps as much because of what they were as their price) or you’d be in trouble. You watched the Free Channels only. You could make a few local calls, but long-distance was a no-no (when I was growing up, long distance rates were over 50 cents per minute) except on Sunday nights to relatives. For a child, things that cost what adults would recognize (given the technology of the time) as fair prices were exclusionary at the time, simply because children (and for good reasons) aren’t given a lot of money.
Most of us started using an internet at a time when the symbol $ meant that you couldn’t continue on, or you’d at least have to explain to your parents why you needed the $7/month deluxe version of the game you were playing, because you couldn’t exactly pay in cash. Sure, they’d be happy to take it out of your allowance, but just having your parents know was often too much. They’d often disapprove. “Is that stupid game really worth $7?” On to something else.
Or maybe I’m just personally stingy. It’s not that I object to spending small amounts of money. If I know I’m going to get value out of something, I spend money for it. On the other hand, I have plenty of small irritating recurring payments that I mean to get around to clearing up; with that experience, I’m unlikely to take on another one. It’s not that it’s $15 per month that gets to me; it’s that I’ll be bled for $180 per year until I remember, “oh, yeah, that fucking thing” and go through whatever hoops are involved in canceling my membership.
What I mean to get around to, however, is that we haven’t figured out how to pay for a lot of important services (and plenty of not-so-important ones, too). People have a lot of weird emotions about money, often divorced from the actual amounts. A paywall reminds people of childhood and feels exclusive, even when the amount of money involved is trivial. People also have a very justified dislike of recurring payments, given how unreasonably difficult it can sometimes be to get rid of them.
One thought I’ve had, for the web, is to set up a passive-payment ecosystem. This could apply to blogs, games, and discussion forums in a way that doesn’t mandate the individual content providers ask for money. People set a payment level somewhere in the neighborhood of $0.00 to $1.50 per hour and pay the provider of whatever they are watching or using, on a minute-per-minute basis, as they go. (The benefit of setting a higher passive-pay level is that you are served fewer ads and receive faster communication.) What’s nice about the system is that (a) the payment level is voluntary and intended to be trivial in comparison to the value of the time spent online, and (b) this has the potential to be more lucrative, for content providers, than advertising. Most importantly, though, the decision overload associated with paywalls, tip jars, recurring payments, and all of the other stuff involved in asking people for money goes away; if someone sets his payment rate at 75 cents per hour and spends 15 minutes on a site, then 18.75 cents is automatically sent to the owner of the site.
Passive payment is an interesting idea. I’m not sure where it’s going, but it’s worth exploring.
