TechStuff’s Two Cents on Micropayments

over town. Be sure that your umbrella is upside down. That's a good one, Thank you. It's that's that's a that's an oldie that I'm going back to you there. But today we wanted to talk a little bit about the concept of micro payments and micro transactions, and they're gonna be some other related topics that fall into this um because we're talking about, you know, spending little amounts of money for something in return, usually some web content.

That's really where micro payments kind of came out of. That's what the concept grew out of. So to really understand this um, you know what, I think we're gonna need to do something we haven't done in a very long time. No, we need to get into the way back machine, and I just happened to have it right back here in the corner. It's a little dusty. Um, it looks like Josh Clark has drawn wash Me with his finger on the dust. So that doesn't matter, all right,

all right, pile in, let's go. Let's see. I'm just gonna I'm gonna set this to uh. Let's go to ninety two, all right, And here we are in nineteen ninety two. I was still in high school. Back then, I was still in college. Back then. I went to the Governor's Honors program that year. Anyway, But here's two So, so the web is just just a baby now, right, But people don't know really about the web. Yeah. Yeah, people at CERN know about the web, but outside of

certain not that many people know. So at this point the web is nothing but potential, right. We have no idea where it's going to go from here. In fact, I can tell a story that back when I was in college, so a couple of years after this moment right now, I thought the Web was just a fad. And I looked at that and I said, who the heck needs that tail? Nick? And yeah, yeah, I was using a Unix shell account. Yeah, yeah, I did. The I would use a similar thing as well, and so yeah,

you know you might tell that into another computer. You might use FTP, but you you're like, what the heck? This web thing that's for you know, that's for babies now, Just the way the same way I felt about graphic user interfaces when they finally started popping up. I'm like, oh, come on, you can't memorize forty pages worth of commands to navigate through your operating system. Sure, but why would you? Right? Yeah, no,

I eventually came around, but it took a while. So anyway, at this point, no one really knows what's going to happen with the web, even companies that are looking at the web. As the Web is developing, we're just gonna we're just gonna stroll through time here. Well, you know, I'll just put the way back machine on this wagon here and we'll just tug it along behind us until we need to get back to modern day. We're just

gonna stroll through time. And as as time goes on in the web develops, companies start to look at the web as a possible place to make money. Right, But how do you make money on this new medium. Yeah, I mean in the early we're talking about government and educational institutions. Big companies weren't really using the internet, right, and even even much private individuals weren't using it very much yet, so there was no need to worry about

things like how are you going to monetize your website? Right, But by the time you get to around nine four, you've already got some companies looking to the possibility of using the web in a way to either supplement their advertising on television and newspapers, so they would create a

static website. You would go to this website and it might have like a brief information page about the company and its products or services, and it never changed, very very dull for people who wanted to go back and check it out again. In fact, it almost felt like the web was like just gonna be this massive magazine and the articles would never change, you know. But that

evolved over time as well. Now, in the beginning, when companies started getting onto the web and people started to think, hey, the web might be away where I could actually you know, leverage this medium to make money, So not just companies but individuals as well, the question came up how do I make money from this? And there were really two main schools of thought on how to make money based

on web content. Now, I'm not talking about selling products on the web, because that's essentially using the web as a catalog, right, I'm talking about you are actually selling content on the web, whether that is some sort of experience, or it's a story, or it's you know, a a subscription to a news service, anything along those lines. One way of paying for that is to sell advertising space

on your website. And another way of paying for that is to actually charge a fee for those particular little services or pieces of web content on a per instance basis to the user, a direct fee to the user, right, We're sorry fee or a monthly fee, association fee, paywalls another example. And we're seeing that back in the modern day. In fact, I think we've made our point about how

the early web like no one knew what to do yet. Yeah, I mean, people aren't offering subscription rates right at that time, really and and you mean you did have people thinking about it, like O'Reilly Media was doing that with the g n N network. They were had a subscription fee, and of course people like a O L the online Uh services that weren't part of the Internet. You're paying

a subscription fee to get their content. So I don't want to make it sound like nobody was doing that, but yeah, yeah, for for your average company, it just wasn't a thing yet. But you did have a lot of smart people at this time we're talking about in the mid nineties at this point, coming up with ideas to create a micro payment system, a system where you could pay just a few pennies sometimes depending upon the content.

I mean, it might be something as simple as you wanna view this web page that has content on it that you're going to find valuable, it's ten cents to

do that. There were a lot of smart people looking at ways to possibly standardize that, and including people at IBM, and you had people at the World Wide Web Conference trying to come up with ways of doing this UM, trying to find a way to standardize this so that people could take that opportunity both on the the side of the provider and the side of the consumer, and to take advantage of that UM because there are some problems right, A lot of transactions online and not even

online but in person, have built into them a transaction fee. Well, if you add a transaction fee on top of a micro payment, it seems ridiculous. If you're you're spending fifty cents for the micro payment, right, and there's a let's say twenty cent fee on top of that, You're you're thinking that I'm paying I'm paying nearly a fifty seurcharge on top of what I'm already you know, what the

cost of the content. Because the people who are like the credit card fee, for example, know that that's they're trying to make their money too, and on on something that's small, it's a much greater percentage of the actual transaction. Right. That's why a lot of places you go, like a restaurant or something, will say, you know, ten dollar minimum purchase because it's too expensive for them, because they're the ones paying taking care of the fee. Of course, They'm

sure they pass it along. You sure they build it. They might build it into the actual price of the whatever the food items are. Yeah, but that I mean, so you may you may have seen exactly what we're talking about in a different context. Ye. So, but yeah, if you were to walk up to a store and you wanted to buy this, um like a something for ten dollars, and they said, all right, well, here's it's

ten dollars. That's what's gonna cost you. But we have a transaction fee that we have to put on top of it, which is another five dollars, and so that brings up the tunnel price to fifteen dollars. You might bulk at that, and I've I've actually had that experience through a a a very large company that is a ticket broker. I think we can all guess what I'm talking about here, but I will not name names. But I was going to purchase tickets to go see um

Metric because I really wanted to see Metric. I wanted to hear Black Sheep played live. And so I went to UH purchase the ticket and the ticket costs twenty dollars, and I thought twenty dollars, twenty dollars to see Metric play. I'm not really familiar with all their music, but I love the song Black Sheep. I am willing to pay twenty dollars for this experience. The convenience fee and transaction fees UH added up to ten dollars, so it was right, Yeah, it was fIF of the ticket price. Was was at

it on top of it. And yeah, that's when I said, you know what, I don't care how convenient it is or how it transacts. I am not going to do that. And so so, yeah, there's this problem. And when you get down to the micropayments, it it sounds like, well, you know, you're just talking about pennies anyway, but people tend to to bulk at that, and companies do too. It's not just the consumers, but the companies as well, because they're you know, they don't want to to give

that experience to their consumers. They because it reflects poorly on them. You know, most consumers aren't necessarily gonna take the extra leap and say the the financial institution that is in charge of this transaction fee is the one I'm angry at. What they tend to think is darn you company, A. I can't believe you're adding this fee on top of this this price. I'm met at you now.

So it wasn't working out for anybody, um and so eventually these really smart people who were working on standardizing the micro payments kind of let it fall. They you know, just couldn't see a way of making it work. And plus a lot of a lot of companies at that point, we're looking to focus mainly on web advertising. They decided between those two pathways, the web advertising method worked better for the um than trying to charge people a per

instance fee on their content. So let's first of all, let's let's jump back in the way back machine, get back to modern day. Okay, okay, So all right, well, um, the people with the big hair staring at us. Yeah, yeah, let's uh let's get out of here. And I'm not you know, before the grunge music starts to play. Okay, back in eleven. That feels better. Um, you know, it's bigger on the inside is on the outside the way back machine. I think it's the chameleon circuit that's doing that.

But anyway, uh So, companies started to look at web advertising. It was an easier way in the long run then creating a micropayment system, because since there wasn't a standardized approach, you know, you would have to invent your own, and then you'd have to secure it and encrypt it because you wouldn't want anyone to be able to sniff out transactions and take advantage of uh that and steal from either the company or the customers that would be what

we call a bad thing. So, uh, people and companies started looking at at web advertising. And it's not an ideal situation either, because web advertising itself is a little hinky, right. I mean, you know, your you might be getting a fraction of a penny per click on your website depending on how popular your website is and the advertiser that

you're able to partner with. Yeah, but the desperation behind that, that the especially to make money on the part of the website creator, um led people to put banner advertising and you know, every nook and cranny they could find and start doing popovers and pop ups and pop unders, and uh, of course that creates a backlash too, right.

You know, you get a point where the user experience is affected enough where the users say, hey, I don't like going to your site anymore because I feel like I'm being bombarded with advertising and I can't actually see the content. And so if your content isn't compelling enough, then there's no reason to go to that website. So, I mean, there's there's this delicate balance you have to make and and there's some companies that do this really well in the sense that they have a good reputation.

They consistently put out content that people find valuable. However you wanted to find that it doesn't. I might not necessarily find it valuable, like I wouldn't necessarily go to a celebrity gossip site. But a celebrity gossip site might be very, very popular and therefore might be a a a desirable site for advertisers to put their ads on, and you might be able to get a pretty good click rate and a pretty good amount of money per

click when you negotiate with that advertiser. Yeah. I was reading a couple of essays by Clay Shirky, who basically in in the early two thousand's was arguing that micropayments just don't work. Um. I think it could be argued that time has proven him right and wrong because it can work in specific instances. Right. Yeah. But that's part

of it, though, is that, uh, there's an assigned value. Um. I think for things like luxury goods, like a high end sports car or brand name fashion close, there is a perception of value that this pair of genes is worth more than that pair of genes because it has this label on it. So it means you have money to spend. It means you know, it means something to people. The brand means something to people, um, and so people might be more willing to spend more money for that

particular thing than the other. The thing is with micropayments, finding a way to assign a value to this very small thing that costs a very little amount of money. It's it's a matter of perception, and you have to fig you're out, am I willing to pay a dollar fifty for this? Or geez, it's only a dollar fifty, It can't be that good. Yeah, it's a it's a weird circular, it's strange argument, and it yeah, it is strange. It's very psychological and has has almost nothing to do

with actual economics or technology. It has more to do with the way we think and the way we ascribe value to something. And another part of the problem is that so much of the content on the web is free, right, So we've conditioned ourselves to expect when we go to the web and we go to a website, we're gonna have free access to that information, and we just that's

kind of how we assume it. And then when we encounter something like let's say the Wall Street Journal and you hit an article where you only get that first paragraph and it says, in order to get the rest, you have to subscribe. I'm wondering what the bounce rate is on that website. How many people say, you know what, I can find content about this story? So where else? It's not going to be The Wall Street Journal. So it's not going to be that take on the content.

And if that's the take you want, you may end up ultimately disappointed in wherever you go. But I wonder how many people are willing to do that as opposed

to breaking down and paying for that paywall experience. UM. I think part of where that comes from it's from the early days of the internet, because, as you what we're called we were just talking about, the early nineteen nineties is when the Internet really started making a transition from government and university UM communications to a commercial entity, at least here in the United States, and UM, you know, at that point, and there were online community splaces like

the well um and other UH sites that basically sort of adhered to UM. Those are things that created the concepts like netiket Well, you don't talk to people like this on the Internet. If you're using all capitals, that essentially means you're shouting um articles. Information on the Internet should be free because the Internet is a you know, it's not owned by anybody, So anything that is online should be free to you. As you know, once you pay your subscription fee to your I s P. You know,

the information is available to anybody. Uh, you know, because they were using net groups and you know, gopher sites and all sorts of other things where where you could find things like that. UM. And I think that started out. I mean, I think the early people who were there UM really got the sense that this is the way it should be. Uh. The Internet is a place where anybody can talk about anything and it's available for everyone.

And companies are saying, well, we have responsibilities to our shareholders. We need to make money on this, and we have to find a way to recoup the investment that we're making in this new medium, and as a result of that, we're gonna put advertising on it, or charge a subscription fee,

or charge you her article. UM. But I think that's where the conflict lies is that people who started using the Internet in that transitional period got used to the idea too and that, and and for a long time people on the internet have offered stuff for free to get started. Oh yeah, yeah, yeah, no, no no, no, no no, for the first two months you don't have to pay anything,

or the first ten articles or um. And the music subscription services that like mog and audio that just started making a certain amount of time available, you know, to get you hooked on it so you will pay the subscription fee or the per song price or whatever. So now we get into where micropayments and micro transactions actually do work on the web. And well, like we said,

they don't work in everything. It's not like, um, I don't think the average web developer when he or she is launching a website is going to necessarily find a lot of success through the micro payment method. Even if you think, hey, this is a fair price for this content, and it's not a lot like it might just be a cents again, because of the psychological barriers we've talked about, both the idea of oh it's if it's twenty five cents,

it can't be worth anything. It's it's crazy to think that something that's priced at cents is somehow worth less than something you would find for free. But there's that perception, Um, you know, it's it let's but there are places where it does work, like iTunes for example, or Amazon the Amazon Music Store, the Digital Music store, where you're buying songs on a per song basis, and you're talking about okay, well I'm buying a song for you know, anywhere between

sixty nine cents and a dollar twenty nine. Um, that's where it is working. I mean, that's that you would consider that a micro payment. Um. Micropayment, by the way, is one of those terms that doesn't have a firm definition. Yeah, you don't really have a way of saying, well, anything

under this price is considered a micropayment. Anything over it is not a micro payment, although depending on the financial institution you're dealing with, that could be defined, you know, like PayPal I think says that anything below twelve dollars is a micro payment. Um, but that's PayPal, you know, It's it's not like that's the the definitive authority on what is and what isn't a micropayment. Anyway, the model of buying per song at nine cents or somewhere around

in that area has worked. You know, people have have bought into that, and that's one of the cases where a micro payment approach has actually paid off. And you know, that's kind of interesting to me. It's it makes sense in a way because you know, we're used to buying music albums or even singles, you know, the back in the old days, we used to buy singles all the time, and either on cassette or on vinyls. I do too

up left over from Chris's childhood, but from mine. I will make sure to get Hello Mota, Hello Pata back to you as soon as possible. Please, I'm you know, I'm sorry. I'm sorry. Sometimes I like to you know, Spin Records, and that's one of my favorites. Uh. Anyway, the um the we're used to buying songs, and we're used to buying music, so going to this micropayment model where you can buy individual songs, it appealed to a

lot of people, including myself. You know, I had gotten to the point where I was no longer feeling like I was getting the album experience, you know, which is where I would buy an album from a band or artist that I liked and listen all the way through,

and that was like the experience I wanted. I wanted to hear the transition from song to song, and sometimes that actually created a more meaning for me, or I just wasn't interesting to hear how they crafted the songs and how they arranged them on the album like that was a big deal. And then eventually it starts sounding to me like there were more and more albums that didn't really convey that experience to me as much, and then it was more like, hey, there are a couple

of really good songs on this album. Those also happened to be the singles, and all the other songs are not that good and or at least I don't enjoy them as much. So that gave me the the ability to buy specific songs from an album without having to get everything else that I may or may not actually like. So I think a lot of people followed that they enjoyed that as well. So we started seeing that actually

applied in other areas besides just music. In games, it's actually fairly it's becoming more and more common yep, and uh not just and and that actually is very common on the social network games, yes, the freemium games. Yeah, like on on Facebook and Google Plus. You see you know, games, especially Zinga Zingca is well known for doing this. UM. And I've played a couple of those games where I

still think they're more like software toys than games. But you know, I'm not going to argue that in this podcast. The thing is, UM, you get to a certain point where you it's like, yeah, you can do this and it will take all day. Or if you pay us a dollar, you can do this now and move ahead more quickly, and you can get ahead past your friends. Look where they are, you can move ahead of them and it gets you this. Um You're like, wow, a dollar? Is it worth a dollar to me to move forward?

Because I'm I'm frustrated now. UM that in and in app purchases for uh Android and iOS, which is the operating system for the Apple mobile devices. UM, that's become a very common thing. Course advertising in app advertising has been also, uh but a lot of not just games, but other enhancements and things for your inn app. Uh. You know where you don't actually go to the the

app store to purchase and add on for your game. UM, you actually say well, okay, this is a dollar and you'll get these extra screens, so you'll get this extra benefit. If you do this, Um, yeah, they're there. This model has the freemium model has received a lot of criticism from gamers UM, particularly freemium games that that spawned out of South Korea. A lot of those games, UM the the the problem is that gamers will say that the game is designed so that you pay to win UH.

In other words, in other words, the the model, the financial model the game is based on UH is a moral right. It's not. It's not. It's not immoral. It's a moral it's not a good or a bad necessarily, it's how you apply it. But that in the way that it's applied in these games is that it lets people who have discretionary income get an advantage over people who are, you know, just playing the game to try and you know, use the best strategy that doesn't necessarily

involve pouring money into it. It's it's not too different from using a cheat code in a game in order to get advantages, right, It's just instead of instead of entering in a cheat code on your computer or in your console, you're entering in real money to get that advantage. And so some people would argue, hey, this game is not really about skill, it's about who's gonna pour enough money into it to get the advantage of everyone else, and really, where is that? How is that really a

game at that point? Well, just to clear it up too, there will be things where you might be battling an adversary in the game, and you can do that all you want to, and eventually you may win or you may not. But uh, if you're willing to cough up a dollar fifty, you can have this weapon added to your storehouse and that might be the difference between winning

and losing. Or you might be able to buy certain kinds of buildings for your town which will enable you to create more uh fighters or you know, better weapons or develop faster technologies. Yeah, yeah, that kind of thing. It's not like you're saying if I pay five dollars, I'm going to win the game. I just wanted to clear that up so that people understood understand. Yeah, yeah,

A lot of these are multiplayer games as well. When you're playing, you're both cooperating with and competing against other players and uh and so that gives you the incentive to try and uh and out out with your opponents, which, you know, why outwit them when you can out buy them. Uh. You know, like if if it means that if you spend you know, ten bucks on this game, Uh, then you get a huge advantage over other people. For some people, that's going to be Uh, that's gonna be a compelling reason.

And you know, I can't say whether that's right or wrong. I mean, you're playing the game for free, and there are plenty of games out there. I've spent lots and lots of money by certain games, right, And I I don't blink an eye, you know, I'm I think, Hey, I want this new Xbox three six game. It's gonna be sixty dollars when it comes out. I'm gonna go buy it, and I pay sixty bucks and I come home and I play. Now, I'm not being given any

specific advantages, you know, or disadvantages. Uh, it's just playing the game as is. I might eventually buy downloadable content. We'll get into that too, which is related to micropayments, but I don't you know, that's what I purchase, is what I get, and that's the game. Um playing the freemium games, you know, it may be that I would spend a fraction of that sixty dollars, you know, maybe I'd only be spending five bucks just to get this one thing. But again, it feels it feels cheap to me.

Not cheap in the sense of, hey, that's a great value, but cheap in the sense of I feel like I'm cheating. Well here, here's okay. I've seen people complain about the freemium type games, you know, because they say, well, they're free. And the thing is, though, that the companies behind them are in the business to make money. Um, so I have a difficult time to begrudging the freemium game creators from restricting some content to people who pay for it

because simply because they're in it for the money. Now, if Henry wants to build a game in his spare time that he just wants to share with the world and wants to make it free, doesn't have any like the paid content in there at all. Yeah, I mean it's then that's the thing I mean. Or if he wants to make a few bucks, But the thing is, I mean, you have to. I think it's one of

those things that's important to look at both sides of. Now, on the other hand, um, I feel like I'd rather go ahead and I'd like to know what it is up front, It's like, well, you know, if you spent let's say, thirty dollars, you could have everything that's useful in this game. I'd kind of rather pay for it upfront, you know, I'd rather, you know, spend the fifty dollars on uh say, Age of Empires and get all the weapons and all the buildings and all the stuff that

I'm gonna need to play the game against anybody. I'm gonna play it against uh and have it come down to my strategy in the end. UH. And the reason I'm getting pulverized rather than going, well, if I just spent the other three dollars, I could get that thing. But I really don't want to spend that three dollars. And there are ways of implementing this that feel less

less like a cheap cheat to me than others. So so the games that I'm specifically yeah, the games I'm specifically talking about are the games that are kind of like real time strategy games. So things that fall into that category include, By the way, I'm going to mention a few game names here, UH, and all of them are essentially identical. The concept behind the game is the same concept the graphics are different, some of the gameplay elements are a little different, but the basic idea is

exactly the same. So things like Evany, Dragons of Atlantis, Global Warfare, all of these games have the same basic concept.

You create a city, you create buildings in that city that give you certain abilities, and some of the things you need to build depend upon you having other buildings or our research or whatever in place before you can actually start on them, like especially military units, because there's a military component to and you have to build mining buildings like stuff, stuff that's farming out resources and you

use those resources when you're building other stuff. There are hundreds of these type of games, and their model tends to be, Hey, if you want to speed up building this building, pay us you know this amount of money and then it will instantly be finished. Or if you want to speed your troops so that they attack your opponent before your opponent can react, spend this much money and your troops will instantly get there. You know that

kind of thing heating exactly. That feels like you're playing the god mode in a in a in a video game.

Now there's another way of doing this, where there's another way of doing this where it's like role playing games where you know, you can play the role playing game for free and there may not even be a cap on your character's level, um, so that you can play it until you hit whatever the maximum level is for everybody, and you can play that game for free, but you're not going to get access to certain areas of the

game unless you pay money. And I don't have as big a problem with that because to me, that's saying, hey, you know what, if you're willing to go through this experience and you know you're not getting everything in the game, but you're not also, um, it's not like when you pay money you're getting an advantage, you just get access to a different area. That seems less of a problem to me. And uh, the game that I'm thinking of

immediately from this was Dungeons and Dragons Online. In d Online, it started out as a subscription based game, so sort of like you know a lot of other multiplayer games that you'll find, um, but then it moved to free online play and just areas of the game were restricted and if you wanted to be able to play a certain quest, you might have to actually purchase that quest, and if you couldn't purchase the quest, well, then you could play other parts of the game. You just that

area was off limits to you. And uh, that didn't seem as big a deal to me, And it seemed like I thought, that's a pretty cool way to try and do it, because if you like the game enough, you're gonna say, hey, you know what, I really want to see what's back there, because this is an entertaining game to me, and I'm willing to pay for it. And if you're not, then you know, you just you move on to do something else. Uh. So that you know, that kind of leads us into the downloadable content area.

It's it's related. It's not necessarily a micropayment, because sometimes a downloadable content game can be as much as a regular, maybe mid tier game. I've spent probably around I don't know, twenty dollars for a piece of downloadable content to in a game I already had purchased. But that's also a way that that companies are finding, uh works when you're trying to sell um sells content on the web. And uh, you know, there are a lot of Xbox games that

do this where you can purchase downloadable content. Actually Xbox even adds another layer of complex uh analysis on top of this, because in Xbox you purchase games through the Xbox Point system, which means first you transfer your money, your dollars into Xbox points, and then you use the Xbox points to buy stuff, so that that actually, you know, if you're buying something for eight hundred points, let's say your mind doesn't necessarily automatically make the transaction of oh,

that means a hundred points, that equals this many dollars. So it's a little different, right that that might be a way of trying to get away from that psychological barrier. It is, yeah, because it's not easy to make that translation in your head. Right. So you're so you're ending up, you're ending up purchasing stuff, but you're not having you're not hitting that wall where you're thinking, hey, wait a minute, this is ten dollars. I'm not going to spend ten

dollars on this. No, it's not ten dollars, it's a hundred points oh andhred points. Yeah, I'll spend inhred points on that. Um. Yeah, So there's that level of complexity. Two. Uh. Downloadable content I think has been a pretty successful method of of doing the micropayment model. UH. And you see that also in games like the multi massive multiplayer games where you can pay to get specific items that don't necessarily give you an advantage, but they give you your

character a certain look. Like. I've seen a lot of that on both on computer games and console games, and that seems to be working pretty well too. So micropayments can work. It's just that it's interesting that if you look all the way back to the beginning of the web, there are thoughts about micro payments from the star. It just didn't you know, it didn't work on a broad

spectrum approach. Yeah, well there were there were. There were the two pieces which we which we really covered but in in a nutshell, the two pieces being the UH infrastructure needed to make it work, UH, to make a secure transaction. And in the beginning, there were a lot of different models for that and they didn't all work the same. UH. And you have to make sure things

are are UM are squared away. UM. I was actually reading an article went doing my research for the for the podcast UM by Max zeladon Itt UH Bloomberg Business Week, who was saying that you have to watch out for things like UM security risks, you know, stolen passwords, break ins like we've seen in the last year, um you know, for other types of sites UM and once. And that leads to the other part, which is the the mental

acceptance of micropayments. Once established a value, a relative value for these these very small transactions, and you've established that it's my money is going to be safe, it's gonna get where it's supposed to go, and nobody else is gonna hit my credit card for something else, then you know, it's just taken a while for the models, uh to catch on. I mean, I remember when iTunes the idea of paying a dollar for a song per song UM

bothered a lot of people, primarily the recording industry. UM, you know, because suddenly it was it was broken down from the album you could just buy individual songs. Uh. Now it's pretty straightforward. People don't really question a dollar twenty nine. Of course, the price is going up um or or whatever. You know, an older album, Hey, you know it's it's fifty years old. Let's say it's you know, five dollars. Um. You know, those kinds of things are

not uncommon anymore. It's interesting, though, we do still find bands that resist their problems, broke it up into individual songs A C, D, C UM and uh, you know, and then it's it's you could see this, I think in uh publishing for e books, because people are still resisting, Well, if I have to pay the hard back, why do I have to pay uh, you know the book or sevent it's not a book. You didn't print it, you didn't find it, you didn't ship it to me money,

you didn't incur those costs. Why should I incur them? Yeah? And that's and that again we well we've touched on that before, but but that's I think you could see that. Though for music it's established if you know, you've got a price point, you have an idea of what's going on, and you're comfortable with it. This is newer and they're

still fiddling with the prices on the exactly. And because they're fiddling with prices, and because you could have a company come in and undercut everyone else, it's still very much the wild West in that in that realm. Yeah, but I think that's an example of uh, sort of how online transactions and the idea of micropayments, like, yes, you have to an establish and a value. You have to establish a value for these things, and people have to become accustomed to, you know, the prices and the

payment system. Yeah, and there's a lot more to this topic that we could cover. We didn't even talk about micro lending, which is related to this UM And actually micro lending is another example of sort of a micropayments like system that has been fairly successful. And Uh, Stuff you should Know did a great episode about micro lending. It's an older episode if you guys have not heard that. First of all, you should be listening to Stuff you

Should Know anyway, because it's a great show. But that particular episode is is very UM particular episode in particular that it's both repetitive and redundant um that. Let me reiterate, the episode is very very good. And and Stuff you should Know even has their own Kiva project charity that or micro lendings uh project that that was incredibly successful

and continues to be very successful. So I suggest you listen to that episode and we'll probably do an episode of micro lending ourselves at some point talk about kind of the technological aspect of it and how that whole model developed and how technology has really enabled that model to to flourish, because it's one of those things that's

much more difficult to do without the aid of the Internet. Yeah. Well, I mean even in the political campaign for the two thousand and eight elections and and forward and more recent in the United States, a lot of the candidates were raising dollars and twenty dollars at a time, which wouldn't make a big deal to a candidate who needs millions of dollars to in in their his or her war

chest to attract voters. But when you have millions of people donating ten or twenty dollars, that makes a huge difference. That's going to be the norm now. But you know, that's really when it kicked in, and that's kind of a micropayment. It's not you know, in the cents to

two dollars to three dollars realm. Right. Still, in terms of the big picture, it is, yeah, considering that you're talking about you know, and when you think about political donations or or contributions to a campaign, you're usually talking about thousands of dollars. So yeah, it's it's and you know, it's it's difficult to implement that on a non technological basis.

I mean, you have to have an army of volunteers marching door to door and uh and you know risk being yelled at, but you never know who are who are who are supporting the other party. Well, we're gonna wrap this up, but if you guys have any suggestions for topics we should tackle, or if you have your own thoughts about micropayments, micro transactions, micro lending, that kind of thing. Um, you know how it works or maybe

how it doesn't work, let us know. You can drop us an email that addresses tech stuff at how stuff Works dot com, or let us know on Facebook and Twitter are handled. There is tech stuff each sw and Chris and I will talk to you again really soon. Be sure to check out our new video podcast, Stuff from the Future Joint House Stuffork Staff, as we explore the most promising and perplexing possibilities of tomorrow. The House

of Works iPhone app has arrived. Download it today on iTunes, brought to you by the reinvented two thousand twelve camera. It's ready, are you