Somebody in the media industry tell me I'm wrong, but I don't think news companies (e.g. your customers) actually <i>want</i> this.<p>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.<p>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.<p>This sounds a lot like cable "unbundling", which consumers want (or say they want) but Comcast will offer it over its dead body.<p>Now maybe you can sell this to independent blogs. But TipJoy (YC 08) tried that and went bust, so it's an uphill road.
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.
You should look at <a href="http://blendle.nl" rel="nofollow">http://blendle.nl</a> 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.
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.<p>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.<p>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.<p>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.
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.<p>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.<p>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.<p>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.
Currently this kind of embedding (user interface) could cause some problems in some countries like Germany.<p>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.
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.<p>When such payment systems spread, couldn't they overburden the system?<p>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).<p>What do you think/know?