From the examples of cable TV, newspaper and magazine subscriptions before that, and subscription streaming video services today, I have to suspect that this sort of thing wouldn't yield "an ad-free Internet". You'd pay, and get ads too.
From a business perspective, there's always some price the business can charge that would make running adverts comparatively unprofitable. This price might be very high, but it's not infinite. I'll agree that many existing "subscription" services that also run adverts despite you paying the subscription, which is just frustrating.
In order for that to be the case, subscribers would have to actually stop paying once ads are introduced. Otherwise, the service gets to keep the premium-subscriber revenue stream and gain the advertiser revenue stream too.
With apologies to Kipling:
It is always a temptation to a paid-subscription station
To reach out to its audience and say —
"Thanks for paying for our site! We'll be running ads tonight;
We are betting that you will not go away."
I have heard some about Wireless Application Protocol (https://en.wikipedia.org/wiki/Wireless_Application_Protocol) having some similar features and people not liking them. The ringtone industry used this essentially to charge people high fees on products that consumers were not aware of (see: https://en.wikipedia.org/wiki/Jamba!#Controversy). Carriers getting a commission on services sold this way likely caused a lot of the problem, so this could be important to avoid in a similar implementation. Great post!
Oh this looks cool, thanks for the link! Interesting to see something similar and how that worked out.
Jamba! had drawn criticism for allegedly misleading customers in its service advertisements. In general, Jamba! services were sold as a subscription, despite advertising that seems to imply that customers are buying a one-off phone ringtone.
I couldn't find anything about purchases/subscriptions in the WAP Wikipedia page?
Browser support doesn't seem necessary for this if it was a viable model. Websites could do something similar with minimal friction using Stripe (for example, instead of a subscription paywall, you could have one-click payment for the one article). There would be some setup, but it would mostly be "put your phone number in and then type the SMS code" once per site.
I wonder how much of this is the difficulty of deciding if a single article or video is worthwhile. If I'm a heavy NYT reader, I can predict that the whole subscription is worth it, and if an individual article turns out to be uninteresting, I can just read a different one. But if I spend money on a single article and then it's uninteresting, it feels like I wasted money. This would feel particularly bad if I get charged automatically as soon as I click a link.
I'll agree that browser support wouldn't be required, but I've got a feeling that browser support would reduce the friction past some threshold and make this "enabled by default". The number of people with a Stripe login is strictly less than the number of people with a browser, so requiring a Stripe login would be some amount of extra friction. These feelings are weakly held though.
But if I spend money on a single article and then it's uninteresting, it feels like I wasted money
I feel like this might end up being a good thing. If you consider a subscription as a low-frequency high-risk high-reward bet (you could lose the value of the subscription, or gain the value of multiple articles), and many one-off payments as high-quantity low-risk low-reward bets (at worst you lose the value of one article, at best you gain the value of one article), then having multiple bets will give you more information about the underlying distribution. Practically, I imagine that I'd discover whether or not I like a publication faster if I can purchase a couple of low-risk articles rather than having to spend the full subscription fee.
You certainly can spend money on an article and later regret it, but this argument applies equally to subscriptions. Except with subscriptions, you've wasted significantly more money.
This would feel particularly bad if I get charged automatically as soon as I click a link
Agreed, having read your case I now think automatic charging should be off-by-default, so you only enable it for websites you've got high confidence in. Note the parallel with subscriptions essentially being on-by-default.
I like the idea.
But unfortunaly my expectation is that your grandma would receive an email with a link HTTP 402 asking for $1,000, which she would validate with an accidental click. Then, even if regulations stated that the bank must refund the customer under such circumstances, the bank would reject all your claims. You'd hire a lawyer for a significant amount of money and, if you're lucky, your grandma would get refunded two years after she died, but the process would be hard to make financially worthwhile. And if you're not lucky, you'll just lose another $3,000 in legal fees.
I'm afraid that's the world we're living in.
I agree about grandma getting scammed, but I think you're wrong about the banks. Credit card refunds are already trivial, and the customer almost always wins (even when their bank thinks they're committing refund fraud). The problem is that the banks know that these charges will have a high chance of fraud and they will charge high transaction fees to cover the expected losses.
Nobody wants grandma to get scammed. But I feel this is a false comparison, the real comparison would be against the grandma's who are today paying for multiple $20/month subscriptions because they got signed up and can't figure out how to unsubscribe.
I agree with Brendan Long below, and while there are always horror stories, I don't think most banks want the bad press of bankrupting grandma.
It does feel like that would be the fairer way. But I don’t know the value of any particular article, and I will be much less likely to read them if it incurred me additional costs. I think most humans prefer a subscription to not have a marginal cost to use what they enjoy / find useful. Then it’s not really an infrastructural problem.
It might feel like extra costs in the moment, but I doubt it would end up being more expensive, since you're more able to "fine-tune" what you're paying for.
I think most humans prefer a subscription to not have a marginal cost to use what they enjoy / find useful
I disagree here, I feel like I regularly see people online complaining about needing a subscription for everything nowadays, and also about the price of those subscriptions quickly adding up to large amounts.
Note: I'm writing every day in November, see my blog for disclaimers.
Crypto could have been really good, before it became a synonym for scams and money laundering schemes. Having a native currency for the internet could have (and I guess, still might) enable many interesting innovations, such as allowing for significantly cheaper and smaller transactions. The high friction and financial cost of doing small (<$5) transactions is, I argue, a reason why subscriptions are the dominant form of payment on the internet nowadays, instead of once-off payments. Many internet-based products have very small unit-prices (e.g. one YouTube video, one essay, one search result), and because it’s infeasible to charge for these individually, we end up with subscriptions and adverts.
I’m aware that it’s much nicer for a business’s cash flow to have monthly subscribers that semi-reliably make payments. It’s terribly inconvenient to pay for fixed operating expenses (payroll, rent, etc) with unpredictable revenue. But what’s the cost to the business of these niceties? I’d certainly pay for more internet services if it were easier to do once-off payments. The existence (and success) of micro-transactions lends evidence to how many small payments can still be profitable as a business model. I’m not 100% convinced that many small once-off payments would be more profitable than subscriptions, but I’m fairly certain.
Imagine this scenario:
Today, you’d either already have a subscription and log in, or you bounce from the article. Occasionally, you might sign up for a subscription. But in Boyd’s alternate timeline with easy & cheap transactions:
HTTP 402: payment required response to your browsernytimes.com domain, so long as it’s less than $1.50This works out quite well for all involved. The readers don’t get bombarded with popups asking for subscriptions, and also get to read the thing they wanted to read. The journalists get paid. The NYT gets incredibly detailed insight into how much people are willing to pay for individual articles. More precisely, this mechanism has created a very precise market for individual articles, ideally leading to a more efficient allocation of resources.
This of course has security risks, since an attacker can now transfer funds via a well-placed HTTP response or browser exploit. I’m not sure about a good solution to this. But web servers are incentivised by their reputation to be secure (not that this is fool-proof). Web browsers could ship with very low cash-transfer limits by default, and require a password before any payment is made.
Beyond these significant problems, I would personally love to pay some once-off price for ~every article that I get sent, but subscribing to every news platform, substack, streaming service, etc is too much for me.