The Micropayment Alternative

Advertising became the business model of the internet because we did not implement micropayments. However advertising has created perverse incentives and it is time we returned to the original idea of the founders of the World Wide Web and build micropayments solutions for the internet.

This article was first published in The Mint. You can read the original at this link.

There was a time before search engines and social media when we had to actually type out URLs to navigate the internet. In those days, spelling mistakes would land you in little hypertext dead-ends - pages cryptically titled “404 Error: Page Not Found” that told you that even though you were connected to the correct server, there was no page there corresponding to what you had typed out. Standard response codes, like this, are part of the core design of the internet. A “401: Unauthorised” page says you need the right authentication to proceed while a “403: Forbidden” page indicates that access to that page has been disallowed.

Today, we largely access the internet through platforms. These web services are so well designed that whole generations of internet users have never even seen a standard response code. But there is one standard response code that even old-timers has never come across - a code that referred to a core feature of the internet, that has still not been built out.

The Original Vision

Tim Berners-Lee (inventor of the world wide web) and Marc Andreessen (inventor of the first browser) believed that it was essential that the world wide web enabled micropayments that would authorise access to individual pages on the payment of a small fee. The 402 Error page was supposed to indicate that the page you were trying to access required a payment. Bankers, however, dragged their feet on this feature and as a result, even though the error message is hard-coded into the core design of the internet, micropayments for page views remains a feature that is still “reserved for the future”.

As we all know the internet went on to become the most efficient content distribution technology ever invented. Creators amassed vast audiences that voraciously gobbled up all they were served and as these audiences grew, the lack of monetisation began to chafe. Creators were putting a lot of effort into generating content but couldn’t benefit from the eyeballs they were attracting. It was out of this that the online advertising industry was born.

Advertising or Subscription

As regular readers of this column will attest, I am not a huge fan of monetising content through advertising. As I discussed in an earlier article, technology companies have designed their interface to entice us to stay on their service for longer than is necessary:

Every app on our home screen has been engineered to entice us, from the colour of the notification button to the variable rewards schemes that they deploy—every tiny detail has been carefully crafted to keep us coming back. When we think we are acting of our own volition we are, in fact, being carefully manipulated by teams of highly skilled developers who have designed their tech to push our psychological buttons.

In this sort of an environment, when creators are rewarded solely for the interest that their content generates, they are incentivised to make material that appeals to the basest human instincts - that is most outrageous. The real-time feedback that online advertising provides creators skews incentives even, further forcing them to disregard their creative instincts in favour of material that attracts the most eyeballs or has more stickiness. This is why so much online content appeals to our prurient tastes and is designed to address increasingly narrow and controversial viewpoints. And what has lead to the creation of echo chambers and intolerance online.

In recent years, subscription has become a popular alternative to advertising. Most newspapers have erected paywalls that ensure that their content is not accessible without to anyone who has not paid for it. Newsletters, such as Substack (through which you are receiving this newsletter) and Revue, have made it possible for independent writers to set up paid tiers for exclusive content that is only available to subscribers. Platforms like Patreon offer similar services to artists across a wide range of creative categories - podcasts, music and film - allowing them to create exclusive content for fans who are willing to pay for them.

These platforms give creators more direct control over their output, offering them mechanisms through which they can be paid for the content they create rather than being forced to only create content that advertisers dictate. And because even a relatively small online audience can generate significant revenues many artists are able to sustain their creative projects in this way.

I liked this model so much that in a recent article I argued that it was the business model for the internet of the future. I was convinced that the direct connection this facilitates between artists and their audience was exactly the sort of counterpoint we need against the harms of online advertising.

The Micropayment Alternative

However, as I started to sign up for more and more subscriber only content I began to realise that this model forced me to only consume content from creators I pay for. The more newsletters I signed up for, the more I realised that there was a limit to how much paid content any one person can consume - which meant that I was missing out on creators I liked, but just not enough to spring for an annual subscription.

What the internet needs is a micropayments solution for small nuggets of information. Rather than subscribing to a year’s worth of writing from a limited selection of preferred writers I want to be able to make small micropayments for any article I like. The payment should be small enough to not make me think twice before reading it but yet large enough to allow artists to live off the scale of audience that the internet can deliver.

This is the model that services like Blendle have been looking to build. The arrangement they have with the hundreds of newspapers and magazines they have signed on allows users to make micropayments for the individual articles without forcing them to pay for a whole issue. It is easy to see how this model can be deployed across a range of content categories - and how artists and fans alike can benefit.

This is how the internet was designed to work. It is why the 402 error page was written into the core design of the internet in the first place. Just because the original designers of the internet were unable to make micropayments a reality doesn’t mean we should stop trying.