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<div class="featured_meta"><div class="meta_article">19 Aug 2002 | <a href="/article/6909?print_version=1">Print <span class="shift_up"><img src="/images/printer_icon.gif" alt="Printer-Friendly Version of This Article" border="0" width="9" height="10"></span></a></div></div>
<H2>PayBITS: Acknowledging the Value of Information</H2>
<div id="article_box_5523"><P>It's time to rethink how we value information, and I have a proposal about how we can do it.</P><P>Some information changes hands at sky-high rates - think about rewards leading to the conviction of certain criminals. More commonly, we have consultants, who may charge $100 or more per hour to convey information to their clients, and niche newsletters with subscription fees in the hundreds or thousands of dollars per year. But how radically does information from consultants or boutique newsletters really differ from the sort of content that appears in TidBITS, Macworld, or even many Web sites?</P><P>In many cases, there's little or no difference. We've been conditioned to value the message by the medium. In part, we pay consultants high hourly rates because they filter information and present it to us in customized ways. Niche newsletters promise a similar benefit, often presenting a single person's view on a very specific field. A paperback book costs less than a hardcover, but the content is the same; we pay more to read the book sooner (plus a little more for the higher materials cost). We pay to subscribe to print magazines, but many of us expect to find the same content online for free, even if we aren't subscribers. We buy CDs of music, but millions of people download music for free from file sharing services.</P><P>I'm all for different business models, but none of the traditional approaches let readers place their own value on content. Instead, value is assigned arbitrarily based on a variety of attributes entirely separate from the information itself. Despite the famous admonishment, we <EM>are</EM> valuing books by their covers. It's time we looked past external factors and put a value on the content inside.</P><P><STRONG>A Fragmented Business Model</STRONG> -- Over the last few hundred years, information has been delivered in collections - the newspaper, the magazine, the record album, the cable television package. That's been necessary in part because the inherent costs in distribution offer economies of scale to collections. It isn't significantly cheaper to distribute a single article on paper than it is an entire newspaper. Couple that with the concept of mass production for a mass market - multiple identical copies of the same item for sale to many people - and you can see why we've ended up with the now-familiar business models for information: per-copy sales, advertising, and subscriptions. When the number of sales are large, the price per copy can be low, which makes it possible to buy a magazine for a few dollars or subscribe to one for a low annual amount. If the audience is sufficiently large or appropriate, advertising sales can make it possible to give the content away for free.</P><P>It wasn't always this way, and in some cases it still isn't. The patronage system was responsible for much of the art and music of the Renaissance, and even now, analyst reports can cost thousands of dollars. The patrons of old and the people who buy expensive reports today share one thing - they place a high value on content.</P><P>I think we need a compromise - a financial model that values content irrespective of the distribution method or the physical medium while keeping that content both freely available and affordable. Many people have said they'd like to be able to pay musicians directly for downloaded music; we're now making a similar approach possible with authors of TidBITS articles. We're calling our foray into this space PayBITS, and in short, it will make it possible for a reader to compensate an author directly for the received value of a given TidBITS article.</P><P><STRONG>The PayBITS Proposal</STRONG> -- TidBITS is free for anyone to read, but we have a history of experimenting with business models. In 1992, when it became clear that we couldn't continue without earning some income from TidBITS, we created our corporate sponsorship program, based on the public broadcasting model (Masterpiece Theater is brought to you by...). As far as we've been able to find, it was the first advertising program on the Internet - a scary move back in the days when the National Science Foundation Acceptable Use Policies were still in place. Then, in 1999, at the instigation of our loyal readers on TidBITS Talk, we started our voluntary contribution program, resulting in over 850 readers contributing directly to the financial survival of TidBITS, with more than 200 people being continuing supporters.</P><P><<A HREF="http://db.tidbits.com/article/02995">http://db.tidbits.com/article/02995</A>><BR><<A HREF="http://db.tidbits.com/article/05565">http://db.tidbits.com/article/05565</A>><BR><<A HREF="http://www.tidbits.com/about/support/contributors.html">http://www.tidbits.com/about/support/ contributors.html</A>></P><P>The sponsorship program keeps the business going, although we subsidize TidBITS heavily with our time - we could all earn much more at other jobs. And the contribution program, though it can't replace the sponsorships, has also provided some extremely welcome income. Although the downturn in Internet advertising has certainly hurt us as well, we've managed to stay afloat.</P><P>What we've never been able to do is figure out how to pay our authors. Our staff already earns much less than comparable positions at traditional publications - there's just no money left over to compensate authors with anything but whatever benefit they can derive from being published. Some authors have parlayed writing for TidBITS - sometimes with our help - into magazine articles and even book projects, but that's always an unanticipated bonus.</P><P>Here's where PayBITS comes in. At the end of appropriate articles in TidBITS, we'll be placing a few lines of text and a link to an Internet payment service that will make it possible for readers to compensate the authors directly. Apart from a one-line explanation of PayBITS for readers who have missed this article, the specific text, suggested amount (if any), and payment service (likely PayPal or Kagi) will be up to authors.</P><P><<A HREF="http://www.paypal.com/">http://www.paypal.com/</A>><BR><<A HREF="http://www.kagi.com/">http://www.kagi.com/</A>></P><P>If you find an article valuable or particularly interesting, especially if it saved you time or money, click the author's PayBITS link to compensate them directly and support the concept that information has real value. The author may provide a suggested amount, but you can pay as much or as little as you feel is commensurate with the value of the information.</P><P>I expect that only a very small percentage of the full TidBITS readership will find any given article sufficiently valuable or interesting to be willing to pay the author for it. That's fine, since in theory, we have enough subscribers for that very small percentage to still be a fair number of people. And of course, since authors aren't earning anything for articles as it stands now, any amount will be welcome. We'll ask authors to let us know how many payments they receive and the total amount to help us evaluate which authors and articles readers find the most useful or interesting.</P><P><STRONG>Concerns and Confusions</STRONG> -- I ran this idea past TidBITS Talk, and the feedback was fabulous (including the name, thanks to Maarten Festen). Most people were highly positive about the idea, but a few expressed concerns.</P><P><<A HREF="http://db.tidbits.com/getbits.acgi?tlkthrd=1696">http://db.tidbits.com/getbits.acgi?tlkthrd=1696</A>></P><P>A few authors said they weren't interested in being paid for their writing, which is fine. We certainly won't make authors participate in PayBITS, though they're also welcome to redirect any payments to other entities as appropriate. For instance, it would have been easy to see payments from Cory Doctorow's article about Hollywood's power play directed to the Electronic Frontier Foundation.</P><P><<A HREF="http://db.tidbits.com/article/06901">http://db.tidbits.com/article/06901</A>></P><P>Some people went nuts with the idea and proposed complex systems by which we'd serve PayBITS pages to readers, sending the final click out to an appropriate payment service. Others suggested we solve the entire micropayment problem. Although I appreciate the potential elegance and utility of such systems, I want to keep this initial phase of PayBITS as simple as possible since we're already overworked. Any infrastructure changes must be designed, coded, maintained, and migrated to any new systems we create. That's just too much right now but definitely something we'd consider for the future.</P><P>I saw some slight concern that PayBITS could affect our editorial mix, but I'm not worried about that, since we've always published what we've felt was important. Plus, even if PayBITS resulted in us publishing more articles that people find useful or particularly interesting, I fail to see the harm in that.</P><P>Others felt that although they liked the idea, they were worried that it might cannibalize the general contributions to TidBITS. I'm not concerned about that either, since I'm thinking that our contribution program will move under the PayBITS umbrella. For articles about what we're doing with TidBITS (like this one) or those written by multiple people (like our Macworld Superlatives articles), we'll point the PayBITS link at our existing contribution program.</P><P>More common was the sentiment that readers didn't want to think about the value of a given article and would instead prefer to pay TidBITS some annual amount and have us distribute it to authors. My response there is that thinking about the value of information is what the PayBITS experiment is all about - one person may find a given article incredibly timely and helpful, whereas it may not help another person at all. If people pay us and we pay authors, we're doing nothing new or interesting, and it would mean more bookkeeping and accounting work than we can afford.</P><P>A few people seemed uncomfortable with the concept in general, suggesting either that we should switch to a subscription model, or that readers might go to other sources for their content. Again, subscription models are old hat, and although they're working a little better of late (a recent New York Times article looked at this trend), they haven't been widely successful on the Internet. I have no interest in switching to a subscription model at this point, since if trends bear out, we'd be lucky to retain 10 percent of our readership. It goes against my grain to keep TidBITS away from potential readers - our goal has always been to make TidBITS as accessible as possible. And as far as people turning to other resources, the entire point of PayBITS is to provide a channel for people to acknowledge the value of information they've already received, not to keep it away from them until they pay. If someone doesn't want to pay, we're not going to make them.</P><P><<A HREF="http://www.nytimes.com/2002/08/01/technology/01ONLI.html">http://www.nytimes.com/2002/08/01/technology/ 01ONLI.html</A>></P><P><STRONG>The Experiment Begins</STRONG> -- All that's left is for us to set aside our preconceptions of the value of content and try PayBITS. I'll report on how it has fared after it's been in place for a while, and of course, if you have any thoughts about it, feel free to send them to TidBITS Talk.</P><P class="paybits">PayBITS: Want to support TidBITS? Consider becoming a contributor!<BR>Click --> <<A HREF="http://www.tidbits.com/about/support/contributors.html">http://www.tidbits.com/about/support/ contributors.html</A>><BR>What's this? Read about PayBITS: <<A HREF="http://www.tidbits.com/paybits/">http://www.tidbits.com/paybits/</A>></P><!-- PayBITS: Acknowledging the Value of Information Adam C. Engst --></div>
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