Micropayments for Digital Goods in a Social World


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Anything that can be digitized will be napsterized. Kachingle is a business model for the inevitable future of "free". For a version of this presentation with an audio narrative please visit http://blog.kachingle.com/?p=478.

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Micropayments for Digital Goods in a Social World

  1. 1. Micropayments for Digital Goods in a Social World 10/20/09 by Cynthia Typaldos, Founder & President, Kachingle 10001001010011001001000100101111100011001010001010010100010000100000… 9/21/2009 9:10 PM
  2. 2. For news and content sites, advertising is not paying the bills. The Problem
  3. 3. Theorem Anything that can be digitized will be napsterized Newspapers Magazines Books Music Photos, Images, Art Video, TV, Movies 10001001010011001001000100101111100011001010001010010100010000100000… FREE! Previously - $$$$ or € or ¥ or..
  4. 4. iTunes, Kindle, iPhone are just plugging holes in the dike…
  5. 5. Micropayments sound good BUT… “… the act of buying anything, even if the price is very small, creates what Nick Szabo calls mental transaction costs , the energy required to decide whether something is worth buying or not, regardless of price” — Clay Shirky http://www.shirky.com/writings/fame_vs_fortune.html
  6. 6. Are there parameters for success? <ul><li>user-centric </li></ul><ul><li>no “mental transaction costs” </li></ul><ul><li>tap into existing social networks </li></ul><ul><li>financial transparency </li></ul><ul><li>fun, entertaining, like a game </li></ul>
  7. 7. beside advertising…what are the choices? Micropayments Tipping Subscriptions Kachingling
  8. 8. individual consumer/ user producer Whose value system is applied? Ease of use (reduction in “mental transaction costs”) difficult effortless Micropayments <ul><li>Decide each time </li></ul><ul><li>At price set by producer </li></ul><ul><li>No financial limits </li></ul><ul><li>Encourages copycat sites (e.g. music biz) </li></ul><ul><li>Creates barriers for viral & social behaviors </li></ul>beside advertising…what are the choices? <ul><li>Decide each time </li></ul><ul><li>At a price explicitly set by user </li></ul><ul><li>No financial limits </li></ul><ul><li>Co-exists with advertising </li></ul><ul><li>Enables viral & social behaviors </li></ul>Tipping Subscriptions <ul><li>Decide once (for each subscription) </li></ul><ul><li>At price set by producer </li></ul><ul><li>No financial limits </li></ul><ul><li>Encourages copycat sites (e.g. music biz) </li></ul><ul><li>Creates barriers for viral & social behaviors </li></ul>Kachingling (crowdfunding) <ul><li>Decide once (for everything) </li></ul><ul><li>At a price implicitly set by user (equitably distributed) </li></ul><ul><li>Financial limits (bounded total $) </li></ul><ul><li>Co-exists with advertising </li></ul><ul><li>Enables viral & social behaviors </li></ul><ul><li>Social recognition & association </li></ul>
  9. 9. Kachingling is two-sided Site Owners (producers) Kachinglers (consumers) Note: someone can easily be both!
  10. 10. Kachingle 101 for Consumers
  11. 11. Kachingle 101 for Consumers
  12. 12. Kachingle 101 for Consumers
  13. 13. Kachingle 101 for Consumers
  14. 14. Kachingle 101 for Consumers
  15. 15. Kachingle 101 for Consumers
  16. 16. Kachingle 101 for Consumers
  17. 17. Kachingle 101 for Consumers
  18. 18. Kachingle 101 for Consumers
  19. 19. The Kachingle Medallion on a Content Providers’ Site
  20. 20. List of Kachinglers
  21. 21. <ul><li>Push status updates through microblogging sites </li></ul><ul><li>(e.g. Twitter and Facebook status integration) </li></ul><ul><li>Development of social media applications </li></ul><ul><ul><li>Facebook app for comparing your contributions to friends and expressing your values </li></ul></ul><ul><ul><li>iPhone app </li></ul></ul><ul><ul><ul><li>Live access to statistics </li></ul></ul></ul><ul><ul><ul><li>Compare your behavior to others </li></ul></ul></ul>Social Media Integration
  22. 22. <ul><li>NOT content </li></ul><ul><li>BUT to build an online persona, achieve recognition, gain status – just like in the real world </li></ul>What Will Consumers Pay For?
  23. 23. Kachingle to 'sprinkle' dollars to online publishers c|net May 8, 2009 Paul Romer , economist and senior fellow at the Stanford Center for International Development “ (Kachingle) doesn't try to solve the underlying free-rider problem. It tries to use volunteerism, altruism, and good citizenship instead. I like this aspect of the model. Economists and the policy makers who listen to them frequently underestimate the potential for this kind of motive to solve problems.” Kachingle is the economic model for free
  24. 24. <ul><li>… in alpha test mode, launching later this fall </li></ul><ul><li>… available worldwide </li></ul><ul><li>www.kachingle.com </li></ul>Kachingle Status