Tuesday, September 16, 2008

The Platform Is There

Before Scott McCloud became Google's latest PR writer, he also wrote a comic about revolutionizing the online content industry by getting rid of the distribution and billing middle men without making every second word an ad, and without making copyright infringement the only way to get cheap content. It wasn't the first treatise about micropayments, but it was certainly, format-wise, a novel one, and makes a good case for what kinds of new media models would be possible if there just were such a micropayment platform so you could pay a couple of cents for an online comic. Now it is 7 years later, which is like 40 in web-years and 20 in mobile years, and there is no ubiquitous micropayments system around, really. Well, no, there are actually several, but all but one are hideously underused in the US and most of Europe and have almost no presence on the web. That last one I mentioned? It's about to wipe the floor with everything and is making its owners already a lot of money and its customers happy.

Of course, on the web the biggest need for micropayments was taken over by Google that created a whole ecosystem around paying people pennies for content as long as the visitors clicked ad links on the content. Sure this existed before Google, but Google's version made the biggest reason to loathe ad-supported content, which was screaming banners and pop-under/over ads (anyone remember X10?), go away. Now Google's micropayment system for content suffers from being opaque (how is Google choosing what ads to display?), prone to fate (will your visitors click on ads or not?), and being gamed by all parties to the hilt.

Meanwhile, Apple has trained gazillions of Internet users to pay a couple of dimes for content with just a click by using its music store, and shown the world that if you make content cheap, convenient, and predictable to get, consumers will flock to it over piracy, proving that a good micropayment system for content works. Of course, Apple managed the hardest part, ubiquitous billing, by tying every one of their delicious music players to iTunes, creating a convenient place for a user to get their individual billing identification (an Apple ID) and store their payment info, be it PayPal, credit card, pay as you go account to top up with gift cards, or whatever payment back-end works in the local country (like clickpay or whatever I am using here in the UK). Once this platform existed it was easily extended to allow payment for wireless music shopping, or little games and other apps on the iPhone. Steve announced that they had tens of millions of credit card numbers stored on Apple's servers, which means tens of millions of accounts primed to buy content for just a few dimes at the flick of a finger. Users are happy because they do not pay much, content providers are happy because they get paid, Apple is nice enough to take a minority cut, and suddenly an ecosystem is viable. And apps get to be cheap.

So of course now every operator and phone OS creator wishes they had a download store for apps too if they didn't already have one. Microsoft posted the ads looking for people to build it, I think Sprint is looking into one as well. Of course, just putting your apps up on a page on the device doesn't work: you have to make it convenient, cheap, and predictable to pay for an app. It has to be an impulse buy. Nokia has had an app store on the N-series devices for quite some time but 1) every time I start it somehow it needs to update the catalog. This requires me to click to confirm three times. The update always fails (inconvenient) 2) The previews never work (unpredictable what I am buying) 3) When I was ready to buy something in the US, it wanted me to enter my credit card an billing information. On a phone keypad. Yeah right. (inconvenient) When I was ready to buy from another producer in the same store, it wanted me to do it again. In the UK payment is through sending me an SMS that gets charged to my phone bill. Except I got the confirmation twice, for each purchase I made, so I am still unsure if those games cost me £5 or £10 - T-Mobile makes it really hard to check your itemized bill for that (unpredictable and not cheap).

So, yes, the mobile would be an ideal micropayment platform: they have your payment info, or you have a pre-paid budget set up. Billing actually works, as the millions of dollars in ringtones and ring-back tones and wallpapers and games bought demonstrate. Yet Apple's app store is sudeenly the one everyone wants to emulate now, even though everyone else has had a head start. My sister in the Netherlands has an N73, like me, but she has no Download store, because Nokia consented to have this 'multi-media computer' (Nokia's term) sold through the operator Ben without a data plan. No data plan, and no untlimited data plan, means app stores are a bad customer experience because you get charged for just browsing the goods. But now my sister cannot get games, unless she goes the pirated route. Apple makes sure every iPhone has a data plan to make app stores viable and manageable. That is how you create a an ecosystem.

There's a lot more to say about using the mobile as a micropayment platform, even for the web, and what it takes to do it right, but I will leave that for later. I do want to leave with a thought for people who have been watching since 2001: Amazon is doing a mobile content delivery system too, with Kindle, which also has your payment data stored, is pretty predictable with its previews and reviews for content, and is not that expensive. But would I want beautifully inked comics on it? No. Would I want them on the iPhone? Not on this year's model, certainly. But in two years, when the glass is closer to 300 dpi in color? For 25 cents an issue? Marvel or DC's or anybody else whole back-catalog available to surf and subscribe or buy per issue? Penny Arcade delivered every week ready to go, with commentary, but no ads? Hmmmmm... I wonder who has the platform ready to go...