Kamikaze Marketing (why usage billing kicks freemium's bottom) | Hacker News Reader

Kamikaze Marketing (why usage billing kicks freemium's bottom)

lmframework.com

37 pointshymanroth17 comments

Micro billing is an interesting model. But I think he "underestimates" the mental burden of checking whether a particular service or content provider is billing me correctly. Flatrate tariffs are popular for a reason.

It makes me uneasy to think that 40 different websites would use my credit card details to bill me whenever _they_ thought I had used their service.

Of course, there's a way to lower that mental burden by introducing a middleman. Someone who would run an application/content provisioning platform and hence would be able to check all usage data, enforce contracts and resolve conflicts.

Guess what LM (the author's company) does. On their "vision" page (http://lmframework.com/page.php?id=vision) they say "Our kids will not access multiple websites. They will simply use their favourite stream manager". So I guess LM would be that "stream manager", gatekeeper to what was once known as the web.

It seems likely that a model like this will be popular for some sorts of services. But I very much doubt that LM will play that role.

So many people want to be the platform on which everything runs, the store in which everything is sold, the gate through wich every HTTP message passes, the cloud in which all our data lives. Microsoft, Google, Apple, Amazon, they all want to be that.

Micro billing may be a good idea, but starting a company that aims to be the new mother of all platforms, including a new business model, application provisioning model, data model, application development paradigm and what have you, that's a Kamikaze business model if I have ever seen one. http://lmframework.com/page.php?id=lmf

The only advantage to the "streaming model" they give is that it allows you to pay for stuff. I very much doubt that is a major issue for kids today. Also, it evokes this picture of passive consumers, as if they really only thought "let's take satellite TV to the internet". The internet is not TV.

Thanks for a great comment.

It's true that we are attempting to solve quite few problems in one go, but this just reflects the nature of the challenge - rather than any particular desire to blow ourselves up.

If you look at AWS, they spent $2 billion implementing their vision of cloud services. They understood that you can't just graft a business model onto existing technology, so they created a platform where the technology and revenue system go hand-in-hand.

We're trying to do something similar for the browser. We don't aim to own or dominate the platform. It will be very open, with space for any number of compatible billing systems.

i found the articles interesting. i say articles because i clicked through to another one of the author's articles, as well as clay shirky's 2000 post.

http://lmframework.com/blog/2009/06/freemium/

http://www.openp2p.com/pub/a/p2p/2000/12/19/micropayments.ht...

i thought the post provided a fair bit of detail and discussion. it wasn't fluff, though also not flawless.

The "micro billing" proposed in this article is composed of micropayment that are tallied in the background. As far as I can tell, the only difference between microbilling and micropayments is that there's no confirmation dialog.

You're still deciding every day whether or not to spend the 20 cents.

Micro payments is to Micro billing as web 2.0 and web 3.0 (yeah they are both bull shit)

I disagree. My interpretation of Shirky's thinking is that the dialog is the issue, rather than the payment size.

The key is to create an almost friction-free and fair method of payment. People are happy to pay a fair amount for content (cf. the piracy argument) as long as it's hassle free.

The usage component is essential so that people don't end up paying for services they don't use. If you stop using a service you stop paying for it. No lock-in.

When the author submitted his previous article I replied here at HN with the Clay Shirky link and a thought experiment. I like how the new article contains the Clay Shirky link and a thought experiment but doesn't mention Hacker News, or the discussion we had here, at all.

Anyway, I predict failure. Let me know when there's stock I can sell short.

David,

When I wrote the original article I was already aware of Shirky's views on micro payments, but it's true that the comments both here and on my blog made me understand that this issue was more important than I had previously thought - and so for that I am certainly grateful to you.

As to my use of a 'thought experiment' - well I've been doing them ever since I tried to get my head around relativity 20 years ago. I can't remember if Shirky uses a thought experiment in his original article, but even if he does, I don't see it as being particularly relevant.

As to you wanting to short our (yet inexistent stock) - well, I can see you're upset, but isn't that a bit harsh?

For an interesting take on microbilling in combination with web access have a look at Ted Nelsons work.

Thanks, will do

Problem is trust. You need to be a well-established retailer before well-established banks will allow you to charge credit-cards for an arbitrary amount without explicit permission.

There will always be explicit permission from the consumer.

But you're right about trust. For this reason we are not trying to roll this out ourselves.

Microbilling in the form presented in the article is still so unpopular as a method of payment that I doubt its worth considering at the moment.

How can a model that has never been tried be unpopular?

really tasteless (and unfitting) comparison. and your blog is ugly.

The term 'Kamikaze' crops up frequently in the media out of its original context. For example, the UK chancellor used the same term to describe the bankers who created the housing bubble (http://bit.ly/Qdmlj) - so I don't see how it can be tasteless.

I'm sure if a company started giving away free cars in the hope of charging for premium petrol then they would probably attract similar (if not stronger) adjectives. And the workers in the plants making cars for money would certainly get caught in the shrapnel.

As for my blog being ugly - I couldn't agree more.

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