<MoneyLab> Web3 and pnline publishing/paid content

[Geert Lovink]

Dear all, I am not sure how many of the MoneyLab network are following—let alone shaping aka criticising—the cryptofication of online publishing. I want to mention a more or less random project: https://tabula.gg/ ("Instant web3 publications for writers, DAOs, and any Ethereum-based account.”). On the Read2.0 list (occupied by mainly senior US publishing professionals that still use email and know the high art of email list community exchanges and maintainance) there have been recently some interesting threads about NFTs in relation to past attempts to let readers pay for individual content in a P2P fashion. I am copying some the postings below. Best, Geert

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Re: [read20-l] Why NFT Creators are Going cc0
To: John Pettigrew <john at wearefutureproofs.com> Cc: 
Reply-To: Samir Patil <samir at stck.me>

1. Payments based platforms can at best keep 4-5 percent of transaction (stripe) and even that will tend towards zero as public utility digital payments get rolled out. Right now platforms keep 100 percent of ad revenues. This makes them insanely more profitable than any other previous ones. Thisbis also why FB/insta/google don’t support payments. Who wants a business model to switch from 100 percent to 5%. 

2. The flip side of 1) for writers or other creators is that they can be viable at far smaller number of fans and readers. They don’t need to scale to millions of eye balls for some sponsorship money. Substack, patreon etc are early models of this. Web 3 can help in some more situations. 

Agree that any market economy has “increasing returns on scale”. That’s a problem but a different one - Barnes and
Noble originally ate up the small bookshops. However the internet has seen even greater concentration of power. Not all will be solved by payments being easy and default but at the very least 3 platforms should not control majority of distribution and dollars. 

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Reply-To: Samir Patil <samir at stck.me>

Agree with the challenges of micropayments for content. But the point about payments being built into the design of the next internet is much broader than that. 

1. Payments (not micropayments) between buyers and sellers is essential for market mechanism to work. This will allow for a far greater variety of content to come up than internet funded purely with advertising. Or for that matter only on subscription based offerings (those work for already well known brands and individuals). This to me seems axiomatic. The current overly centralized platforms derive directly from this design gap. 

2. Agree with Bill thay the current internet has super high transactions costs however that’s true mostly of US and Europe where payments flow via the credit system not interbank one like china’s massive one and India’s UPI. The US has been slow to adopt perhaps because of strong bank lobby but a new system for super low transaction cost will be out soon (FedNow)

https://www.pymnts.com/news/faster-payments/2022/fednow-progress-instant-payments-may-weaken-case-digital-dollar/amp/ <https://www.pymnts.com/news/faster-payments/2022/fednow-progress-instant-payments-may-weaken-case-digital-dollar/amp/>

In the est of the world these work for both micro and macro payments. And they are widely used by everyone from vegetable vendors to big tickets consumer electronics. In india, lowest size of transaction is ten cents and it’s part of your bank account. Transaction fee kicks in for higher amounts. 

The Chinese and Indian systems are an evolution of mPesa that has been around in Kenya for decade or more. 

Like cash digital payments are a public utility and should not be that profitable ever. This helps everyone other than the banks. 

https://www.statista.com/statistics/1225934/india-upi-transaction-volume/ <https://www.statista.com/statistics/1225934/india-upi-transaction-volume/>

3. Agree that even in the light of this new payments infrastructure the history of payments for individual pieces of digital content is bleak and one should be skeptical.

As Bill outlined, in many cases this is purely because bundling + subscriptions just works better for consumers (newspapers, Spotify, Netlfix). However, a lot of this is also because frictionless payments of zero or low transactions costs did not exist for digital goods and services. Just like in the real world we have a variety of models built on a simple mechanism of cash. Not sure why that doesn’t work on line even for the content business. In fact from China which is furthest down this path of adoption we have many examples of platforms based on direct payments. Including many that have no counterparts in the west. For example, Zhihu paid quora (experts get paid per question), Ximalya (audio stories), even web novels (closest US example is Dreame). 

The experimentation with online payments not advertising at its heart is too early even in China to declare victory for one or two dominant models or to predict that it won’t be as vigorous and diverse as the physical world. 

4. You will notice that all of this was happening without any Web 3 technologies. The fundamental driving force I would argue is that Google/FB make all the money (other than YouTube everyone else keeps 100 percent of as revenues) and individual creators do all the work. Even Kindle keeps 35-70 percent of author revenues. 

5. To keep this short I am not adding arguments for why web 3 or parts of it are essential to solve the dilemma of online content on web 2 - massive audience yet zero money to sustain creators. To be clear, for me at least, crypto currencies are definitely NOT the essential part On that agree with everyone that those unregulated scams have gone on for so long is a scandal. 

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Reply-To: billr at giantstepsmts.com

I'll leave it to others to judge whether I qualify as smart, but here is my take on the micropayments issue, after having seen it fail time and time and time and time again. 

I agree that subscription-based models can't keep on growing limitlessly and are bound to hit a wall (pun intended). They arose because there are sufficient numbers of people with disposable income who are tired of being barraged with ads (leaving aside that some subscription services have ads anyway). But micropayments? I've lost count of the number of technological innovations that were supposed to enable them at scale and then didn't.

From where I sit, there have been two primary problems with micropayments:
1. Floor on transaction costs.
2. Annoyance factor: with subscriptions, you know how much you're going to be charged every month. With micropayments, you don't.

It's possible that blockchain technology lowers the floor on transaction costs someday, but I don't see it right now, certainly not for anything that involves smart contracts. (And let's not forget the environmental costs.) Some of you know more about this than I do; feel free to disagree. The fact that blockchains are ownerless presumably displaces at least some of the transaction costs, but I don't see this as much different from the situation that we all talked about back in the 2000s when the phone companies were going to process micropayments for content charges so that they'd appear on your monthly bill, and nobody cared.

As for the annoyance factor, I don't see how Web3 does anything to make that go away. Let's remember all of the micropayment models that migrated to fixed-rate subscriptions precisely because of this. Long distance phone calls migrated to fixed-rate monthly plans (before going to free in many cases). Same with info retrieval services like DIALOG. A couple of digital music startups during the late 2010s appeared with 10-cents-per-stream type models; all failed as the $10/month services rose. 

The only services with micropayments-type models that I can think of today are those few that are universally loathed and only exist because there are no reasonable alternatives. My favorite example is PACER, the antiquated system that U.S. courts use for access to court filings, which charges 10 cents per PDF page. I use it all the time, because I need to look at court filings and can't afford an extremely expensive subscription to a service like Westlaw or LexisNexis that comes larded with a million extras; I get monthly bills that vary from zero up to maybe $100; and I'm annoyed every time. I also subscribe to a neat little service called DocketBird that enables me to follow court cases, sends me alerts when new filings appear in cases I follow, and lets me pull those documents up from its user interface -- incurring charges to my PACER account unless someone else happens to have downloaded the same document in which case it's free (i.e. it caches those documents). It also has a nice search interface for finding court cases, much nicer than PACER's. For this, DocketBird charges me $25/month, and I'm not annoyed.

- bill. 

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Reply-To: Samir Patil <samir at stck.me>

> On Aug 8, 2022, at 12:01 PM, John Pettigrew via Read20-l <read20-l at mailman.panix.com <mailto:read20-l at mailman.panix.com>> wrote:
> 
> To rebut: the absence of market-like features from the internet and from the web is not a defect, but is by design. The web was never intended to be a marketplace, and many of the problems we now have on the web are due to a large number of organisations trying to make it behave like one.

To raise the controversy next level :) I would argue. 

1. It was and is a marketplace (since the first ads ran in 1995). It’s become a toxic/peculiar one by design - for data in exchange for advertising. Like most things in the world markets emerge spontaneously when there is demand and supply. We can ignore, regulate, encourage or try to stop entirely. 

2. Payments are a way to broaden what kind of work can be sustained online. For example don’t have to chase millions of eye balls. Someone who has few readers because either their work is difficult or unpopular can still make a living. 

3. Large number of organizations also operate in the non digital world. In the publishing industry, they do good work and bad, can be for-profit or not. But none of them can work by depending on advertising alone. Not sure where this argument goes logically if we insist that internet should be somehow outside the laws of physics/economics and yet produce same results. 

> Markets operate to exclude those who lack the means to participate. No matter how exciting a technology, it will only include people if it's designed that way. If it's designed to exclude then that's how it will operate. To quote Kim Crayton: Tech is not neutral and nor is it apolitical.

The empirical evidence of this is quite the opposite. For example, I would argue markets plus public institutions have made books of substance available at zero (library) to expensive but still affordable by middle class prices for a long time. If you want to consider counter examples think of how little access exists and existed historically outside of western market economies. Even today minus the knowledge generation and dissemination pipeline of the west the whole world will be poorer. All of the entities in this context operate in a market economy and taxes. 

The internet has expanded access to information but the quality of a lot of it is parasitical/dependent on the physical worlds ”old media” - which worked on basic market principles. Native internet cannot do that without payments and other moving parts of a normal economy (Netflix/HBO/Criterion vs tiktok, you get what you pay for). 

> Now, Ron addressed some of these issues explicitly earlier in this thread, but his analysis (I believe) missed something. If we want new technologies to be a way for outsiders to gain access to privileges they've been excluded from, we have to be intentional about how we design those technologies - intentionally inclusive. If we simply design "cool" "new" technologies, they will inevitably serve the interests of those who already have power. Even if some outsiders manage to get in, that's by accident rather than intention.

Again this is one hypothesis. But the evidence points in the opposite direction. Every new technology creates opportunity for new entrants. Not just new companies but new individuals. The legions of internet stars (for better and worse) And yes they too become entrenched but then the wheel turns. 

> And if we don't intentionally design our technologies to be inclusive, we must be honest with ourselves: that we've chosen to exclude people because it's easier for us, better for us. So we're not building a future for all but only for those who already have the means to access it.

But what’s real world example of this happening? Almost every new technology has taken less time to reach mass adoption (radio, TV, DVD, PC, internet, smart phones) and affordability. By definition every wave has been more nor less inclusive. Yes can be even better but the direction is not wrong. 

> Unfortunately, blockchains and NFTs are simply not designed to be inclusive. Indeed, in most cases, they're designed to be purely extractive and exploitative. Now, I know the folks on this list who are exploring NFTs don't want to build systems like that, but they're working with tools that were designed for that purpose. That means you're fighting an uphill battle from the very start and it's going to be hard work. Not impossible, assuredly, but hard.
> 
> The fundamental problem with publishing these days, it seems to me, is that we're encouraged to ask "how can we make money on the web?" rather than "how can we help people to read our stuff while supporting our creators?" Because the second question is, it seems to me, far more important - whether we're publishing academic research, textbooks, memoir or fiction, the problem is what it always was: reaching readers and supporting creators. And this is obviously because we're employed by businesses, whose purpose is to make money from a seat at the marketplace.

Agree totally on the problem to solve. But that’s what NFTs (and other technologies) are trying to do We can argue about if overkill or efficient or whatever. 

However allowing creators to connect directly with their audience minus Big Tech seems like a good thing. Also not sure how they can support without payments and ownership. Many of the same concepts underlie the traditional world. And that’s what a lot of web 3 technology enables. 

> The fact that our business environment is changing means we have to change to cope with it. This isn't news to anyone. But if we're going to imagine and build a new digital future, shouldn't we try to build a better one, not just replicate the same injustices, with added new injustices?

Let me end with paradox - these injustices and inequalities are the greatest in places which explicitly followed the supposedly non market path (eg India, not just on data but personal experience). I don’t mean to imply that there is no problem to solve of injustice and every problem has a market solution. However to restate the basic case that the internet will do well to enable what we have in the physical world - scarcity, authenticity, and yes occasionally payments for what you think is worth paying for. Like we do in a bookshop. That should not be so controversial or political :)

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Reply-To: John Warren <warren.john.w at gmail.com>

*Non-Fungible Tokens (NFTs) in Scholarly Publishing*
JEP announcement: https://journals.publishing.umich.edu/jep/news/49/ <https://journals.publishing.umich.edu/jep/news/49/>

In the early fall JEP will publish an article by Markus Putnings on the use
of Non-Fungible Tokens (NFTs) in scholarly publishing. We think this is an
interesting and potentially significant issue and would like to invite
others to join the conversation. A preprint of the article, entitled
“Non-Fungible Token (NFT) in the Academia and Open Access Publishing
Environment: Considerations Towards Science-Friendly Scenarios, is
available at: https://doi.org/10.5281/zenodo.6698942 <https://doi.org/10.5281/zenodo.6698942>. If you have an
opinion about Mr. Putnings’ article or ideas of your own on the topic, we
invite you to submit 500 to 1,500 word commentaries that will be considered
for publication along with Mr. Putnings’ article.
Submissions should be made through the JEP portal at:
https://journals.publishing.umich.edu/login/?next=/jep/submit/start/ <https://journals.publishing.umich.edu/login/?next=/jep/submit/start/>.
Submissions received before September 15, 2022 will be considered.

*Related SSP webinar on NFTs and Scholarly Publishing*
I'm planning an SSP webinar on this topic for Oct 25. Markus Putnings has
agreed to speak and I would like to have at least one additional speaker
with a technical background on the topic. No presentation necessary.
We want to keep this informal and chill-- a conversation starter, mostly
for educating people (i.e. early career, but everyone really) on this topic.
The SSP webinar is organized by the SSP DC Regional Group but in this case
will be virtual.
Please contact me if you are interested or if you can recommend someone.

-- 
John W. Warren
Director & Assoc. Professor | MPS in Publishing

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Reply-To: Thad McIlroy <thad at thefutureofpublishing.com>

I hadn't heard about the Pearson NFTs. How amusing. Good recap here:

https://www.theverge.com/2022/8/3/23290335/pearson-textbook-publisher-nft-blockchain-secondhand-ebook-sales <https://www.theverge.com/2022/8/3/23290335/pearson-textbook-publisher-nft-blockchain-secondhand-ebook-sales>

Thad McIlroy

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