The Internet: Home of Low, Low Prices [The World of Tech]

Posted by Noah J Nelson on February 17, 2012

Creative Commons photo by Dave Dugdale

Each week in the Game of Buzz, tech and entertainment reporter Noah Nelson looks at how these two forces are changing each other.

In a post at Tribeca’s Future of Film blog this week Chris Dorr laid out a proposal for a kind of “tip jar” for creators whose content is streamed on services like Netflix. In a nutshell: an optional surcharge, say 50 cents, could be applied to a consumer’s streaming bill, and then parsed out amongst the producers whose content they liked the most. The heart of the model is similar to what was proposed by the creators of Readability last year for online news publications, and is another riff on the alluring notion of microtransactions.

While I’m skeptical of a tip jar’s ability to generate a sustainable income for artists, I’ll cop to the fact that I have yet to explore the history of their successes, or failures, online. Perhaps this stems from an equivalence fallacy. I tend to think of internet tip jars as the a form of busking. Maybe it pulls in enough to score a cup of joe and a donut, but to finance a web series? Keep a writer in whiskey and Cheerios long enough to finish a novel? I’ll believe it when I see it.

Still, I don’t want to dismiss Dorr’s idea out of hand. If Netflix were to implement a similar program among its millions of users it could generate some serious cash for creators. Only it would make more sense for Netflix to tithe over a portion of every bill without asking consumers to pony up more: an amount they could use as incentives for producers who cut deals directly with the streaming giant, bypassing networks and studios. Bonus pay for independent producers, put in place to shore up a stream of exclusive and popular content on the service.

What I don’t like, from a consumer perspective, is the voluntary/added charge nature of the proposal. While it would be great for producers, I just don’t see what, other than a clear conscience, a consumer gets out of it. There’s a psychological leap between consumer and patron, and a tip jar is a form of patronage. It would be interesting to see how many people opted in, how many of the streaming masses had “patron” as part of their self-concept. I’d be blown away by anything over 10 percent. How passionate, after all, can one get over the current Netflix streaming slate of on-demand cable TV reruns and post rental cycle movies? It’s a great library, but it’s still a library.

For the record, I’d do it. And I love libraries. But I’m a nerd who likes lazy ways of attaching the label “patron of the arts” to my self-concept. It’s the rest of you lot whom I’m skeptical of. There’s also the matter of the changing nature of Netflix itself. It’s getting into original programming. Aiming to be the next HBO, Netflix has a real shot at becoming the next AMC (and there are worse things to be) if they can make the right deals.

From a consumer standpoint, I’m more intrigued with the experiments being run out in the gaming and comic book markets with microtransaction. Fanboys are the financial guinea pigs of the multinationals. Their behavior proves that there are ways to charge way more than the baseline value for an essentially digital product if the right incentives are in place. They’re also notorious for doing things like insisting that piracy is a legitimate form of behavior if, say, their favorite comic book isn’t made available in the electronic format they prefer at a price point they deem reasonable.

The latter may be why comic book publishers like IDW and DC are trying out 99 cent “digital first” and “digital exclusives” through their online and tablet storefronts. IDW’s “Transformers: Autocracy” is published bi-weekly, with eight pages of story content at the just-under-a-dollar price point. A “normal” comic is running around $2.99 for 20-22 pages of story, so the book comes out to roughly the same per-page price once added up. Yet by coming in at that magical 99 cent price point, it is less daunting than a full-priced comic.

The proposition here is clear: we’ll give you fewer pages for less money, but we’ll keep the quality high.

While the Kickstarter model of crowdfunding has proven to be a winner, it’s not the only tool in the box. As consumers, our relationship with money is changing. Some of that is in the form of an internal change: of more people adopting the identity of patron or investor. The still bigger piece of the puzzle is the perception of value, and consumers are proving they are willing to pay the baseline price of 99-cents for smaller quantities of entertainment, so long as the quality is there.

Hat tip to Lucas McNelly for pointing out the Dorr article.

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