p2pnet.net Feature:- In the past I’ve written about donations to artists via micro-payments from p2p users. I’ve also written about some new payment models that could be used in tandem with p2p distribution.

PayPal recently took up my idea (although there’s a slight chance they may have come up with that micro-payment plan themselves It’s offering new micro-processing for payments of less than $2.

I’ll explore a business plan in a bit more detail and perhaps some of you p2pnet readers will use it to show the world how p2p can be an excellent platform for new media businesses.

Let’s take a “Red vs Blue” type internet series by way of example. It comes out regularly, provided that a set amount of cash has been donated to the producers of the show. To get perspective, a typical US drama series can cost up to $5 million to produce.

Our p2p distributed show will cost $10,000. But even with its new micropayment option, PayPal takes a hefty chunk of the money a user transfers (Jon will back me up on this : ) and at the time of writing, we still don’t know what the anticipated Google Wallet will charge either.

So, we’ll invent a new system that still uses PayPal as the backend, but has some new stuff that can be controlled by the user.

P2Pay sounds like a good name for this hypothetical example.

Initially, P2Pay will be used to donate money to the new $10,000 net series, which we’ll call Jack My Net. Episodes have already been released through BitTorrent and are now floating around on general purpose networks such as Gnutella and ED2K. You’ve just finished watching the sixth episode, but before the end credits roll you see a message from the production team:

“We’ll be releasing the 7th episode of Jack My Net once our viewers have dontated $10,000 - Hey, we gotta eat y’know!”

As the viewer, you’re faced with a choice:

A) Give them some cash,
B) Wait until other people have given them some cash, or
C) Get all your friends to watch the show, pretend you’ve already donated and bully them into paying your share.

At the end of the day, the production team will be happy once they get their ten grand and won’t be terribly fussed how they actually got it. If you decided to go with option C), you’ve actually done them a big favour because all your friends will figure out the three options and occasionally choose C) themselves. This leads to a bigger audience and the bigger the audience, the more anyone can choose option B) and still be assured of the next episode coming out.

But Jack My Net is a damned funny show and you decide to cough up some cash for the good laughs. So you decide that $0.20 per episode is fair for the first five back-episodes you’ve already watched. You decide to pay $1.00 towards episode six - it ended on a cliffhanger and you can’t wait for episode seven! This means you’re essentially going to be making six different transactions - 20c x 5 episodes + $1 x 1 episode.

The total amount you’re paying for those six transactions is $2.00 but under PayPal’s micropayment rates, $0.40 (or 20%) of that gets eaten up in fees. By doing only one transaction for $2.00, you could knock the charges down to $0.15 - which gets an extra 25c to the Jack My Net team.

This is where P2Pay comes in - dividing up a small payment into even smaller ones.

Savvy readers will have already worked out that P2Pay is essentially just a PHP script that can be run by the Jack My Net team on their server to display payment information on their web site. The viewer is given a simple form to detail where they’d like the money to go. An uncompleted form might look like this:

Total Donation: $2.00

• Episode 1: $0.20
• Episode 2: $0.20
• Episode 3: $0.00
• Episode 4: $0.00
• Episode 5: $0.00
• Episode 6: $0.00

Remaining cash to be allocated: $1.60. There could also be an “I don’t care, just divide it up equally” option.

That takes care of “royalty” payments for old episodes, but what about hitting the $10,000 target before episode seven is released? Fairly simple:

Donate to past episodes <- OR -> Pay for the last episode. I want to see the next one!

This is really the first thing a user should see regarding anything to do with donating, and the Jack My Net team are always giving the viewers a choice.

RIAA operatives reading this should take note of that last point - give the viewer a choice. Give Jack My Net to as many people as you can. Encourage distribution through p2p by initially hosting the content yourselves and running a BitTorrent tracker.

You can even use public trackers like LegalTorrents.com - they’ll be more than happy to help you get your stuff out there. As long as you set yourself a modest income goal and turn out some quality material, you’ll be okay.

My day-job salary is paid for through micro-payments and involves working out the viability of micro-payment structures. My professional opinion is: the system detailed above would work. Did you know you can patent a business plan? Well the one above wil never be patented. It’s yours to use freely.

And if you can demonstrate that it’s viable, congratulations - you just changed how the international media business works.

Alex H, p2pnet development manager - Sydney, Australia
[Alex is an operations manager for an ATM (automatic teller machine) supplier and he specialises in infrastructure development and maintenance, and logistics. He’s also an[other] active member of the Shareaza community.]

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Good idea? Alex will be working with me (Jon Newton, general manager) and tech manager Sixto Luis Santos to implement a P2Pay-like script for p2pnet. That way, it’ll be easy for anyone who wants to support us to do so.

Alex explains it like this: “Readers would donate $2, say. That would be split up as 50c/week ($2/month) or 25c/week ($1/month) etc. This $2 gets put as a recurring payment on their PayPal account, so it’s essentially a Direct Debit for a subscription. The important thing is to minimise PayPal fees, so the P2Pay script is the way a small payment ($2) is divided up into even smaller payments (25c) internally by the site.”

Using the p2pnet P2Pay, you could kind of ’subscribe,’ making painless contributions of however much or however little you can afford. And, it might eventually remove the need for advertising, or at least cut back on it.

We’ll publish the script when we have it together and maybe other people can use it. In the meanwhile, if Alex’s idea gets you going and you decide to do something with it, let us know so we can run a story : )

Cheers!
Jon

Something you think we should know? tips[at]p2pnet.net

This entry was posted on Monday, September 5th, 2005 at 2:26 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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