• Will Schoellkopf discusses the debate between paywalls and value4value in the monetization of online content.
• He critiques Gigi’s article „The Freedom of Value“ and the „MTX problem“ (mental transaction problem) and the „DRM paradox“ (Digital Rights Management paradox).
• He concludes that the MTX problem is more of a concern than the DRM paradox and that there are potential solutions that can spare the consumer of the headache of mental transactions.
When it comes to monetizing online content, the debate between paywalls and value4value is a hot topic. To understand this debate, we must look to the work of Gigi, author of the article “The Freedom of Value”. In this article, Gigi breaks down what he feels is broken with the monetization of information, arguing that “the problem with the internet is that information wants to be free.”
This problem with the internet hits home for content creators, like writers, who look to be compensated for their proof-of-work. Gigi breaks down this problem into two distinct reasons: the “MTX problem” (Mental Transaction problem) and the “DRM paradox” (Digital Rights Management paradox).
The “DRM paradox” is the idea that content will only stay locked behind paywalls if it is not good, as the good content will be set free. Gigi acknowledges that this paradox has no solution. The “MTX problem” on the other hand, refers to the problem of irreducible mental transaction costs inherent to every transaction. This means that every time a consumer is met with a paywall, they have to make a conscious decision of whether or not to pay for the content.
Gigi believes that the MTX problem is a bigger deal than the DRM paradox, and thus this article will focus on potential solutions to this problem. One potential solution is to create an incentive system for the consumer. For example, a consumer could be incentivized to pay for content by being rewarded with access to exclusive content or other rewards. Additionally, creators could also offer a subscription model, where consumers could pay a monthly fee for access to all the content.
This way, consumers would not have to make a mental transaction every time they encounter a paywall, as they would already be paying a subscription fee. This would also benefit creators, as they would receive regular compensation for their work.
Ultimately, the MTX problem is an issue that must be addressed in order to ensure the success of content creators. While there is no one-size-fits-all solution, there are potential solutions that can spare the consumer of the headache of mental transactions while also providing creators with a fair compensation for their work.