Update: Be sure to read NiemanLab's take on this post Micropayments for news: The holy grail or just a dangerous delusion? - it provides a lot of great background and context.
This post was inspired by Steve Outing's tweet: "HUGE difference between price of 1 cent and 0 cents in terms of
consumer behavior. My take: what u suggest would kill off audience", posted in response to my opposing tweet.
What would an aggregate micropayment system look like?
Micropayment systems allow publishers to charge small amounts, such as a penny per page, then bundle these micro-charges into a monthly bill large enough to warrant a credit card transaction e.g. $1.52. For individual publishers, this might take more than a month and result in numerous small charges over time. A third party aggregator solves this problem by tracking and billing users for their usage across a network of participating sites. For consumers, it can be a simple, pay as you go system at a reasonable price.
The primary advantage to the consumer is that the majority of their online content costs are aggregated in a single bill.
Earlier this month, the Nieman J-Lab reported that Google was developing a micropayment platform that aims for fixed monthly access passes:
"[Google] envision[s] the typical scenario to be where a user pays a monthly fee for access to a wide-ranging package of premium content. One example of a “package” might be full access to the WSJ [Wall Street Journal]; another “package” might include the top 10 business publications. Google believes that there is real power and benefit to publishers in providing these sorts of broad, multi-publication access passes."
The Google approach isn't as consumer friendly. It reminds me of how I'm forced to purchase 60 cable channels just to watch the two that I want.
With simple consistent pricing e.g. 1 cents per page and respect for consumers, micropayments could help boost revenue for media publishers. If publishers try to jack up rates and charge
too much for content - consumers probably will reject it. See also Imagining a penny-a-click Web (TechFlash).
This service can be as much a benefit to mainstream
publishers as it could be an additional new revenue opportunity for
bloggers and small, independent publishers.
Would consumers pay?
There's no way to answer that without starting some trials. However, let me give a few examples of services that we've grown used to paying for:
- iTunes movie rentals: While Outing says consumers pay for iTunes because "a song purchased on iTunes is something you get to keep", he leaves out iTunes movie rentals. These cost from $2.99 - $3.99, must be watched within 30 days and once you start watching, you have to finish the movie in 24 hours. Despite these restrictions, they appear to be successful.
- Text messages: Cell phone users pay 10 cents or more per text message if they lack an SMS plan or go over their limits despite the fact this costs the industry almost nothing to deliver.
- TiVo: Many people pay $12.95 per month to watch TV when they want to and to skip annoying advertisements.
- Broadband Internet access: In many areas, consumers pay more than $50/mo. for broadband despite persuasive arguments that high speed Internet access should be a regulated, public utility.
Small fees for news content does not seem much different than these to me - in fact, it seems like a good value. In contrast, look at the way newspapers and websites are treating their readers today: pages with high ratios of ad-space to content-space, registration walls, pop-under ads, pop-down ads, interstitial ads, page-skins, overlay ads and more. This is not sustainable - and apparently, it's not working:
What's next, a slot machine animation that requires readers to refresh interstitial ads n times until they get 3 cherries and are allowed to read the story?
Sites are becoming so cluttered that there is more risk for publishers in alienating readers by staying on this course than by trying something new.
Provide Value to Consumers
Last month, I wrote that publishers need to start thinking about providing new value to readers unless they want to become social media roadkill as readers get their fill of news with 140 character tweets and mobile RSS-sized captions.
If implemented correctly, micropayment technology could allow publishers to provide some valuable new features via Web-services enabled by the aggregator:
- Searchable archive and history - A micropayment system tracks every story you read on participating news sites. A Web service could allow publishers to provide private label full text search of every story you've read and the ones you spent the most time reading - filtering on their site, or across all the participating sites.
- Sharable news - The archive would also make it easy for you to share news with your friends. Facebook integration could highlight trending stories read and shared by your friends and colleagues.
- Reduce advertising clutter - Publishers should offer faster loading, ad-free or ad-reduced pages to readers participating in micropayment programs.
- Improved personalization
- Use my browsing history to offer services that recommend stories tailored to my reading habits
- Using what you know about me, offer me ads that I am more likely to be interested in - I will thank you
- Synchronize mobile and desktop consumption - When I read stories on my mobile device, track them the same way you would on my desktop. Synchronize what I read and what I share so I can refer back to it later.
- Give advertisers new ways to reach me - Amazon could offer me 25 micropayment page credits whenever I shop there. Some e-commerce providers might give you 5 credits just for visiting their site. Microcredits could become a new promotional currency.
- Educating readers on the importance of good journalism - Micropayments offer a way to give the user quantitative feedback about their actual news consumption habits. What better way could there be to educate people on the value of your product? I'll offer some models for this below.
How Do We Get Started
Turn off your registration walls. It might help you to have your reader's email address, but there's not much initial benefit to them.
Turn on micropayment tracking. Use the service to place widgets on each page that show readers quantitatively how many stories they've read and how much time they've been spending on your site. Offer links to related stories they might be interested based on what you know about their preferences.
Introduce them to their searchable, historical archive. Encourage them to register so that their archive combines information from all the participating sites I'm using.
Set a threshold at which you expect readers to start paying. For some sites, this might be 10 stories. For some, it might be 100+ or more. This is a good time to tell them that good journalism costs money and that this program is less intrusive and more friendly than ad-cluttered sites and more effective than downsized newsrooms.
Some sites can launch the service as a trial. Some sites might offer it to a subset of readers in exchange for special offers or faster, ad-free pages. Some sites might require all readers to begin paying for content immediately. The micropayment model can be used in parallel with existing revenue models e.g. advertising, subscription, et al. and even free content.
Should publishers wait for Google to build it? As the Nieman J-Lab put it, "newspaper companies that have frequently accused Google of leaching off their revenue might be loathe to participate in a joint venture."
Perhaps, an industry group like the Fair Syndication Consortium or other nonprofit might build a service like this to support news organizations. The system I've described might make an interesting entry in this year's Knight Foundation News Challenge, if restricted to a single-city trial - I was surprised nothing like this won last year.
I don't think micropayments are the only answer to journalism's business model challenges but I do think they warrant experimentation and a fair trial before we judge them.
Please let me know what you think of this idea. Post a comment below or tweet @reifman.
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