Solving the micropayment puzzle for publishers

micropayment

Most publishers are (rightly) obsessed with growing subscriptions: they are familiar from the pre-digital world, yet make sense for online content, they help create a loyal community, and provide a predictable and stable revenue stream in this chaotic media landscape.

But not everyone wants to form a committed long-term relationship with a media brand – some people prefer to pick and choose, chop and change and read from a variety of sources.

So many publishers have been exploring the idea of micropayments – allowing online readers to pay just a token amount for one article or report or essential piece of content.

This is not a completely new idea. Print magazine publishers like Yachting Monthly have been charging readers a one-off fee for previously published reviews of second hand yachts for years.

But there have been some big barriers to taking this idea into the online content world:

  1. There’s just so much good free content out there, an article “fee” just encourages a bit of frantic googling and a search for a cost-free alternative, unless your content is particularly compelling or unique.
  1. Making small payments online is such a headache. It’s tedious enough to fill in a complex form and provide credit card details for a £50pa subscription, but who has the patience to do this for a 50p article? And with most people consuming content on mobile devices the willingness to complete forms on a small fiddly screen is rapidly wilting.
  1. Pricing is a minefield. Everyone has different ideas of what a piece of content is worth. And the same people who happily dish out £2.50 for a fancy latte will baulk at paying 25p for the article they read while they drink it.

Despite these barriers, tech firms like Apple are masters at extracting 79p amounts from their customers via iTunes for apps, games, music or cloud storage, where trust has built up and it’s just one click on a phone to spend some small change. And now a few media businesses are making some form of micropayments work.

The teachers’ website TES has for many years hosted a resource area where teachers can upload lesson plans for others to download. Until recently this was free, but now teachers have the option to add a price tag – typically £1-2 – and other teachers can buy credits on the site to purchase on site. This makes it far easier for teachers to make a snap (maybe late-night) decision to buy rather than look for a free lesson.

But this is a closed ecosystem – so only within the confines of a professional online community.

Blendle is the best known platform that provides a micropayment system across multiple publishers. They sign up a group of publishers and then make a selection of their articles available to buy from between 9c and 49c – usually via their own site, although they are looking at integrating with publishers’ own sites. In their home turf of the Netherlands, plus in Germany, 650,000 people have paid to read articles, and now they are trying to replicate this in the US. If a buyer feels the article wasn’t worth the price, Blendle offers a no quibble refund – they claim that only 5% of customers use the refund button.

The Winnipeg Free Press have run a micropayment system for two years, with charges averaging 27c per article, and their refund rate is only 2%.

But we’re still talking about a closed shop for a select number of publishers.

How about trying to offer a simple payment mechanism that any publisher can install on the free part of their site that is easy for users to operate without special logins? A bit like the idea of social sign on for websites, buying from third party vendors using your Amazon account, or commenting via Facebook or Disqus.

Now there do seem to be a few companies offering payment mechanisms for content that could be installed on an independent website, according to this article in Huffington Post.

Among them are Protip and AutoTip, which are based on bitcoin and designed for a wider audience than purely publishers. They operate on a voluntary donation basis, allowing the user or reader to decide whether to “tip” the author or not.

One service that is keen to specifically target publishers is UK-based Tibit, which has an interesting twist in that it allows the individual user to pre-set their “tipping” amount when they set up an account – whether that is 10p or 50p. To date the average price set by customers for a “tib” is 27p. Of this amount Tibit take a fee of 2p for the service. Now this does mean that authors or publishers can’t set their price; instead they have to rely on their readers to assess the value of an article or piece of content.

Authors can place a button on their webpages through a WordPress plugin and collect “tibs” or donations from people who have signed up for the service. This can be on a voluntary or donation basis, or a publisher can require payment for access.

Tibit has yet to sign up any mainstream publishers, although it is running a trial with bloggers and has about 30 clients so far, split evenly between bloggers and the open source software world. According to the team they are in confidential discussions with a couple of national media organisations, so worth watching for developments.

So potentially micropayments could be an interesting additional source of revenue for publishers, as online display advertising continues to dwindle.

And maybe if some of these services become more widely adopted, and people become used to simple payment mechanisms, micropayments for small pieces of content will become part of the revenue landscape for publishers. Already, as ad blockers grow, more publishers are leaning on altruism to encourage users of ad blockers to white-list their site or sign up to a subscription, so perhaps the idea of philanthropic pricing isn’t quite so unusual.

If you have experience of testing micropayments in your publishing business, or know of any more examples of payment services, please let me know.

About the author

Carolyn Morgan has over twenty years experience launching, growing, buying and selling specialist media businesses across print, digital and live events. Carolyn now advises publishers large and small on their digital strategy and writes and speaks on the topic of digital publishing strategy for media sector publishers and events.


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