|Individual bits of content that are even moderately close in quality to what is available free, but wrapped in the mental transaction costs of micropayments, are doomed to be both obscure and unprofitable.
Clay Shirky, Fame vs Fortune: Micropayments and Free Content
Today’s WhatIs.com Word of the Day is micropayment. It’s an old idea that’s getting a lot of buzz lately because of all the press the Wall Street Journal has gotten for looking at micropayments as a way to compensate for declining print ad revenue.
The idea of micropayments has been around as long as the Internet itself. Very quietly, the dead horse has risen like a phoenix from the ashes and micropayments are the new holy grail for many online (and offline) sales models. What changed? Well, a lot has changed on the backend since 2003. That’s when Clay Shirky very astutely pointed out the big elephant in the micropayment room — if you had to stop and think about making the payment for online content, no matter how small the payment was, you probably wouldn’t make the effort.
The newpaper people are hoping that the growth of PayPal, iTunes, EZ-Pass, SpeedPass, using a cellphone to pay for a parking meter …etc. have demonstrated that we’ve changed how we’ve gotten used to paying for things.
As far as I can figure out, the general idea with this new go-around for micropayments and online content is to test and see if people are willing to fork over small amounts of money for niche news. For instance, articles about world news might be free, but articles about local news might be put behind a micropayment wall. Today’s weather might be free, but acess to an extended long-term forcast with marine reports or pollen counts might be subscription-based.
The WSJ is not the only paper considering this.
In fact, there are quite a few newspapers working with an organization called Journalism Online to try and get this idea — or some other reasonable construct, like subscriptions, off the ground. According to the Journalism Online website, the goals of JOI are:
1. To develop a password-protected website with one easy-to-use account through which consumers will be able to purchase annual or monthly subscriptions, day passes, and single articles from multiple publishers.
2. To aggressively market all-inclusive annual or monthly subscriptions for those consumers who want to pay one fee to access all of the JOI-member publishers’ content with revenues being shared among publishers.
3. Negotiate wholesale licensing and royalty fees with intermediaries such as search engines and other websites that currently base much of their business models on referrals of readers to the original content on newspaper, magazine and online news websites.
4. Provide reports to member publishers on which strategies and tactics are achieving the best results in building circulation revenue while maintaining the traffic necessary to support advertising revenue.
Don’t look now, but I think the elephant is still in the room.
When you’re looking for information online, how many times do you just look at once source? Like…umm…NEVER. The whole key to looking for content online is pouring through as many sources of information as you can in as little time as possible.
Think about it. How many times have you backed out of free online content just because you’ve been asked to register or log-in to see it? If you have to stop and think about ANYTHING before you view content, chances are the abandonment rate will be high. And I don’t think it’s too far of a stretch to say that many people who DO make the effort to register to see content feel as if the information they’re providing to marketers upon registration is payment enough.
It’ll be interesting to see if how this experiment turns out.