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The Micropayment Debate

  • February 20, 2009
  • Maya
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Bits and pieces of conversation we overheard from people on blogosphere…
From “You Can’t Sell News by the Slice” (Via The New York Times)

Micropayments are systems that make it easy to pay small amounts of money. You could pay a nickel to read an article, or a dime for a whole day’s newspaper.

Well, maybe. But it would be a first. Newspaper readers have never paid for the content (words and photos). What they have paid for is the paper that content is printed on. A week of The Washington Post weighs about eight pounds and costs $1.81 for new subscribers, home-delivered. With newsprint (that’s the paper, not the ink) costing around $750 a metric ton, or 34 cents a pound, Post subscribers are getting almost a dollar’s worth of paper free every week – not to mention the ink, the delivery, etc.

If the only effect of the Internet on newspapers was a drastic reduction in their distribution costs, publishers could probably keep a bit of that savings, rather than passing all of it and more on to the readers. But the Internet has also increased competition – not just from new media but among newspapers as well. Or rather, it has introduced competition into an industry legendary for its monopoly power.

From “How to Save Your Newspaper” (Via Time)

Newspapers and magazines traditionally have had three revenue sources: newsstand sales, subscriptions and advertising. The new business model relies only on the last of these. That makes for a wobbly stool even when the one leg is strong. When it weakens — as countless publishers have seen happen as a result of the recession — the stool can’t possibly stand.

In addition, our two most creative digital innovators have shown that a pay-per-drink model can work when it’s made easy enough: Steve Jobs got music consumers (of all people) comfortable with the concept of paying 99 cents for a tune instead of Napsterizing an entire industry, and Jeff Bezos with his Kindle showed that consumers would buy electronic versions of books, magazines and newspapers if purchases could be done simply.

When I used to go fishing in the bayous of Louisiana as a boy, my friend Thomas would sometimes steal ice from those machines outside gas stations. He had the theory that ice should be free. We didn’t reflect much on who would make the ice if it were free, but fortunately we grew out of that phase. Likewise, those who believe that all content should be free should reflect on who will open bureaus in Baghdad or be able to fly off as freelancers to report in Rwanda under such a system.

I think it is valuable and should be valued by its consumers. Charging for content forces discipline on journalists: they must produce things that people actually value. I suspect we will find that this necessity is actually liberating. The need to be valued by readers — serving them first and foremost rather than relying solely on advertising revenue — will allow the media once again to set their compass true to what journalism should always be about.

From “Why Small Payments Won’t Save Publishers” (Via shirky.com)

Because small payment systems are always discussed in conversations by and for publishers, readers are assigned no independent role. In every micropayments fantasy, there is a sentence or section asserting that what the publishers want will be just fine with us, and, critically, that we will be possessed of no desires of our own that would interfere with that fantasy.

Meanwhile, back in the real world, the media business is being turned upside down by our new freedoms and our new roles. We’re not just readers anymore, or listeners or viewers. We’re not customers and we’re certainly not consumers. We’re users. We don’t consume content, we use it, and mostly what we use it for is to support our conversations with one another, because we’re media outlets now too. When I am talking about some event that just happened, whether it’s an earthquake or a basketball game, whether the conversation is in email or Facebook or Twitter, I want to link to what I’m talking about, and I want my friends to be able to read it easily, and to share it with their friends.

Newspapers can’t entice us into small payment systems, because we care too much about our conversation with one another, and they can’t force us into such systems…

The internet really is a revolution for the media ecology, and the changes it is forcing on existing models are large. What matters at newspapers and magazines isn’t publishing, it’s reporting. We should be talking about new models for employing reporters rather than resuscitating old models for employing publishers; the more time we waste fantasizing about magic solutions for the latter problem, the less time we have to figure out real solutions to the former one.

Meanwhile “Kachingle Coordinates Microdonations to Get Content Creators Paid” (Via PSFK)

Kachingle is a new service that looks like it could bridge the gap between scattered micropayments and free content.

Kachingle acts as a distributor of microdonations. Member sites would sign up and place a Kachingle badge on their page. Readers pledge to send a monthly payment to Kachingle – $5.00, $10.00, $100.00 or whatever they want. Then, Kachingle distributes that money proportionately amongst the partner sites you’ve visited over the month. So, if you visited PSFK 50 times, and The New York Times 50 times, your pledge would be split evenly, and so on.

Image Source: jus.Luc’s

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