Digital Innovation Digital Publishing
6 mins read

Micropayments in publishing: where are we at?


It’s not something that exactly fills you with confidence when the CEO of one of the more high-profile micropayment sites says, “I have to be honest: We are still not making a profit.”

In the summer Blendle – arguably micropayments’ most high profile solution – revealed that they were moving away from micropayments to pursue a premium subscription approach.

For too long, when solutions to the crisis in journalism were spoken about it was with a wistful look at the horizon and mutterings about the search for a ‘Spotify for news’ model. Sure, the imagery there may be somewhat re-imagined for this author’s own amusement, but the sentiment remains. Spotify had disrupted the music industry sufficiently to completely shake up the long-established way of doing things, and what it offered listeners was a faster, slicker, more user-friendly experience – not to mention a comprehensive one.

It’s always problematic to try to cut and paste a solution from another sector onto our own, however attractive it might be, and indeed it’s a rallying cry that has floundered in the publishing world. 

So, what’s all this about with micropayments? And, does the fact that few are trying it suggest that the approach is at best flawed, at worst unworkable?

The problem: friction

The fact remains that, protestations to the contrary, right now people don’t actually want to pay for news on an article-by-article basis. They might like the idea of it, but the friction involved is problematic.

The problem in extrapolating the Spotify model to the news sphere was simply that the core product behaves differently. There was – and is – the expectation that music is something to be paid for. News, by contrast, has long been viewed as a commodity, and trying to get people to pay for it demands a complete about-face.

‘The internet has made casual payment much harder, even though it has made casual consumption much easier.’ This from Dominic Young, speaking on The UK Brand Show last week.

Young, who used to work for News International before setting up Axate (formerly Agate), is absolutely right, of course. Our relationship with things which have become digitized has shifted: humans are hardwired to adapt to convenience and easier solutions. 

Problem is, they’re not always great at paying for them – especially if the process of paying isn’t straightforward.

The execution of a micropayment approach may well have been the impediment to its success: if readers must cross through the publishing equivalent of a toll road before each article, they may be dissuaded from reading at all, until the publishing equivalent of Google Maps shows them a sneaky shortcut.

The other problem: the other 95%

But should we be paying more attention to micropayments as a potential solution to the funding problem? The subscriber seems to be considered the optimal solution: it’s reliable, it’s quantifiable. But, in fact these hallowed few account for only 5% of readership – a figure that continues to astound – and, moreover, this is a percentage which seems fairly static. Save for regional anomalies (yes, the Nordics), this percentage seems the industry average, and one without much potential for growth.

So, that’s 95% of readers who can’t (or won’t) pay for content. Maybe some of these readers will eventually sign up and subscribe, but that’s almost a secondary consideration: what we’re facing are a staggering majority of readers who don’t. It’s a problem, but it’s also a massive opportunity.

If casual payments with no commitment were on offer, could it increase monetization opportunities?

It’s interesting that the New York TimeWashington Post and The Economist – all of them poster children for success with subscriptions – are among the titles featured on the Blendle dashboard. Have they been experimenting with Blendle because they can afford to? Or, might it be that their willingness to dally with micropayments rests on the understanding that they may be able to entice some of the remaining 95% into a more permanent relationship, if they dare to experiment a little?

So, how might that work, then?

The wallet

If, to go back to Spotify, all news publications were available through a single portal, that would be something. It would be nice to dip into articles from The Economist, or Yomiuri or Financial Times or Le Monde as we see fit. But, we can’t see that happening anytime soon. 

The “federal wallet” – to borrow Axate’s line – is a solution of sorts: you have an account and you load it with credit. There’s a little icon which sits in your toolbar and when you find an article you want to read which is linked to this wallet, you click the button and – hey presto – your account is deducted an article fee (no friction!) and you get instant access (so easy!). 

Publications might also set an upper limit on the amount the reader can be expected to pay per publication each week, and once that amount is reached the reader can access any further content for free. Thus, it stops the reader inadvertently spending a small fortune, and caps it at a reasonable level. It’s an intriguing solution for what must be the many readers who read multiple publications, but will only subscribe to a couple.

There’s the problem, though. Publishers have to participate. Would they, while the lure of subscriptions is being dangled in front of their cash-strapped eyes?

The stumbling block: monetization mindset

Another issue with micropayments is that – being a disruptive business model – it’s also requiring newsrooms to radically change the way they think about monetizing news.

Regular readers of this blog (and if that’s you, stay behind after and collect your free balloon) may remember talk of using a user needs analysis to think about how content is generated. For those asleep at the back during that particular article, the idea is simple. Users read content for many reasons. In a newsroom context one of the most familiar is ‘update me’. The problem is that with multiple channels offering this information for free, it’s a very difficult task to try and persuade readers to pay for this information when they can get it, gratis, elsewhere. That kind of news has long been commoditized.

Thinking about covering stories from other angles – educate me, give me perspective, to name a couple – and it becomes more likely that what you’re producing is going to be unique, and more likely to be paid for.

In the context of micropayments, this is relevant because if a publication is trying to sell articles on a case-by-case basis about whatever’s just happened, it’s frustrating for the reader and unlikely to be particularly profitable: it’s easier to just open Twitter and start scrolling.

No, what micropayments reminds us is that articles need to be worthy of their readers’ attention. Luckily there are ways to keep on top of that

The learning opportunity: putting the article in the spotlight

When you bought a newspaper, your appreciation and value of that publication was in the sum of its parts. Thought today’s political sketch was a bit off-color? That’s alright: the longform interview with that movie star you forgot you loved more than made up for it. 

The value was in the package, and the odd article that missed the mark was swept into a broader assessment of what was good.

Of course, with digital, the wrapper is a different prospect. Subscriptions enable publishers to replicate the print model and get readers to buy into a brand-as-repository-of-content, but micropayments busts that idea right open. With micropayments, the masthead is a mark of quality assurance which will be tested by the reader each and every time they consume an article. By having a transaction accompany every article, you’re effectively reminding your readers to value what they read.

Yes, this could be seen as a problem. But, it could – and perhaps should – be viewed as a learning opportunity. 

If you’re asking readers to pay per article, are they going to choose what they read more carefully? Perhaps. Are they going to favor articles which update them? Educate them? Inspire them? If they’re aware of the transactional nature of reading, are they more likely to read more of the article than those who haven’t been made aware that they’re ‘buying’ access to read?

The answers to these questions may vary from publication to publication, but one singular truth remains: there’s no harm in closely monitoring the performance and engagement your content generates on an article-by-article basis. A little closer inspection is never a bad thing.

by Em Kuntze

Republished with kind permission of Content Insights, the next generation content analytics solution that translates complex editorial data into actionable insights.