Some guys are going to try a micropayment/subscription system for news content.

Looks like a terrible idea just judging from their name (Journalism Online L.L.C), their backgrounds (mainly attorneys and newspaper execs), and the extent of their ‘innovation’:

“The most important thing is it’s simple to use,” Mr. Brill said in an interview. “Much of the barrier to charging online is the transaction friction, as opposed to the actual cost. With this system, you’d have a single password, give your credit card number just once.”

He said that for the unlimited subscriptions, “we’re playing with a figure of $15 a month.”

…which is too bad.  Micropayments could work, but the more botched attempts the harder it is for someone new to try.  Looks like the best chance is still Apple and Amazon and their handhelds/bookreaders.

iPhone 3.0 top features

March 21, 2009

In addition to usability enhancements such as copy-paste, wide keyboard for all apps, universal search, background SMS send and SMS forward this is an important release because it really expands the possibilities for the platform:

  1. In-app purchases: Buy additional levels in a game, another city guide, more talk time, an article, etc.  This might be the re-launch of micropayments.
  2. Peripheral control APIs: The iTouch platform can now be the face of home appliances, entertainment devices, industrial equipment and testing tools.
  3. Bluetooth networking and discovery with Bonjour: Should allow starting and playing games with one or more friends across the room, and sharing pictures, contact cards and other files.
  4. Voice memos over MMS: What if instead of spending one minute typing a text message I just speak it? Recipient can then reply by voice.  Asynchronous as SMS, but efficient as talking.
  5. Streaming video: If providers deliver paid live content to the iPhone this could be another pathway to the living room (iPhone supports TV out).
  6. Embedded maps: Now watch LBS apps really take off.
  7. Push notifications: 3rd party communications apps are now possible.

Going backwards

March 1, 2009

Newsday starts charging to read articles.  I’m sure many, if not most, will soon follow.

And the web gets a little less open.

Such a shame.  As I’ve said before, if they offered both free and paid versions side by side they could satisfy the casual one-time reader (and stay in the conversation), while making money off their habitual readers.

Micropayments must work

February 15, 2009

Nobody likes clicking through multiple pages to read one article, that’s partly why paid content via micropayments CAN work.

Blog advertising pays an average of $5,000 a year, and only a few bloggers can earn a living from it.  That’s why micropayments HAVE TO work.

Otherwise we are doomed to a dangerous lack of of news coverage.


February 8, 2009

Walter Isaacson pleads the case for micropayments to save the newspapers.  Andrew Sullivan dismisses it (it’s too late!).  I do fear a news coverage gap as traditional media shuts down their foreign bureaus, investigative reporting teams, etc.

The article comes short because it acknowledges how many micropayment systems have come and gone but doesn’t propose how a new one could be made successful, except maybe to say that it should be ‘iTunes-easy’.  So let me take up where he left of:

First off, the environment has changed significantly since past players tried and failed, thanks to an unsung hero: Apple.

It is widely recognized that Steve Jobs has revolutionized computers, portable music, wireless and even retail, but one key overlooked aspect is iTunes’ micropayments system, which has quietly got consumers used to paying 99 cents or more for music, software, audiobooks, movies and music lessons.  It also incorporated two key ideas that really show us the way: daily transaction batching and standardized pricing (which the labels vehemently opposed).

With that in mind, here’s what I think would make a micropayment system successful today:

  1. Concurrent free and paid availability: Switching to a paid model is a risky proposition for any content provider.  So why switch at all?  Instead let customers choose.  The paid version of an article could be easier to read (full width, no pagination, no or less intrusive ads), have related resources, additional pictures/charts and enhanced/prioritized/separate discussion and other social tools.  A paid video would not play a 20 second commercial in front and could be higher resolution.  User should be able to select paid versions as a general preference, or click through to a paid version individually (after initial payment system signup/authorization).
  2. Standard pricing: We are not willing to spend time deciding whether each article is worth 15 or 25 cents before reading it.  But if we only have to do this once per publication it is a better value proposition.
  3. Don’t monetize everything: Instead of making everything available for 9 cents, offer paid versions only for major features and stories for 29 cents.
  4. Batching:  Costs are very high if there is a transaction for each purchase, or if authorization needs to happen in real time.  Instead, on signup publisher assigns the user a ‘credit limit’ and captures funds only if limit reached, but more typically every week by batch submission.
  5. No costly chargebacks: Customer can decline charges via online tool within a month.  Requests are automatically approved without research involved, but each one lowers a customer risk score that is provided to the publishers on signup.
  6. Not publisher-specific:  Entering a credit card number to purchase that first $0.20 item is a non-starter.  Consumer should be able to setup a payment account once, and approve its use with a simple form, in under 10 seconds, for each new content provider.
  7. Not vendor-specific: Content providers should support multiple micropayment providers that offer a standardized interface.  Customers can use their preferred provider at most publishers.

The coming news coverage gap

December 14, 2008

Will micropayments save the day?

The recession is accelerating the inevitable: Papers are dying all around us.

Whether you view this with a sense of nostalgia, disbelief or excitement, and however you feel about new media, I see a big risk in this changeover.

You see, Arianna is happy to point out that blogs are starting to break the news, as in the case of Obama’s infamous ‘bitter cling to guns’ comment. Some bloggers do get scoops, especially around political news. And they’ve covered uprisings and natural disasters where the press wasn’t allowed or couldn’t reach.

Still, 99% of investigative reporting still comes from traditional news organizations, and blogs simply add an editorial and social layer on top.

Also, only a handful of bloggers can expect to make a living from their high-traffic sites.  Those who blog about niche or local issues don’t have viable businesses under the current advertiser-supported model.  They usually have a day job.

After all eyeballs move to the web advertising dollars will go farther and support more and more properties.  But in the meantime, what happens when the papers go bankrupt and city, Washington and foreign bureaus are shut down? when AP and Reuters aren’t there anymore? Will laid-off journos start blogging while waiting tables to pay the bills?

This process will be abrupt and messy, which is feedstock for innovation.  Solutions will be found.  So I’m not worried about the long term.  Encouraging models are starting to appear.

But in the short-term it would be so much cleaner if we had micropayments.  $0.05 for a news piece, $0.10 to read a feature article.

The concept has been tried before and failed, but perhaps this is the perfect opportunity to give it another go.  I hope someone is pitching this right now and will have a solid product in 09, just in time.