Optimist Blog

How to Monetize Content in 2010 - We'll all be paying soon...

Content Micropayment Idea For 2010
Save the Whales (content producers & news orgs)

Before I get into this - let me start by saying I did not invent the idea of micropayments and "content credits"...

The Inspiration

I was reading an article on Slashdot about how a particular news website recently blocked visitors from seeing content. They were only blocking content for those visitors using ad-blockers. The website was trying to show their visitors how blocking advertisements stops them from making money - thus - keeping them from delivering quality content. Basically, if you visit a web site and you don't view the advertising, the website doesn't make money and they can't continue to stay in business (see newspapers). If these pillar content providers disappear, we won't have news authorities in the manner we have them now. If you're thinking we don't need these for-profit news companies, you're wrong - they're for giving humans a communication system that we can count on.

However, it's true that no one wants to pay full price for content when they can get it online for free somewhere...like Timmy's Action-News Blog in Nowhere, Texas.

This got me thinking -- how do we make readers and content providers happy and healthy?

Here's the Pitch

What if some company (Google), starting charging micropayments for viewing content. Now before you get in a tizzy, just remember I don't really want to pay either. But, I will pay if that keeps my favorite news sources from going out of business. So what's the solution?

Here's what I am proposing:

As a person who wants to consume content, I go to some new futuristic company like PayForContent1234.com and pay something like $5 per month. This gives me micropayment credits so I can go and consume the content that I love in a seamless fashion. Perhaps I read a NYTimes article and view a CNN video. PayForContent1234.com already has my $5 and is tracking me through tags on CNN or NYTimes, so they distribute an appropriate portion to NYTimes and CNN. This amounts to a micropayment to each of the content providers - perhaps a penny or so. Since it doesn't make sense for me to pay individually for each article, I pay for a retainer against the content I consume. Then there's no ala carte issues, no forced payments, no individual payments, and significantly less transaction charges.

Here's my sample breakdown of your content viewing fees
(yes, I know some of it won't work exactly as demonstrated)

$5.00 paid to PayForContent123.com as retainer (this entitles you to consume content)
$5.00 customer balance
---------
$0.85 goes to taxes, transaction fees and payment processing (Visa/Mastercard/Amex/Discover/Etc)
$4.15 balance
---------
$1.24 goes to Denver Post for monthly content subscription (comes with exclusive features)
$2.91 balance
---------
$0.01 goes to NYTimes for content fees (20 minutes of viewing articles)
$2.90 balance
---------
$0.005 goes to CNN for video fees (viewer watched 50% of the duration of a video)
$2.895 balance
---------
$0.12 goes to Barnes and Noble for a 3-day e-reader research paper lease (article/content expires in 3 days) (3 days x $0.04/day)
$2.775 balance
---------
$0.99 goes to iTunes for track purchase
$1.785 balance
---------
$0.10 goes to Farmville
$1.685 balance
---------
an so on...

The Downside

I can most assuredly tell you that this is going to happen at some level - probably with newspapers first. The down side is that we'll be paying for the content AND still will have to put up with advertising. It's no secret that the former newspaper model was "write content to fill around the ad space". The ad space was always most important - AND - they charged you for the newspaper!

Also, some brave company is going to have to go through there and negotiate content agreements, fees, royalties, security, etc. This will be difficult as many content providers love working in a silo (they'll probably fail in the long run due to this). There are some companies working on this concept already.

Micropayments are still half-baked as a concept. There have been innovations lately with things like mobile pay and Twitter pay - so maybe we'll see the solution come from one of those places.

Google or other advertising networks may not like this idea for fear it will somehow eat into their advertising-as-a-service revenues.

Secure transmission still has technology difficulties. Things like digital rights management and metrics don't work well across different devices.

Possible Vendors

The most likely solution for this is a pre-paid credit card or online subscription retainer model. This leads us to the major players - credit card companies like Visa, Amex, Amazon, Ebay, Bank of America, Chase, Barnes and Noble, Google, Apple, etc...

IMHO to be successful, it will truly have to be an unbiased third party that can operate in an agnostic nature from the other big players. The problem is that the newspapers can go all in with Google or with Apple and screw their brand. News organizations don't want to associate with other brand names simply due to the customer's perception. A news org could lose credibility with their readership if they partner with one company over another. Perhaps each content provider will want to charge you individually (this happens now and it's not working).

Device manufacturers could handle this service since they have first access to your wallet - things like the iPhone, iPad, Android mobile devices, Kindle, etc.

What do you think? Will it work? Would you pay to view your favorite stuff? Would you pay a penny? What if you favorite stuff goes away? Will you pay then?

Let's not forget about Flooz and Beenz which didn't make it past the bubble...

My two cents - feel free to share and comment

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