Wait... Wouldn't Micropayments Be Bad For Journalism?

from the how-much-did-you-earn... dept

It's been funny watching newspaper execs and journalists go on and on and on about how important it is to "save journalism" and then come up with plans that will likely hasten the demise of newspapers -- such as micropayments. We've discussed in great detail why micropayments are unlikely to work (they've pretty much failed everywhere they've been tried with news content), but Kevin points us to an argument that shows why micropayments would likely be a terrible thing for journalists as well. When you have a direct association between revenue and a particular article, then suddenly it becomes possible to determine quite specifically how much people are willing to pay for a certain journalist's articles. Thus, management now has incentive to reward journalists who get more people to pay -- meaning those journalists have every incentive in the world to try to come up with stories that will make people pay, which might not be "good journalism."

Of course, some will (and have) pointed out that there's already some of this done, with tracking of advertising revenue on certain articles, but this would be even more direct -- and the key point is that it leads to trying to maximize the experience of a single article, rather than the entire experience:
An article is worth far more than the number of direct sales it generates. Even more importantly, thinking of each article in isolation shortchanges the value of the publishing enterprise as a whole. There are many things that make the New York Times better than the Podunk Daily, but "readable articles per day" is the least of them. (Which means that in addition to being bad for consumers and journalists, by destroying brand value micropayments would also hurt publishers. The trifecta!)

In fact, in this hour of crisis, newspapers should be moving in the exact opposite direction to generate revenue -- focusing not on specific articles, but rather on delivering valuable experiences to their readers, whether that takes the form of articles, databases, multimedia, user-generated content, or whatever else will serve the audience's needs. It is the entirety of that experience that will deliver goodwill and revenue opportunities down the road.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Andrew, May 15th, 2009 @ 3:26am

    Do you mean that people don't like good journalism?

    'journalists have every incentive in the world to try to come up with stories that will make people pay, which might not be "good journalism."'

    Isn't this an elitist argument - individuals should not be allowed to choose what they want to read, journalists need to educate the unwashed masses? I think micropayments are a wonderful idea, and if WSJ can produce a micropayment system that charges me say 20 cents to read an article, I will pay it - so will millions of others. Sadly given the history of this stuff, I bet they will put the price far too high, which will be necessary to cover the cost of the system.

     

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    Mike (profile), May 15th, 2009 @ 3:45am

    Re: Do you mean that people don't like good journalism?

    Isn't this an elitist argument - individuals should not be allowed to choose what they want to read, journalists need to educate the unwashed masses?

    Sorry if I wasn't clear. My point was taking the position of the journalists and newspaper execs who make this argument. Their argument is always that elitist position.

    Yet, in implementing micropayments, they show what a lie their position is, because it is in fact the opposite of that elitist position.

    I think micropayments are a wonderful idea, and if WSJ can produce a micropayment system that charges me say 20 cents to read an article, I will pay it - so will millions of others.

    I'd bet that you'd be wrong, and off by an order of magnitude. People don't pay micropayments, especially for news. Adding the mental transaction costs (is this worth paying for?) has a huge impact. And with news, there are so many alternatives that are good enough and free, that it simply is unsustainable. On top of that, when you have a micropayment system, it creates disincentives for anyone else to link to you or write about your story.

    It's a flat out bad idea.

     

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    Art, May 15th, 2009 @ 4:27am

    Seen this before

    Sorta like John Dvorak, whose tech columns lost all relevance many years ago, but who saw huge surges in traffic and ad revenue every time he dissed Apple.

     

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  4.  
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    Griff (profile), May 15th, 2009 @ 6:09am

    Agree and disagree

    Mike,

    I agree the previous poster has the price out by an order of magnitude. But I take issue with a couple of things you said. First, every business model but "free" potentially creates disincentives for linking.

    Secondly, when the price is low enough, it is dwarfed by the cost of people's time. There are plenty of news links I start to follow then I stop when I hit a registration page. It's free to register but it is a complete pain in the arse so I don't.

    If I could cruise through that reg page clicking just once on something that tells me the NYT is going to take 0.5c for me clicking through, I'd probably take just keep reading.

    An aggregator like the huffpost (or google) could take a slice of that micropaymeent for sending people through to the link. There would be a great incentive to link (just like being an Amazon associate)

    But it would have to be convenient, universal and fast for the user. Not a micropayment scheme for the NYT and another for the WSJ. Either
    - one system that is so universal that it covers every website that I visit (hence I log in once only)
    - a web services standard that defines how my browser and a website will automatically handle this with a simple popup. The website owner will have a merchant account with someone that can handle this for them and I will have installed a 3rd party plugin into my browser.


    Note that I would want a tag on links before I follow them so that any out of my preferred price range either don't display or display as a visibly different colour.
    Again, some browser functionality required here.

    Now, you will no doubt point out that any micropayment scheme is doomed to fail when someone else can offer the same content free with an ad model. But if I was a quality news outlet I would charge for what has most value
    - charge for timely news when it is a scoop then offer it free when everyone has the story (*)
    - charge for my own in depth stuff that is not available from others

    And of course, there would be alternative "subscription" plans that got me up to 1000 stories for less than paying individually (the hook being that I still pay even if one day I don't read any).

    (*) You might say what's to stop me paying to read the guardian scoop, retyping it into my site and showing it free. But that has been an issue since the start of news. Any major attempt to do it can be proven and prosecuted. And like I said, the guardian are only charging qwhen it is a scoop, so by the time there are 5 places the copier could have got it from, I have probably stopped charging for it anyway.


    Any story I pay for once should be free for me to revisit.

    And I want a browser option (for those who can afford it) to remove all visible authorisation barriers and just show a total spend at the top of the browser.

    Assume my time costs 10 quid an hour - 16p per minute. 1/6 of a penny per second. You can quickly see that the time I spend reading an article costs me far more than the likely micropayment. A site that is fast and gets me the content I want will earn my penny. But I will expect it to fly and not waste my time with video ads.

     

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  5.  
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    Tgeigs, May 15th, 2009 @ 6:26am

    Headline: "Madonna Douches on Pope"

    click click click click

    "Thank you for your payment. This article is actually about the latest TSB budget cuts and...."

    Okay, so it probably won't be that extreme, but how does this not encourage grandized headlines?

     

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    EH, May 15th, 2009 @ 7:13am

    Re: Do you mean that people don't like good journalism?

    > if WSJ can produce a micropayment system that charges me say 20 cents to read an article, I will pay it - so will millions of others.

    No you won't, and neither will "millions" of others. Dozens maybe, and that's a high side estimate.

     

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    Michael Tackett, May 15th, 2009 @ 7:44am

    Micropayments

    I think a better system for micropayments would be to pay for a certain amount of time to access the new site. I don't necessarily want to read just one article, but I don't want to pay for access for a month. My general habit is if I have the down time to read, I would like to pay for that time, maybe an hour, and then read whatever I want.

    This would remove the focus on "popular" articles, theoretically reduce cost for the user, but still allow news sites to make money off readers.

     

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  8.  
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    Judsonian, May 15th, 2009 @ 7:52am

    Ummmmmm

    This is exactly what Nielsen does with Television, Radio and the internet (to a degree). In some markets (Like Knoxville, TN) any show (yes, any show) can be tracked down to 15 minute increments. While not as granular as "per article or per story" this allows the news director to move shows around (ever wonder why sports and weather are at the end?) to achieve the best ratings against the competition (who are also doing the same thing). And yes, the "better" reporters get a better story that will go in the better block (after open, before 1st break, after second break and so on). The same thing happens in newspaper ..... who do you think writes the front page articles? The guy fresh out of college?

     

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    Daniel Tunkelang (profile), May 15th, 2009 @ 8:23am

    Micropayments = Paying for Every Breath You Take

    The success of iTunes and iPhone applications notwithstanding, I'm highly skeptical of micropayments. The literature on human decision making generally shows that we don't like repeatedly incurring small costs, as compared to making a single decision to spend a lot of money. That's why amusement parks offer pay-on-price admission, or why we'll buy a car rather than repeatedly use taxis or car rentals.

    But I suppose every advocate of micropayments thinks they can extrapolate from iTunes. I'm inclined to agree with the arguments that Apple's closed ecosystem is a special case.

     

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  10.  
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    Rich Pearson, May 15th, 2009 @ 9:13am

    Micopayment infrastructure is already in place - ad revenue sharing

    The WSJ and a few other publications might be able to pull off user micropayments, but it won't move the needle in terms of revenue.

    Flipping this on its head, micropayments via ad revenue sharing will indeed work. The infrastructure to split payments through AdSense and other ad networks exists as does the technology to identify content proliferation across the Web.

     

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  11.  
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    Brett, May 15th, 2009 @ 9:33am

    spread 'em

    Just spread out the payment to cover access to the entire site for 24 hours. So if you see an article you like, by a 24-hour subscription for $2. Or maybe a 1-hr sub for $1? There has to be an optimized price point there. And a timed site-wide subscription would be much easier to manage than per-article/user access cookies.

     

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    kirillian (profile), May 15th, 2009 @ 9:48am

    Re: Micropayments

    Yes...and the processors won't have ANY incentive at all to make the process for viewing the articles as difficult as possible. And I'm sure that they will re-invest in improving and updating their systems rather than lining their own pockets with the money they make...
    /s

     

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  13.  
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    Haley, May 15th, 2009 @ 10:06am

    Re: spread 'em

    Hmm, I see a lot of "site slurps" happening under that plan... access gone in an hour or two? Just power up a site-downloader and pull every accessible page on the site onto my local drive, then browse later.

    Some might even offer this as a "wise buyer tip". :pppppp

    This just needlessly adds traffic to the net and burden to the site while perpetuating the falsehood of scarcity. There really is no digital scarcity, and one should be careful when attempting to artificially create it for whatever purpose. It doesn't fit with the reality.

     

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  14.  
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    Jason, May 15th, 2009 @ 10:34am

    Re: Do you mean that people don't like good journalism?

    Really? 20 cents per article? What's a copy of the paper itself cost? $1.50? Seriously? You would pay 20 cents per article and only get 7 1/2 stories for the price of the whole paper? You don't even get to haul it around and look cool or leave it as a happy present for the next person to sit at your favorite bench, booth or coffee shop.

    How would you like to be the advertiser? "We'd like to thank you for choosing WSJ for your new campaign. By the way we're intentionally limiting the number of people who will see it."

     

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  15.  
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    bjorn, May 21st, 2009 @ 4:30am

    Paying without sampling?

    If you don't know if an article is worth something until you've read it (or a significant part of it), why would you want to pay for it up front? Perhaps a micro-payment scheme where you pay after you've read the article, or read half the article, or want to see the pictures, or ?? would work better? But probably not...

    The web isn't about consumption, it's about actively investigating (and partaking in) your own personal interests. We're not the couch-potato generation and we'll never be satisfied with only the choices on the remote control. In our reality there are multitudes of voices and unlike our parents, we don't want anyone to tell us that "this" is the selection of issues we should care about, or "these" are the only views worth considering.

    The reason newspapers are dying isn't because they haven't found the right micro-payment system. It is because they're catering to a generation that believed authority and notoriety came from merit, and who's opinions therefore mattered .. more.. somehow..?

    If newspapers don't change and die out, then nothing of value has been lost.

     

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  16.  
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    RexoftheInternet, May 23rd, 2009 @ 12:50am

    Micropayments, life is full of them

    Micropayments = Paying for Every Breath You Take
    by Daniel Tunkelang - said "I'm highly skeptical of micropayments. The literature on human decision making generally shows that we don't like repeatedly incurring small costs."

    Yet, we already do it all the time. Spare change is out totally disposable income. Parking meters, coffees, snacks, tip jars, placating bums... it's just that it's EASY and we don't notice. We just flip a quarter in a jar and it's done. We just have to figure out how to make it easy and give up on ridiculously long data collecting hurdles.

    If you wanted to put a buck in a tip jar but the cash register person wouldn't let you until you gave him your zip code, age, industry, etc. you'd walk out with your buck. Quickly, as to not go on a slapping frenzy.

    Make it easy and don't be grabby data collectors and we'll micropayment all over the joint, just like we do in the real world.

     

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  17.  
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    sprearson81 (profile), Jun 9th, 2012 @ 6:29am

    It just makes your head spin.

     

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