WSJ To Try Micropayments: What A Bad Idea

from the watch-this-fail dept

There are all sorts of bad ideas around trying to get people to pay for news, but perhaps the worst is the idea of micropayments. Micropayments are trotted out every other year or so as the "savior" to paid content by people with little understanding of economics. The problem is that micropayments never work in a competitive market. First, the "cost" is much bigger than the nominal sum, because of the mental transaction costs ("is this worth buying?") that add friction to the process. Second, and more importantly, it's a self-defeating move. In adding micropayments, you automatically decrease the value of the content. This may sound paradoxical, but what matter is why and how people value content. These days, many people value content for the ability to engage with it, comment on it and share it with others. Micropayments take away that ability, and thus decrease the value of the content. In some sense, adding a micropayment option gives people fewer reasons to pay! Micropayments have been tried over the years, and every time someone announces them the press goes all nuts about how they're the business model of the future for content. And then the projects go nowhere for a few years, whither and die. And the press never seems to notice.

So, it should probably come as little surprise that it's the press itself that's going to try such a plan. The Wall Street Journals' managing editor, Robert Thomson says that the WSJ is going to start offering a micropayment offering for individual articles. Of course, it sounds like it's not always micropyaments either:
"It's a payments system -- once we have your details we will be able to charge you according to what you read, in particular, a high price for specialist material."
A "high price," by definition, isn't a micropayment of course. And it's just as likely to fail miserably. Putting a paywall in the way of people, and they'll find the content elsewhere. Put a paywall in front of good content, and it just opens up the opportunity for other, smarter, publications, to provide the news for free and run away with all the advertising money.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Crosbie Fitch, May 11th, 2009 @ 2:15am

    Macropayments will work

    Cory Doctorow probably has it right: Macropayments are what will work.

    This is where there is no paywall. No copyright. No publisher.

    If you want to pay the author or artist to produce more work you can pay them to do so directly. Naturally, you'll only pay those authors or artists that you like, and this is the way it should be.

     

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    Crosbie Fitch, May 11th, 2009 @ 2:18am

    Cory Doctorow

    Here's a link to Cory's article on Macropayments. [http://www.locusmag.com/Features/2008/09/cory-doctorow-macropayments.html]

     

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  3.  
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    Andrew, May 11th, 2009 @ 2:25am

    What a great idea

    Love the micropayments idea. I think the argument that people get value from "sharing content" and making comments is just wrong. I like to read comments and don't like to make them - I usually make them as a contribution to you, the author of the article, to try and get you to publish content better focused on my interests.

    The reductio ad absurdum of user generated content is twitter, a site that doesn't even have content, just comments. Will be interesting to see how that pans out - but so far it looks pretty awful to me.

     

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  4.  
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    joshua jones, May 11th, 2009 @ 2:38am

    Re: What a great idea

    Andrew, I'm afraid that I must have missed your point. You say that the commenting and interaction doesnt add value to you, but you find your value in other peoples' comments. That is still a part of the interaction, even if it is not yours. Content behind a paywall will not receive as many comments as that which is open and free, because the number of paying readers will not equal the current number of non-paying readers. So the value will ultimately be diminished.

    You then state that you make comments in order to guide the authors toward content that you are interested in - possibly one of the finest uses of comments since, when looked at as a whole, they will ultimately work to keep the author on point and relevant in their future posts. If you have to pay per individual article, only to then need to make comments to get the authors to even write about anything you are interested in... I know it wouldnt take me too many purchases to get tired of that cycle.

    That is even assuming that the people setting up paywalls are also people that understand the value of comments and interaction, and keep that part of the system. Honestly, I wouldn't be surprised if after setting up a micropayment system, the comment systems were completely removed. But that is purely speculation on my part.

     

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    Anonymous Coward, May 11th, 2009 @ 2:46am

    "These days, many people value content for the ability to engage with it, comment on it and share it with others. Micropayments take away that ability..."

    I don't follow why micropayments take away that ability. Can any one explain for me? Thanks.

     

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    Joshua Jones, May 11th, 2009 @ 2:57am

    Re: Anonymous Coward

    It will not completely take that away, but it will remove its usefulness. If you send a link to 10 of your friends to an article that they have to pay just to read, how many would? Then consider how easily those same 10 friends could find the same information on a different, free site. Now how many would pay for it?

    You will, in the end, feel as though the value of what you paid for is diminished as your ten friends tell you about how they just went to another site and read it for free.

    Then, in essence, by alerting your friends to the event or information that you had just read, you will have helped other sites in bringing in more traffic to help with ad revenue, while the site you originally visited has earned only one sale off of it.

    That's assuming that you would even send your friends a link to a news site using micropayments. Personally, I would never send such a link to my friends, as I wouldn't want them to pay for something that I know they can get for free elsewhere.

    My reasoning here could be wrong, this is simply how I look at it.

     

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    Justin, May 11th, 2009 @ 4:02am

    Ya, but this is the WSJ. They are in a different playing field then the rest of the newspapers. The readers of the WSJ are often looking for a leg up on their competition and feel that the WSJ might sometimes give them a scoop or insight into stock valuations.

    As a result, their readership likes that the content isn't shared but for those willing to pay for it. And therefore, they are willing to pay for it.

    Not to suggest it will work, but if it will work anywhere, I suspect it will be at the WSJ.

     

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    Blatant Coward, May 11th, 2009 @ 4:08am

    Micromanagement

    How long until WSJ finds that rather than having friends referred to their for fee sites, that the few who do pay just copy and paste the article's relevant points on Twitter?

    Will we then have the WIAA?

    If I make a screenshot of an article I cannot copy would this be under the WIAA or the RIAA?

    Oh Andrew, love the I don't like to comment comment. You should try lolcats next. How about the Twitter Wiki ( http://en.wikipedia.org/wiki/Twitter ) entry? "unique monthly visitors at roughly 6 million and the number of monthly visits at 55 million"

    Personally I don't use Wiki, but any fans of the WSJ should be used to it as the source of all knowledge.

     

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    anais, May 11th, 2009 @ 4:18am

    micropayments

    i like omelettes

     

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  10.  
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    lulz, May 11th, 2009 @ 4:22am

    Re: Macropayments will work

    This is where there is no paywall

    To some people, a nominal cost is a paywall, in the sense that they don't think it's worth paying, maybe a quarter, for a newspaper they could buy for fifty cents that includes multiple stories..

    No copyright.

    I haven't read the WSJ copyright regulations, but my initial assumption here is that since the journalists are employees, they are paid for their work (with the money collected from the micropayments) but do not hold any exclusive copyright because they write for the WSJ.
    Though I would like to know if the journalists do hold copyright on their stories, feel free to prove me wrong.

    No publisher.

    No; the publisher in this case is the newspaper.

     

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  11.  
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    lulz, May 11th, 2009 @ 4:26am

    Re: micropayments

    No onions on mine, please.

     

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    David T, May 11th, 2009 @ 4:46am

    Re: crowsourcing value

    If you really want to get eyeballs on an article, you have to get the interweb to crowd-share it. Everything should be easily linkable from forums like Facebook, etc. Micropayments on news stories break that interaction by their very nature, aside from being what geeks call "lame" in general.

     

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    Yeebok (profile), May 11th, 2009 @ 4:49am

    Is WSJ a Murdoch one ? They all seem to be talking about it, eg news.com.au and australian.com.au

     

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    BobinBaltimore (profile), May 11th, 2009 @ 5:30am

    Missing the Mark

    Mike, you're comment that "These days, many people value content for the ability to engage with it, comment on it and share it with others. Micropayments take away that ability, and thus decrease the value of the content." I get that you think micropayments are a bad idea. (Increasingly, TechDirt comes across as seeming to espouse that any payment is a bad idea and spends a lot of time justifying and attempting to justify how payment for content is not only untenable but unethical...) What does any payment system have to do with the presence or lack of presence of engagement functionality? Your thought seems to directly relate payment with a lack of engagement. How do micropayments take away the ability to engage with the content or, rather, other readers on content? Yes, sharing can get a bit dodgy, but there are plenty of ways to handle that, several of which WSJ has been using for years on paid content. It does mean that the community engaged on that content is likely to be more limited, but I think there might actually be some merit to that. Most communities are limited or self-limited in some way anyways. But the extension of the "right to free content" to some kind of "right to comment and engage on said free content" just takes an already tenuous argument and stretches it in a contorted way. I'm not saying that micropayments are a panacea, but this particular argument is rather thin.

    As for the restriction on engagement devaluing the content itself. Well, maybe. There are readers who value the content, and there are readers who value the reaction to the content. And some value both. But the bottom line is that without the content in the first place, there is little else to do. The problem at hand for these businesses is exactly that: the value of the content. They have seen 10 years of their content being given away and circulating all around the globe without generating revenue, making the content less valuable to them as a business. Oh, yes: the news is a business, in case anyone had forgotten. This isn't about serving the consumer it's about finding the balance between audience development/retention and a rational revenue stream.

     

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  15.  
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    Anonymous Coward, May 11th, 2009 @ 5:39am

    Re:

    Rupert bought the WSJ in the last year or two.

    He should manage to run it into the ground in the next decade.

     

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  16.  
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    JohnForDummies (profile), May 11th, 2009 @ 5:39am

    I'm all for paying people when they provide something of value... but quite honestly, when I go to a linked news story, and it requires me to register for even a FREE account before I can read it, I generally hit the back button and either a) find the story somewhere else, or b) do without.

    What happens if you've read an article, which they've automatically charged you for, and you feel that you were short changed because it sucked or didn't deliver what it promised? Do you get a refund? Do you get to peruse the article's contents before you agree to make the payment? That's how it works when I purchase a magazine or newspaper at a newstand. And at least then I get a physical object that I may keep, pass on to someone else, or discard--that's my perceived value. An online story that I just "bought" (rented) is useless to me.

    @Yeebok, yes, Murdoch owns the WSJ: http://crooksandliars.com/2007/07/06/rupert-murdoch-buys-wall-street-journal

     

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  17.  
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    lulz, May 11th, 2009 @ 5:54am

    Re: Re: Macropayments will work

    Sorry, I didn't catch the macro- part.
    This makes even less sense. Why would someone pay more for something they don't want to pay for in the first place?

     

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    Daniel Tunkelang (profile), May 11th, 2009 @ 5:58am

    Re: JohnForDummies

    I'm don't think micropayments will work for reasons that have to do with the psychology of decision making.

    But your "no refund" argument doesn't sway me. You don't get a refund on movie rentals, pay-per-view, jukeboxes, etc. And, even though it's true that you purchase a daily newspaper (or at least someone does), I daresay it's a rental in practice, since most people don't keep the paper for more than a day.

     

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  19.  
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    Walter Cronk, May 11th, 2009 @ 6:21am

    Payments will not diminish the value. They can only serve to increase value for one simple reason - it keeps the morons and drive-by idiots at bay.

    Look at the "news sites" that are out there - DailyKos, Huffington Post, this site, TechDirt and even some local newspapers. The comments on these sites do little to enhance the news value and are often hate-filled diatribes and rants.

    Personally, I want a "gated" community for my news. I want to know who it is that's posting a rant, or at least can be identified if they slander someone. The belief that everything on the internet must be free has to end or news sites will never survive. With the impending death of the printed newspaper, moving to an electronic platform, with ads as their primary source of revenue is ludicrous. Ads, often blocked by blocking software, will never support a quality news site. Good information is worth paying for and news-for-pay is the model that will succeed.

    Sharing an article with non-paying customers can easily be accomplished and could actually serve as a news site's "circulation" booster. The recipient of such an invitation will be allowed to view the article sent by a friend, but will not be able to read the entire site. Easily done with a cookie or special one-time use URL. Then the recipient is offered an opportunity to subscribe. It would be just like the "blow-in" cards we all hate in a magazine, but are one of the best ways to increase readership.

    It won't happen overnight, but with the disappearance of newspapers, quality news sites will begin to appear, and they won't be free. It may take a few years, but it will happen.

     

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  20.  
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    Anonymous Coward, May 11th, 2009 @ 6:32am

    So will my nifty iPhone app that let's me readall the content for free start charging me? If so, adiós to that app. You will always find a small subset of your readership who will pay but many will seek information elsewhere. If you recall The Street .com had everything behind a paywall. Now think back to how annoying it was to see a Street article in a search then find the link took you to a sign up page. If you are like me and 99.99% of the rest of the planet you probably just skipped the article then moved on to another source.

     

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  21.  
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    Anonymous Coward, May 11th, 2009 @ 6:33am

    Need a mechanism

    I wish WSJ well. Whether this or that web content is worth the micropayments, I lament that there is no micropayments scheme in place.

    Sending a check by snail mail costs the sender almost a buck. Typing in credit cards is a hassle, puts my entire financial life at risk. Both have transaction large transaction costs on the other end.

    There's lots of stuff I wouldn't mind paying a couple of bucks for, but there's no convenient way to do it. I spend five bucks at Arby's and don't complain. Within 30 minutes it's no longer usable, and within 48 hours virtually the whole thing has become the property of my local wastewater treatment plant. Yet I don't complain that there's no refund process.

    There are a lot of other things I wouldn't mind paying a penny for, but no one is going to pay 100 pennies in transaction costs.

    It's not rational that everything on the internet is free, it's a consequence of the irrational internet bubble, which created unreasonable expectations. It should be cheap, however, really cheap, since the cost of making a copy is very close to (but not equal) zero. The path forward will make the transactions cost a small fraction of the sale cost. Then the price to the consumer can be so small that he can consume vast quantities, but the profits to the producer will be enough to keep them going without having to bring in third parties to keep the game going.

     

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  22.  
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    Haywood, May 11th, 2009 @ 6:37am

    ideal vs reality

    Point is; there are alternatives, good alternatives. A few short years ago, that might not have been true and WSJ was the best place to get financial news. Now there are many sources that have good, in depth reporting on financial matters and many have better delivery systems. I for one will not pay. I don't even want to register for free, it interferes with my click throughs and I'm 60. Imagine how click conscious the younger folks are.

    There is also the matter of the payment it self. I wouldn't be ruined by a few $0.25 charges, but I'm not giving my credit card info to them to keep. I don't even do that for online retailers. I would much rather type it in each time. One more data base, one more hacker target.

     

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  23.  
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    Anonymous Coward, May 11th, 2009 @ 6:38am

    Is it just me or does this comment thread seem to have posts from paid shills for newspaper industry?

     

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  24.  
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    Joseph, May 11th, 2009 @ 6:50am

    Re: um...no

    That is what publications always tell their advertisers people about their readers. They are looking for a leg up, they are more engaged, etc. The truth is a reader is a reader, if they like the content they will pay for it. But if you put up a pay wall people with think twice before shelling out. Especially if they already subscribe to the traditional publication.

    Then they ask themselves, "I know the WSJ knows i want a leg up on my competition" (Who also read the publication) why aren't they giving me this content for free?

    Overall your argument is flawed and my guess is that you work for the WSJ, because no one is going to pay micro payments because they think their competition won't. Make the content free and get paid with ads. It makes a lot more sense for a business.

     

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  25.  
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    Chuck Norris' Enemy (deceased), May 11th, 2009 @ 6:52am

    Enter CC number

    How many people want to enter their credit card info for a small charge? Then multiply that times all the sites that start asking for it. Then phishers will set up "news" sites asking for the same info. Hackers will have more insecure databases to snag. This looks bad!

     

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  26.  
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    John Duncan Yoyo, May 11th, 2009 @ 7:11am

    Re: Enter CC number

    A micro payments system would need to work more like an Easy Pass where you put $30 in an account and have it diminish that account by say a quarter every time you pass through a gate. When the account drops below a set amount- say $5 it dings your credit card for another $30.

    Someone would need to setup a similar service to paypal to manage all this and be a fairly universal service to prevent a plethora of competing services to keep down the amount of money individuals would have out for micropayments.

     

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  27.  
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    foogooDan, May 11th, 2009 @ 7:27am

    agreed with John

    Spot on John! Most of the confusion and/or failure of microtransactions in the past has been due to the lack of one single virtual currency provider. At the end of the day, publishers just want their due: financial compensation for work well done. What they DON'T want is to have to monkey with 32 flavors of payments. Give publishers and readers one unified format, and the mechanism has a chance. Without it, we're just back to square one scratching our heads. While that's worked in the past...I truly believe this is the last chance to get it right.

     

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  28.  
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    Crosbie Fitch, May 11th, 2009 @ 7:33am

    Re: Re: Re: Macropayments will work

    Let me turn it around for you.

    Why would someone pay ANYTHING for a copy that they can make themselves for nothing?

    The market for copies has ended. The monopoly that was supposed to keep prices above zero is no longer cutting it. Wake up and smell the coffee.

    So, stop selling copies, or trying to nickel and dime people for copies they don't need. Micro-charging for copies delivered was a doomed venture at the outset.

    What people are quite happy to pay for is ART - not copies, but the actual intellectual work - like any other craftsman. People have been paying for good work since time immemorial.

    What astounds me is the skepticism that people will pay for good work rather than steal it. Believe it or not, but the latter are a tiny minority.

     

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  29.  
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    Undertoad, May 11th, 2009 @ 8:31am

    Please read Clay Shirky on micropayments

     

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  30.  
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    Anonymous Coward, May 11th, 2009 @ 8:42am

    Re: Need a mechanism

    Arbys, scarce good.
    News, infinite good.

    Poor comparison

     

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  31.  
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    Rich Pearson, May 11th, 2009 @ 8:55am

    Remove the micropayment friction and share ad revenue

    A solution that is much more likely to succeed is to allow consumers to read the news wherever it appears with the original creator getting paid their fair share whenever their work is reused in full.

    This removes the mental transaction costs and gives the creator and distributor incentive to let the Internet do what is does best.

     

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    The infamous Joe, May 11th, 2009 @ 10:02am

    Re: Missing the Mark

    Increasingly, TechDirt comes across as seeming to espouse that any payment is a bad idea and spends a lot of time justifying and attempting to justify how payment for content is not only untenable but unethical..

    I read here at Techdirt quite often, and I can't remember any of the Techdirt bloggers ever saying that you were a bad person for charging for an infinite good-- just that you were a foolish person for doing so. However, feel free to correct me with links-- I forget plenty of things.

    How do micropayments take away the ability to engage with the content or, rather, other readers on content?

    If you charge to view the content, then less people will view the content. If less people are viewing the content, less people will comment on the content than if the content were given away for free. I'm not sure if that's what you were asking.

    They have seen 10 years of their content being given away and circulating all around the globe without generating revenue, making the content less valuable to them as a business.

    Now, I've never worked for a newspaper, but don't they make their money selling ads? So, if you're in the ad selling business, it makes sense to get as many eyeballs on your ad space as humanly possible so you are more attractive to those looking to buy ad space. If you limit the eyes, you hurt your business.

    However, you are correct in that the content has been given away for free for a very long time, which makes it even more ridiculous to think that people are going to magically start paying for it even though the newspapers haven't added anything new worth paying for.

    No matter how many newspapers try this, there will *always* be another site that will give it away for free-- thus defeating the payment system.

     

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  33.  
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    The infamous Joe, May 11th, 2009 @ 10:16am

    Re:

    Personally, I want a "gated" community for my news.

    If you make people pay to view/comment, then most likely you'll only get people who agree with the author to pay, and thus to comment. That's not a discussion, it's masturbation. I *like* to see a rational, opposing viewpoint-- it either helps me find a better way to state my views, or changes my views on whatever topic is being discussed.

    The belief that everything on the internet must be free has to end or news sites will never survive.

    ..a business that can not compete in the market due to its own inefficiencies deserves to go out of business.

    Good information is worth paying for and news-for-pay is the model that will succeed.

    Good information isn't paid for now, it's given away for free, supported by ads. How much better are they going to make the good information to make it worth paying for, since only a fool would pay for something that was given away for free without having value added first.

    It won't happen overnight, but with the disappearance of newspapers, quality news sites will begin to appear, and they won't be free. It may take a few years, but it will happen.

    Quality news sites are already here, for free. I don't use any of the major news outlets for news, and I'm often better informed than those that do. Making it harder for people to read your content will only serve to make you go out of business faster.

     

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  34.  
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    Anonymous Coward, May 11th, 2009 @ 12:10pm

    Re: Re:

    If you make people pay to view/comment, then most likely you'll only get people who agree with the author to pay, and thus to comment. That's not a discussion, it's masturbation. I *like* to see a rational, opposing viewpoint-- it either helps me find a better way to state my views, or changes my views on whatever topic is being discussed.
    Free invites idiots. Why do you think nightclubs have a cover charge? Just for obscene profits? Cover charges keeps out the jack-offs who only want to piss on the place. Same is true on the internet.

    Good information isn't paid for now, it's given away for free, supported by ads. How much better are they going to make the good information to make it worth paying for, since only a fool would pay for something that was given away for free without having value added first.

    Just because there are ads, you think it's for free? Media advertising is a tax on all products, whether that media be television, radio or newspapers. There is no free beer in this world, chump.

    Quality news sites are already here, for free. I don't use any of the major news outlets for news, and I'm often better informed than those that do. Making it harder for people to read your content will only serve to make you go out of business faster.

    Name a few. Name a news site that's not connected to another media outlet that has real journalists and fact checkers, like the newspapers used to have. Simply compiling links isn't news.

    A business will emerge that charges for its content and at some point, when all the under 30s of the world no longer believe John Stewart or Colbert is of any use, they'll either pay for the information or they'll be dumber than they already are.

     

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  35.  
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    alternatives(), May 11th, 2009 @ 1:08pm

    Re: but this is the WSJ.

    Ya, but this is the WSJ. They are in a different playing field then the rest of the newspapers.

    So? *YOU* might think this makes a difference, but as you state "Not to suggest it will work" - so you know that the odds do not favor them. And really - a pox upon them. They are not interested in 'the truth' - just 'a truth' that attempts to keep the people in power in power - even if they do not deserve it due to their actions.

    If I am going to hand over cash, I'd rather do it to people speaking truth to power.

     

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    Anonymous Coward, May 11th, 2009 @ 2:00pm

    Re: Re: Need a mechanism


    Arbys, scarce good.
    News, infinite good.


    Not the point. The point is that five bucks isn't too much money for even for a non-durable good of questionable quality.

    There is a reasonable mechanism that allows me to pay that five bucks. There's no reasonable mechanism that lets me pay one cent for access to electronic content. If there were, a vast market of commerce would open.

    There are far more people who are willing to produce stuff if there's visible way of getting paid for it than there are who who are willing to give away their product in hopes that somehow they can cash in on the good will thereby produced.

    Oh, and on the "news is free" kick. News, once gathered, edited, etc. might be very cheap to re-distribute electronically, it's not free to produce in the first place. Somehow, somebody has to get out of bed and gather and edit it. Maybe somehow magically a corps of volunteers will do it for free, but somehow I doubt it. Shills for special interests will easily outgun anybody who has to find some other way to pay the rent. Whoever pays the fiddler calls the tune, and I'd at least like a shot at calling the tune.

     

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  37.  
    identicon
    Tgeigs, May 11th, 2009 @ 2:59pm

    Re:

    "The comments on these sites do little to enhance the news value and are often hate-filled diatribes and rants."

    They are not, you fuckface pole smoking, shit for brains. There's nothing hateful about it, you fuck. This is just how my fucking generation talks, because we learned to speak English fighting overseas in you old people's bullshit wars, you assclown.

    Love you, buddy!

     

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  38.  
    identicon
    Joshua Jones, May 11th, 2009 @ 3:50pm

    Re: Re: Re: Need a mechanism

    Oh, and on the "news is free" kick. News, once gathered, edited, etc. might be very cheap to re-distribute electronically, it's not free to produce in the first place. Somehow, somebody has to get out of bed and gather and edit it. Maybe somehow magically a corps of volunteers will do it for free, but somehow I doubt it. Shills for special interests will easily outgun anybody who has to find some other way to pay the rent. Whoever pays the fiddler calls the tune, and I'd at least like a shot at calling the tune. It seems to me like you are now getting back to the same argument provided by the music industry. Nobody is saying that nobody can or should make money off of the news. What we are saying, and the people at TechDirt have been saying, is that the newspapers are confusing where the true value is. The content iself does hold some value, yes, but that content can be obtained many places on the internet for free - this is how things are and will likely continue to be, so it only makes sense to make plans with that in mind. What adds value that cannot be copied recreated elsewhere is your community. The people commenting on, sharing, and ultimately giving direction for your articles. In part, this has always been the real value of news sites, it is only growing every day. In the past, the goal has been to monetize that community through selling ad space. News sites can continue to do this, but if they say that it is not enough, then they need to find another way to monetize what is truly of value - their community. If you put up your content behind a paywall, then your community growth halts, stabilizes, and stagnates. An audience that is not growing is of no real interest to advertisers. If you leave your content open and viewable to all, and work on finding ways to further connect with that community, then you will see that audience grow, diversify, and ultimately add very valuable commentary to your articles. An active, participating community is more valuable than your own writers' opinions on the events that are occurring around the world. As a friendly reminder: you don't MAKE the news, you just write about it.

     

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  39.  
    icon
    mermaldad (profile), May 11th, 2009 @ 6:11pm

    Years ago I read an article which described an experiment in computer modeling of evolutionary systems. In the experiment, a simulated organism with a very small genetic advantage was found to inexorably outcompete other organisms. It didn't matter that the advantage was tiny. The net effect over numerous competitions was to favor the fitter organism.

    Of course, real world companies are much more complex than such a computer simulation, but I suspect the same principles apply. The WSJ may find a niche market of folks who will glady micropay for "high quality" news, but in the broader mass market, I suspect they will get creamed.

     

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  40.  
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    Schröder, May 11th, 2009 @ 7:45pm

    Re: Re:

    WORD!

     

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  41.  
    identicon
    pr, May 11th, 2009 @ 7:54pm

    Re: Re: Re: Re: Need a mechanism

    The content itself does hold some value, yes, but that content can be obtained many places on the internet for free

    How does it get onto the internet for free? Does the news fairy provide it? Do government agencies and corporations write it up and hand it over? Actually, the answer to the latter question is, "yes", they do write up a lot of self-serving fluff. If you want to find out what's really going on somebody has to twist some arms. I would rather have that guy (and his editor) at least a little beholden to me, rather than being completely at the mercy of some advertiser.

    All this valuable content gets put on the internet for free due to an accident of history. During the internet bubble there was a fantastic tsunami of capital thrown at internet ventures, which subsidized the production of all sorts of things. To get attention amidst all the noise people gave away things that it didn't make sense to give away. Remember when NetZero really cost $0? That has created unreasonable expectations for free content. The actual reporting organizations are in a bind because they've been more or less forced to make their product available for free, even though they know it's ultimately going to kill them. That's going to stop someday. Here are some scenarios. 1) They become purely advertiser supported, (although internet advertising has thus far largely been a flop) and a) still somehow maintain some sort of editorial credibility or b) become ventriloquist dummies for PR flacks.

    2) Enough of them go out of business that the few who are left have enough market power to demand payment.

    3) We stop with our unreasonable expectations that we should get stuff for free and pay for what we want.

    (3) would leave us in the healthiest position, but I'm betting on 1b, then 2.


    As a friendly reminder: you don't MAKE the news, you just write about it.

    Actually, I do make the news, and I don't write about it. It appears that you have somehow erroneously concluded that I'm a shill for the news industry. I'm a mechanical engineer who makes things that actually are newsworthy. What's important here, however, is that I'm a customer of the news industry, one who hopes they can stay in business as some sort of healthy, independent voice. If they are going to do that, someone's wallet is going to have to get lighter. I think we're better off if the people who actually have an interest in getting the news reported (the readers) pay for it, rather than advertisers. The editor needs to be more afraid of us than them.

    Distribution in the modern age should be cheap; production is not free. Someone needs to pay the total cost of both. I'd prefer that the people are paying enough of the freight that the corporate flacks don't completely run the show.

    But getting back to my original point, a mechanism for making small payments would be a really good thing. I don't know for sure how it would work. Buying by the article sounds kind of ridiculous, but there's real power in big numbers.

    Big number * 0 = 0.
    Big number * small number = possibly something significant.

    The problem we've seen in internet paywalls is that the prices have always been preposterously high. Most have wanted at least as much for the internet subscription as the print one, which is nuts, given that the distribution cost is next to nothing. On the other hand, given current payment methods, five bucks isn't even worth messing with, either for the payer or the recipient. If there was a way that I could pay a penny, or a dime, it would create a world of new opportunities.

    On the other hand, maybe they don't even need that. Suppose the news industry bundled things, like 100 major newspapers for $30 a year, $500 for a corporate site license. Everyone would sign up. Maybe the ISPs would include it with the package. That would be recognizing the power of the internet while providing a way for somebody on the other end to get paid directly, rather than relying on largess from third parties.

    Whew! I should submit this as a dissertation. Maybe I can get another degree.

     

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  42.  
    identicon
    Grae, May 12th, 2009 @ 10:37am

    The Real Value of any Given Thing

    First, the "cost" is much bigger than the nominal sum, because of the mental transaction costs ("is this worth buying?") that add friction to the process. Second, and more importantly, it's a self-defeating move. In adding micropayments, you automatically decrease the value of the content. This may sound paradoxical, but what matter is why and how people value content. These days, many people value content for the ability to engage with it, comment on it and share it with others. Micropayments take away that ability, and thus decrease the value of the content.
    This is so true, and it's hilariously bad how many people have such a hard time understanding this.

    There's a fairly basic way to express this:
    {real value} = {perceived value¹} - ({perceived difficulty to obtain²} + {perceived cost³})

    ¹All the benefits someone believes they would get from a given product. This may or may not include the actual product itself: for example, some may place more value on the community around a given product.

    ²E.g.: setting up and using a torrent client may be simple to some and insurmountable to others. The same can be said of navigating complicated DRM schemes. Anything that forces the consumer to think about why they should consume your product more than is absolutely necessary.

    ³Everyone values their time and money differently, a price set by the vendor that is reasonable for one is unreasonable for another. The potential to be under legal cross hairs is also a cost factor that people consider with varying degrees of importance.

    The important thing to take away is that, as a creator (or rights holder), the value you believe your content to have is meaningless. The real value != perceived value alone. Making it more difficult to obtain your content (physical or digital) and/or raising the price will decrease the real value of your content.

     

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  43.  
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    Crosbie Fitch (profile), May 12th, 2009 @ 4:43pm

    Re: Re: Re: Re: Re: Need a mechanism

    A way that you could pay a penny to a blogger for each article they wrote?

    Like 1p2U.com (one penny to you)? That's what I'm working on.

     

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  44.  
    identicon
    The Digitalists, May 12th, 2009 @ 9:50pm

    What would micropayments do to journalism?

    What I haven't seen discussed anywhere is what effect a micropayment world would have on the quality of journalism. I submit that judging each individual article on their profitability would just accelerate the "race to the bottom" of journalistic quality. Doesn't matter how good your article is, only how many people you can sucker into clicking on the payment icon. Expect a lot fewer "boring" topics like foreign policy and a lot more "Top 10 Sexual Positions".

    More thoughts here: http://thedigitalists.com/2009/05/12/what-would-micropayments-mean-for-journalists

     

    reply to this | link to this | view in thread ]


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