Posts Tagged ‘pc2011’

The birth, death and resurrection of micropayments

March 7, 2011

Are micropayments dead? They were never born.- Jeff Jarvis, blogger and CUNY J-school prof

My favorite panel at the paidContent 2011 conference was “Paying it Forward: Paywalls, Meters & Subscriptions,” which consisted of an all-star panel including Journalism Online Co-Founder (and former Wall Street Journal publisher Gordon Crovitz), Financial Times.com Managing Director Rob Grimshaw, Atlantic President Justin Smith and Google’s Director of Strategic Partnerships Jim Gerber.

Toward the end of the 50-minute talk, moderator Robert Andrews, UK editor for paidContent, asked a question about micropayments. Surprisingly, most of the panelists were dismissive of micropayments. Gerber, who has helped lead Google’s OnePass initiative, said they had not heard much interest in micropayments from the public because of the friction involved in transactions.

Despite early press materials indicating the inclusion of micropayments in its PressPlus platform, Journalism Online continues to primarily advocate for a metered freemium model.

“Down with paywall, up with freemium,” was Gordon Crovitz’ final salvo during the session.

Grimshaw told me after the conference that the Financial Times’ experiments with micropayments were unsuccesful, but I suspect that has more to do with the nature of its business content (in other words, people are still likely to seek out business news, rather than have it find them as is the case with other types of news in the social web environment).

If the expert panel is any indication, then mainstream newspapers appear to have given up any hope in trying out micropayments just two years after headlines proclaimed them as the way to “save newspapers.”

This, in my humble opinion, would be a huge mistake.  Just a year ago, my colleague Jameson Hayes and I outlined how micropayments could work for newspapers (opens PDF document) at the International Symposium on Online Journalism (a more advanced and refined version of that paper is in press in the International Journal on Media Management).

The bottom line is that the only way to tell whether micropayments will succeed as a viable model for online (and mobile and tablet) news is to try them.  As CUNY professor Jeff Jarvis tweeted during the conference, “are micropayments dead? They were never born.”

This isn’t entirely true.  As we point out in our paper, micropayments were tried in the late 90s and early 2000s to no avail. A 2000 Boston Globe article, for example, shouted “MICROPAYMENTS COULD BE THE WEB’S NEXT BEST HOPE.”  Flooz, Beenz, CyberCash, Bitpass, Peppercoin and DigiCash are a few examples of failed micropayment companies from what can be considered the Micropayment 1.0 era.

The difference between Micropayment 1.0 and Micropayment 2.0 is the emergence of the Social Web.  Newspapers may be  (wrongly) hesistant to adopt micropayments, but that does not mean they are not alive and well.

Micropayments have thrived for song and video downloads on iTunes, and micropayments are poised to become even more prevalent for digital goods, gaming and virtual currencies with big time players like Facebook (Buy with Friends)and PayPal (Digital Goods) enabling them.

Not all newspapers have given up on micropayments, either.  At 99 cents for a week’s worth of issues, The Daily is basically a subscription micropayment option.  Hong Kong-based CarrotPay also offers microsyndication technology for newspaper companies to enable seamless micropayments.

Mainstream American newspaper companies may be reticent to try micropayments as a new digital pricing strategy, but there are at least two other huge underserved markets that could experiment with the new business model. Non-American media markets are ripe for micropayments (Google’s OnePass is already in play in many European countries), as are community daily newspapers (under 50,000 circulation) and non-dailies.

Don’t write off micropayments for newspapers just yet.  Newspapers are perfectly poised to contribute in a big time way to the resurrection and rebirth of micropayments on the Social Web.  The models and technology are both in place.  All that is missing are willing newspaper partners.

Now is the time for newspapers to act.

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Of Elephants and Field Mice: The Battle over Paid Digital Content Distribution

March 6, 2011

What happens when you get a former newspaper publisher leading the charge to enable newspapers’ paid digital content efforts in the same room as a top executive of a technology company doing the same thing?

In a classic battle between Old Media and New Media sensibilities, this situation unfolded last week at the paidContent conference held at the New York Times’ EducationCenter.

The result? Some great analogies, a frank, direct offensive by the newspaper guy and a polite, politically correct defensive response from the tech guy.

Gordon Crovitz, former publisher of the Wall Street Journal and co-founder of Journalism Online and its PressPlus system didn’t hold back his criticism of the pricing structures established by Apple and Google.  Of course, PressPlus is a direct competitor of the two giant technology companies.  For an excellent primer of what’s at stake, read Newsonomics Ken Doctor’s recap on the Nieman Journalism site.

Crovitz called Apple (with its 30 percent cut) and Google (with its 10 percent cut) “giant elephants” who are dueling it out and controlling data with their rules and regulations to distribute content on their platforms and through their distribution systems.  Contrasting his company’s product with theirs, Crovitz said that the PressPlus approach allows publishers to own the data and provide consumers access to their brands across all digital channels. The market will naturally move in that direction “if the elephants in the room don’t squash publishers,” Crovitz said.

Jim Gerber, the director of strategic partnerships for Google, took offense at the characterization of being a giant elephant.

“We’re not an elephant,” he said. “We’re not trying to crunch field mice.”

Gerber, who has played a lead role in developing Google’s OnePass (formerly called NewsPass), said that “no one has cracked the code yet” and that there are lots of ways people adopt a product.  OnePass aims to allow access across platforms, Gerber said.  Gerber said that the competition is in its early stages but he classified it as being healthy.  Multiple markets and approaches will help the market evolve so that consumers can buy the products they want and need, Gerber said.

Crovitz belives the key question is whether “the elephants” will permit easy consumer relationships.  Crovitz said that if he watches an HBO show on a Sony television, Sony does not expect HBO to pay them for having the content displayed on their televisions.

Crovitz said the industry is facing an unsure moment but that customers are clamoring for all-access digital models.  The reasons that consumers subscribe to news is not device-specific, Crovitz said, adding that intermediaries should get out of the way and let publishers set their own digital pricing structures.

The economics of The Daily: 1, 1 million, 1 billion

March 4, 2011

The Daily, the Rupert Murdoch-funded first ipad-only newspaper/newsmagazine is doing well, according to publisher Greg Clayman.

Clayman spoke at the annual PaidContent conference at the New York Times yesterday.  This AFP article provides an excellent recap of Clayman’s talk.  Clayman said that “hundreds of thousands” of people have downloaded The Daily app since the publication launched a month ago. He wouldn’t disclose how many people have paid for the app (the free trial period for The Daily has been extended for a few more weeks), but joked that it’s “more than 1 and less than a billion.”

Earlier in the conference, Forrester analyst Sarah Epps said that The Daily would need close to 1 million subscribers to recoup the investment.

I had the opportunity to chat with Clayman briefly when he arrived at the event. We talked about some of the technical glitches that have occured (they’ve released three versions to correct early technical issues).  As I’ve blogged about before, the design and hands-on aspects of The Daily are impressive.  I also commend The Daily for creating a hybrid micropayment subscription model.

I enjoyed the opportunity to meet the man leading this new digital publishing effort.