Time magazine writes an article this week on “How to Save Your Newspaper.” Their conclusion? Micropayments. Basically, allow people to pay a small fee, like 5-25 cents for every article they read. The dominant platform for this doesn’t really exist since Paypal charges fees too large to make this viable. I used to think that this was a perfect business for Google to be in: you Google something, see the price (if any) for the content, and click the credit button on your Google toolbar to pay for the article/result. But, regardless, even with a good platform for micropayments I don’t think it’ll work. Why? Because I don’t think I’d pay to read an article ala carte that I’m not sure I’ll like. I imagine the abandon rate on articles is very high. Though, I suppose this might be because it’s free, but I don’t think so.

So what would work for the reporting business?

1) Content wants to be free on the web. Or, rather, we want everything to be free on the web, but we also want it to be valuable. That’s why I believe the sustainable future for deep reporting (magazines + newspapers) will lie in the device. This might mean the Kindle and the evolving world of smart subscriptions. Might I pay, say $2 a month, for the NY Times on my Kindle? I say definitely. In fact, I’d probably pay higher. But at the $2 pricepoint, and with an variable distribution cost of near zero, I’d bet that we’re talking many millions of people who would pay that amount. The economics of print– delivery, printing presses, etc are zero’ed out and we’re left with a far more efficient cost structure. This should translate into a more economical cost, which, I would think, will increase the number of people who will opt to pay. Would I pay to read this on my Mac over the Interwebs? That feels tough to me. Would I pay to have the NY Times “delivered” to my Kindle every morning and auto-updated as the day goes on? Oh yes. Now it might not be the kindle. Maybe it’s the iPhone or whatever other device comes next. Which reminds me that I’m baffled why the NY Times iPhone app is free. It is positively insane. Charge a couple of dollars up front or a small recurring charge. The app is pretty damn amazing (it downloads the content locally so you can read from the plane, subway, etc!).

2) OK, so micropayments might actually work. But not the way everyone talks about them (as basically small debit card payments). I think it could work if we give people credit for doing things on the web. Say I take a survey or watch a commercial. This should give me some credit points that I can use on articles or whatever else. This seems pretty damn obvious to me. Why can’t the NY Times offer a choice of 15 second “commercials” on their site, and I have to watch one of them in order to have access to the site for a session? Or credits to use on articles. This is kind of a no brainer to me. In fact, I should go start a company that does this across the web. Why the hell am I updating my blog when I should be working on this idea?…

6 Responses

  1. Surya, I love the end of your post. I've got the same issue. Lots of ideas, lots of talk, lots of blog updates. Little action. I very much enjoyed that last sentence.

    I agree. I don't see people paying to consume content on their computers. But, portable devices…that does feel a bit different. And, I love the idea of giving people a choice: 1. Watch this ad and enjoy our content or 2. Pay us for the content and we'll skip the ads for you. I know Pandora does this. Do you know how that's going for them? My guess is most people think: "Yeah, I can deal with a 30 second ad…just please make it relevant." And, that's probably a better revenue model for most content providers vs. the minority that would pay (probably a low sum) for a no ad platform.

    1. Thanks– I think there are a lot of us who need to put more things in action! I have no idea how it's going for Pandora, though from everything I've read, I think they need a lot more money than their current model is bringing in. Though you'd probably know more than me from your conversation with them 🙂

  2. You know – the internet is not really free. I pay around $50 per month for High Speed Internet. Rather than micropayments that could add up to a lot, why not offer tiered services from your ISP that would include certain things – ex: pay an extra $5 per month to be able to legally download music, or an extra $1 for video content etc. That way you can budget a fixed cost, get what you want and the service providers get paid.

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