Alternatives to paid-online-news cliff jumping

By Steve Outing

If you’ve read my columns or blog lately, you’ll know that I’m not a fan of forcing web users to pay for news content. (See previous blog item posted earlier today.) I DO want people to pay news companies to support the important journalism that they do, but the dangers of cutting off a news entity’s non-niche content from all but the tiny minority who are willing to pay is a strategy certain to backfire because it will reduce news companies’ ability to grow online advertising revenues.

Alas, the CEOs of many of the large media companies are much smarter than me, and in their wisdom they are marching toward a future of paid news content on the web in order to save their old product, the printed newspaper or magazine. So far we have these announcements of putting mandatory price tags on news online:

  • MediaNews Group and its 50+ newspapers will begin charging for their local news content.
  • The owner of Philadelphia Newspapers (the Frees Press and the News), Brian Tierney, recently told Fox News that his website (Philly.com) probably will introduce a paywall by the end of the year.
  • News Corp. chief Rupert Murdoch has expressed his desire to see newspapers around the world follow the example of his Wall Street Journal and charge for news online in a hybrid model. His Sunday Times in London is said to be pondering a web news paywall.
  • Journalism Online founder Steven Brill is bragging that he got a non-skeptical reception at a recent meeting of newspaper company CEOs, that’s he’s got a couple of letters of intent to sign up for his upcoming paid-content solution for publishers, and more will be signing on very soon.

I also pick up a lot of rumors, and know of other major newspapers supposedly planning or building paid-news walls for their websites. So it sounds like a growing group of publishers are getting closer to the cliff.

If the new-journalism infrastructure had risen adequately to replace the level of watchdog and quality journalism of the newspaper industry, I wouldn’t care so much. But we’re not there yet, so I’d prefer that newspaper companies survive and figure out how to restaff their newsrooms with talented journalists.

What other options should these panicky publishers consider? Here are a few:

  1. Keep news content online free, but establish voluntary newspaper membership programs offering real value. (I outlined this idea roughly in a recent Editor & Publisher Online column. The concept — which I do not claim to be original — generated a lot of positive response, and very little skepticism.) Paying members can even be granted access to truly special or premium content, while 99% of a news website content can be free to everyone. This strategy, executed well, is likely to generate more money that any of the paid-content schemes I’ve heard about.
  2. Join one of the voluntary paid-content networks currently being introduced. I first wrote about Kachingle a few months ago, which sets up a monthly, automatic voluntary contribution for a web user, then allows the user to select the websites or blogs that should get his or her money in a “frictionless” way, apportioned automatically by the number of times a month the user visits the favorite sites. This brings web publishers, including news sites, an additional stream of revenue without having any negative impact on advertising revenue. Since then, several competitors to Kachingle have appeared:
  • Contenture: Similar to Kachingle, with one difference being that Contenture promotes the idea of publishers offering Contenture network paying members access to special content that a publisher may choose to make unavailable to non-members. The company’s motto is “Building a Freemium Internet.”
  • Inamoon: Another “global content pass” program than multiple publishers can join, and Inamoon members’ monthly payments are divvied up by the time they spend each month on participating sites. Concept is similar to Contenture’s.
  • EmanciPay: This is an open-source project led by the brainiacs at the Berkman Center for Internet & Society at Harvard Law School, and has the intent of creating a system that makes it easy for online content users to decide how much to pay, rather than leave it under the control of the publisher in a mandatory paywall system. Though in the EmanciPay model, a publisher would be allowed to set certain limits, such as a minimum microtransaction cost or a minimum subscription fee that the user must pay at or above. This is quite different from Kachingle, where a website reader could choose to pay nothing and still access the site’s content.

If I’ve missed any other companies creating similar systems, please let me know.

With multiple players going after this “softer” way to get people to pay for web content, perhaps it will play out that a news website, say, would participate in several of the voluntary or freemium networks. Users visiting the site who were members of any of the networks and like the site enough to support it via the payment network would contribute money to the publisher. (Or perhaps one of the initiatives above will come to dominate.)

The point is, there are alternatives to joining the lemmings headed for the cliff who want to lock down their news content online. We’ll either see a lot of blood on the rocks, or the lemmings will come to their senses and start to take different paths.

(Addendum: In the interests of accuracy, and because a Twitter follower pointed out my lack of knowledge of actual lemming behavior — I must’ve fallen asleep during biology class during that lecture years ago — let me correct that last paragraph. Lemmings can swim and during mass migrations have been known to jump into the sea and then die from exhaustion. So strike that “blood on the rocks” metaphor. Jumping into the sea and then later dying from exhaustion is actually a better metaphor for the publisher behavior I’m trying to stop. Should a bunch of them take the leap into web news paywalls, their companies won’t die instantly, but will slowly decline and perhaps eventually expire. OK, now we have a more refined and apt metaphor. :) )

Author: Steve Outing Steve Outing is a Boulder, Colorado-based media futurist, digital-news innovator, consultant, journalist, and educator. ... Need assistance with media-company future strategy? Get in touch with Steve!

9 Responses to "Alternatives to paid-online-news cliff jumping"

  1. Crosbie Fitch
    Crosbie Fitch 8 years ago .Reply

    I’m working on a site called 1p2U that let’s a blogger’s readers pay them a penny for each item published in their RSS feed. If they don’t publish, the blogger doesn’t get paid and their readers aren’t out of pocket.

    This is what is known as an EXCHANGE – of intellectual work for money. It is not a donation. It is not a charge. Like all good bargains both parties enter into such an exchange agreement of their own volition.

    No monopoly/copyright/threat of prosecution necessary. The news can spread far and wide.

    That’s what I’m about – Making an ethical incentive: money for art, liberty for people.

  2. […] Steve Outing proposed some alternatives to paid content. […]

  3. Paul Bradshaw
    Paul Bradshaw 8 years ago .Reply

    Really useful list of micropayment services, Steve – thanks for that.

  4. Greg Golebiewski
    Greg Golebiewski 8 years ago .Reply

    Steve,

    You keep forgetting about Znak it! In my opinion (and I know it very well, because I have developed and run it ;-)), Znak it! is far better than Kachingle or any other content monetization solution proposed or already in use.

    Znak it! was developed back in 2007, when the today’s need (so apparent now) to monetize content in more ways than through advertising was obvious to only a few people. It was conceptualized by a group of MBAs from IESE on a tour to Stanford/Silicon Valley companies and Idealab, and then presented during the 2008 Web 2.0 Expo as the next-generation content monetization solution, ideal for media creators and publishers.

    Earlier this year, Znak it! was invited to participate in the Digital Innovators’ Summit in Berlin, where it was reviewed by peers and media executives, including those from Axel Springer, Hearst, Forbes and many more. Znak it! was also one of the Silver Sponsors and Exhibitors of the 2009 Web 2.0 Expo; it is very well known to Tim O’Really and Clay Shirky (even though the latter does not like it; he does not like any micropayment solution). It is also known to Steven Brill and Alan Mutter, whom I approached months ago and presented the idea. The fact that they have chosen to develop and market their own schemes (without ever acknowledging the source of their inspiration) does not change much. Znak it! is out there; it operates and… it is still the best digital content monetization solution.

    I invite you to check it out http://www.znak-it.com. The system is server-based and works in the “back room,” so, you cannot see it, but we just launched two portals (that are far from perfection); they are mainly to illustrate the idea and its advantages — but I hope you can judge for yourself Znak’s major benefits: its simplicity, universality, safety, and most of all, an unprecedented return of up to 97% of the content retail price. No other online monetization system can offer so much without any initial fees or heavy integration and maintenance costs.

    Cheers.

  5. Steve Outing
    Steve Outing 8 years ago .Reply

    George: Thanks for pointing out my oversight. Znak-it should be part of my list above.

    I can’t say I love your concept for news, though, other than the tiny amount of content that news providers can charge for, because it seems like another barrier for the consumer to jump; and with general news online users aren’t willing to jump (as free registration walls’ failure at many newspaper websites proved).

    And there’s still the (unproven) argument of which will work better: 1) traditional model of publisher setting the price and maintaining control, or 2) ceding some control to the user/reader and letting them tell the publisher what something’s worth to them.

  6. Greg Golebiewski
    Greg Golebiewski 8 years ago .Reply

    Thank you Steve.

    I have to add that with Znak it! the registration barrier you mention is easy to jump over, as it is raised only once. Then, if the users do not want to login and log out each time, the system can run all their content request and payment transactions for them, just like in Skype, for example. More, the Znaks can be redeemed at any participating site with any type and form of content (in a few weeks we will open an online music service available for Znaks!) and therefore the system reduces the need to register and helps maintain users privacy. In the long run, Znak it! results in less registration and easier access — two clicks with your mouse and all can be done for the users and the content provider, of course, by the platform itself.

    As for your second point, Znak it! can be customized in such a way that the content providers have a full price control and full transparency of the traffic/content usage; they can change the price to stimulate usage in real time, based on the stats and users’ ratings available from the control panel; they can also let the users to set up their own prices (auction-style), or they can let the content to be downloaded for free — whatever the overall strategy or needs are.

    I must also add that the users have the opportunity to earn Znaks buy clicking on interactive ads and surveys. In other words, some content can be still sponsored by advertisers and therefore “free” to the Web users the way it is “free” now, the Google or Yahoo style. The important difference is that up to 97% of the credits from the advertising agencies go directly to the content providers.

    This is why I dare to claim the system is better, more flexible, safer and nearly intuitive to use — a real win-win situation. It can be used by large content providers as well as individual bloggers. It can be used by the Web users in social networks to trade or exchange virtual and even real goods.

  7. […] a metaphor or simile about the state of the news business. The news business has been compared to lemmings, railroads and, of course, the horse and buggy.  (Read Nick Bergus’ post on the topic for […]

  8. […] In Francia sarebbe il primo esperimento del genere, mentre altrove ne sono stati già fatti alcuni: negli Stati Uniti ad esempio, con Kachingle e qualche altro. […]

  9. […] Steve Outing’s thoughts on micropayments […]

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