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.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: incentives, journalism, micropayments
Reader Comments
Subscribe: RSS
View by: Time | Thread
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? 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.
[ link to this | view in chronology ]
Re: Do you mean that people don't like good journalism?
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.
[ link to this | view in chronology ]
Agree and disagree
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.
[ link to this | view in chronology ]
Re: Do you mean that people don't like good journalism?
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."
[ link to this | view in chronology ]
Seen this before
[ link to this | view in chronology ]
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?
[ link to this | view in chronology ]
Re: Do you mean that people don't like good journalism?
No you won't, and neither will "millions" of others. Dozens maybe, and that's a high side estimate.
[ link to this | view in chronology ]
Micropayments
This would remove the focus on "popular" articles, theoretically reduce cost for the user, but still allow news sites to make money off readers.
[ link to this | view in chronology ]
Re: Micropayments
/s
[ link to this | view in chronology ]
Ummmmmm
[ link to this | view in chronology ]
Micropayments = Paying for Every Breath You Take
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.
[ link to this | view in chronology ]
Micopayment infrastructure is already in place - ad revenue sharing
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.
[ link to this | view in chronology ]
spread 'em
[ link to this | view in chronology ]
Re: spread 'em
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.
[ link to this | view in chronology ]
Paying without sampling?
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.
[ link to this | view in chronology ]
Micropayments, life is full of them
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.
[ link to this | view in chronology ]
[ link to this | view in chronology ]