Just a few weeks ago, we wrote about how Flattr had integrated with services like Twitter and Instagram to make it incredibly easy to support content creators (including us!) by just favoriting a tweet. Not surprisingly, in the first month after that went into effect, we saw a boost in revenue from Flattr. Unfortunately, Flattr has now announced that Twitter has forced the company to stop this integration.
Flattr had been using the Twitter API to figure out what people had favorited, and had been gathering data about the specific tweets. However, Twitter told the company that it was violating section IV. 2 C from its API terms. That term says that:
Your advertisements cannot resemble or reasonably be confused by users as a Tweet. For example, ads cannot have Tweet actions like follow, retweet, favorite, and reply. And you cannot sell or receive compensation for Tweet actions or the placement of Tweet actions on your Service.
It's that last part where the trouble came in. Of course, it seems clear that that particular line in the terms of service was designed for situations where people are "selling" tweets or something similar. Not for cases where a service like Flattr is helping people make money from supporters. In response, Flattr even said that it would waive its standard 10% fee on any Flattrs that come via tweets. Twitter told them it wasn't good enough. Now, you can argue that "rules are rules," but rules need to make some sense. And it's unclear what kind of sense this makes. There's nothing about the way in which Flattr is using Twttier that is negative for Twitter. It seems like a really nice and useful addition. Obviously, we're somewhat biased, because it also helped us make a few bucks (not much, but some), but I can't see how it makes sense for Twitter to block this functionality.
We've written about Flattr a bunch of times over the past few years, as we find it to be a really interesting experiment in both micropayments and in supporting content creators. If you're unfamiliar with the concept (which was created, in part, by Peter Sunde from The Pirate Bay), each user of Flattr puts some amount of money (total is up to the user) into its account each month, and they can then click on "Flattr" links around the internet. At the end of each month, Flattr tallies up the total amount of content you've "flattr'd" and divides your monthly allotment by that amount. Thus, if you want to give creators $10/month, and then flattr 10 pieces of content, each creator will get $1 (actually, $0.90 after Flattr's 10% cut). If you flattr 20 pieces of content, each one gets $0.50 (er... $0.45). The thing we liked about this is that it gets you past a big part of the mental transaction costs of micropayments: that is, if you have to think about "is this piece of content worth $0.50 or $0.10?" you're already going to lose a bunch of potential customers who don't even want to bother with thinking about it. But, with Flattr, they don't have to think about it for each piece of content. Once they're convinced to take part and fund their account each month, it makes no difference to them how many piece of content they flattr.
As some of you know, we've had a Flattr widget on every one of our posts for the past couple of years. It brings in a small amount of money each month -- maybe between $50 and $100 or so. Of course, part of the issue is that there are some usage hurdles. The service has a small but dedicated user base, but it seemed to stagnate over the years. On top of that, there was a bit of a chicken and egg problem, in that the process of finding content that is Flattr-enabled is still somewhat haphazard -- and then Flattr users need to remember to flattr that content. However, that's now getting much easier as Flattr has announced integration with a number of different services, including (most importantly) Twitter, Instagram and Soundcloud (also: Vimeo, Flickr, github, 500px and app.net). So, now, if you connect your accounts, you can give money simply by favoriting tweets.
And, yes, that means if you want to toss a bit of change our way, you can now do so with a Flattr account by favoriting the tweets on our official Twitter account or my personal Twitter feed as well -- both of which are connected to the Techdirt Flattr account.
Of course, the other hope in all of this is that it will help lead to more people using Flattr in the first place. That's because Flattr users who favorite a tweet of someone who is not using Flattr are still designating those flattrs for that account. That doesn't mean that Flattr is holding money for those accounts (since that could add up!), but simply accumulating flattrs. Thus, if I "favorite" a Twitter account that doesn't use Flattr once a month, and that person finally signs up for Flattr a year later, it would count all 12 of my favorites as if they came that month (thus giving users on other services incentives to sign up sooner rather than later). Flattr is working on automatically notifying people who can "claim" money, but initially they're hoping the community will do that job for them, with an "unclaimed" page that highlights those with the most Flattrs on the various connected networks. Someone call Randall Munroe and let him know he has a whole bunch of unclaimed Flatttrs for the xkcd Twitter account. Ditto Wikipedia and the Torproject. Similarly, someone might want to alert Linus that his Github account is leading the way in unclaimed Github flattrs as well.
There are, also, some obvious social networks that are missing -- though I've been told that Facebook, YouTube and Tumblr are obviously key among them. It sounds like Google+ may be a bit further down the list. All in all, we still love the idea of Flattr, and think that this is a good step as it evolves its business. It still requires getting people to sign up to pay -- and that, of course, will always be a big hurdle -- but making it easier to do something once you have joined seems like a very good thing.
A few months ago we wrote about a really bad idea that was being floated in Germany: making companies like Google pay for the use of news snippets in services such as Google News. Unfortunately, that idea has now been turned into a concrete proposal for a new law; remarkably, it is even worse than the original plans.
As Udo Vetter points out in a post entitled "Digitally Castrated" (German original), the emphasis of the proposed modification to German copyright law (available as pdf) has shifted: now the primary targets of the law are not only companies like Google, but also ordinary people who blog or post short excerpts of news stories on Facebook or even Twitter, who may be required to obtain a special new license to do so.
Vetter suggests this is because the German publishers have realised that Google would probably rather close down its Google News site in Germany than pay for each snippet, and so they have decided to go after an Internet group who make up in numbers what they lack in revenue: German users of blogs, Facebook and Twitter.
They are likely to be affected because two aspects of the proposed law are vague. It would apparently apply to anyone who makes money from their online writing, and that seems to include things like a few Google Ads or a micropayment system like Flattr. The other uncertainty is what exactly is allowed in the way of unlicensed excerpts from articles. The proposal explicitly mentions that quotations that are currently legal will remain legal. But as Vetter points out, a recent German court decision established that even very short excerpts could be infringing, which effectively guts that apparent safeguard.
This creates a gray area of what will be lawful for ordinary Internet users. And that, in its turn, will create an opportunity for publishers to send out huge numbers of threatening letters to bloggers and others that have quoted from newspapers and magazines. Since few of the latter will have the resources to defend themselves in court, most will simply give in and pay for one of the new licenses the legislation would create.
This will doubtless have a chilling effect on German blogging, and by extension on the use of quotations from newspapers in German Facebook posts and on Twitter too, since users will hardly be keen to fight major battles against well-funded publishers to establish the exact contours of the new law.
The end-result could be a disaster for German blogging, microblogging and social networks. Freedom of speech would inevitably suffer, as people hesitate to challenge articles published in newspapers and magazines for fear of running afoul of the new rules. Old media will be back in the driver's seat -- exactly as the publishers doubtless planned when they lobbied for this law.
One hope is that the extreme nature of this proposal will shock enough people into protesting against it -- the massive street demonstrations against ACTA showed what the German Internet community is capable of. The other is that, if the worst comes to the worst, and it is passed in its current form, the new copyright law would surely alienate so many users of popular platforms like blogs and social networks that the German Pirate party would find itself propelled to even greater political power.
One purpose for which micropayment solution Flattr (which we use here on Techdirt) has certainly caught on is providing a way for people to support podcasts. Apparently, simple integration allowing people to designate some money for podcasters has just "felt right" for lots of users who do exactly that. And some podcasting/podcatching apps have tried to accommodate this. Instacast, a popular app for downloading and listening to podcasts on the iOS platform, integrated Flattr back in February, but in early May the arbitrary gatekeepers at Apple rejected the app because the Flattr integration went against Apple's demands that all in-app payments go through its own system. Vemedio (the makers of Instacast) along with the folks at Flattr appealed to Apple that this was ridiculous... but Apple issued a final decision rejecting the app. In response, Vemedio is very reluctantly removing Flattr from its app, meaning podcasters just lost a good way of making money, all because Apple can't control it. More evidence of Apple becoming a rather evil gatekeeper, rather than an enabler of new and interesting ideas.
We've been using Flattr on the site for a little over a year now, and I'm planning to do a writeup about our experiences with the service shortly. If you weren't aware of it, Flattr is a very neat, extremely simple, way of monetarily supporting content that you like. As I noted in my initial writeup of the service, Flattr is very clever in how it gets rid of the traditional "transaction costs" problem of most micropayments system, in that each month you just have a set amount that you've already agreed to spend, and each Flattr merely divides up that pie by one more slice.
It's been interesting to see the service evolve -- especially watching as it went from closed beta to open so that anyone can use it. If you haven't yet signed up, you should at least check it out. But one of the more interesting things in how it has evolved are the unexpected ways in which the service can be used. Take, for example, a fantastic looking conference taking place in Sweden later this month, put on by Media Evolution, called The Conference (which I had wanted to attend, but was unable to make). The conference organizers have set it up so that pretty much everything at the conference is "Flattrable." Like a speaker? Flattr him/her. Like an entire session? You can Flattr it through the app or directly via QR codes around the event. See someone ask a smart question? Ask to see their badge, and you can Flattr them directly.
As far as I know, this is the first time this has been done like this and, as with any experiment, you never know for sure how it will work out, but I think it's a pretty cool experiment and I hope that it goes well. I look forward to finding out from the organizers some of what they learn from the experiment.
Much of the press coverage around Flattr, the "social payments" startup, focuses on the fact that it was founded by Peter Sunde, who is perhaps better known for being the (former) spokesperson for The Pirate Bay. I have no doubt that this is a big reason why the company got a lot of its initial attention, but I think what's a lot more interesting is that this is one of the first "micropayment" platforms that actually tries to get around the historical problems of micropayments for content. There have been lots of micropayment companies out there, and almost all of them failed -- and it wasn't difficult to see why. First, they underestimated the "mental transaction costs" that micropayments entail. Just making the decision if something is worth paying for is a huge "cost" for users. Second, they heavily underestimated the "penny gap," which is the effort that it takes to get someone to go from "free" to paying even a penny. Next, it's an attempt to fight the basic economics of what supply and demand is pushing for the content be priced at. And, finally, required micropayments make it very hard to promote that content via word of mouth or sharing.
Many have tried to tackle the problem of micropayments by assuming that the only real problem is the lack of a clean and easy design. Undoubtedly, a clean and easy design makes it easier to use micropayments, but doesn't tackle all of the other issues. And it's that part that makes Flattr interesting to me, in that it actually tries to get past some of those issues. MediaEvolution recently did a short video interview with Peter about Flattr, where he explains the basic concept:
As he notes, Flattr is actually somewhere between a payment platform and a donation system. But what's most interesting is the way it gets past the mental transaction costs/penny gap issue. It does that by getting people to only make the decision once. You agree to "fund" your Flattr account each month with a set amount, and then when you click on "Flattr" buttons on various content, you're not increasing how much you pay -- you're just subdividing your amount by one more part.
In other words, if you agree to put in $10/month, you'll always spend $10/month no matter how many things you "Flattr." It's just that the amount each thing you Flattr depends on how many you click. So if you click on 10 things, each will get a dollar. If you click on one hundred, each will get ten cents. So, there's no more mental transaction costs or penny gap, once someone has been convinced to sign up for Flattr (which is, yes, still an issue to consider).
The other neat thing that Flattr has done is to effectively set its own site up as something like a "Digg with money." Just to see what happens as an experiment, we've set up Flattr here on Techdirt. You should see the Flattr button to the left of each blog post for now. It looks kind of like a Digg This button, that shows a counter of how many people have "Flattr'd" that story. I don't expect a huge number of folks to Flattr any particular story -- especially since the service is still in private beta, but there is some interesting potential here. One of the complaints people had about Digg was how it got gamed. If Flattr could get widespread usage, it could potentially become a more useful sort of "Digg" because people actually have money riding on who they vote for. I think this aspect of the site is still a bit underdeveloped, but it has some potential.
Since Flattr is still in private beta, we do have a bunch of invites to hand out to folks, if you want them. If you're interested in getting an invite, please use our contact form with the subject "Flattr Invite." We don't have unlimited invites, of course, so first dibs will go to folks who are already Techdirt Insiders (so make sure to mention that in your email request). After that, it'll be first come, first served.
There are some others in this space as well. In the US, there's a company that's been around a bit longer called Kachingle, which Mark Glaser from PBS just wrote about, including an interview with Kachingle's CEO. Conceptually, the two are very similar. Kachingle seems to focus more narrowly on journalism/blog sites, whereas Flattr is for all sorts of content. Kachingle also has a set price: everyone has to pay $5/month, unlike Flattr which lets you choose how much you want to spend per month (in euros, for now). Also, Kachingle doesn't seem to be doing anything Digg-like (yet).
It's also interesting to note that both are big in Europe. With Flattr, this isn't as surprising, seeing as the company is in Sweden, but apparently Kachingle is big in Germany, despite being a US company. As always, I'm still not convinced that "donation" models are really that sustainable, and I've always been skeptical of "micropayments" in general. However, I find both of these attempts to be at least worth watching, as they seem to try to get around the usual hurdles associated with these models.
