I am in awe of the fact that there has been so much discussion on Time Magazine’s cover story on having micropayments as a solution to saving newspapers. The very notion of the idea shows, not only the some journalist’s lack of creativity when it comes to forging new ventures for revenue, but also their complete disconnect with readers.
Here are my top 10 reasons why Micropayments WILL NOT work:
1. Nothing beats free. Just as surely as some online publications will follow this advice and charge mere pennies for viewing an article, others won’t. I actually think a majority won’t. Why would I read articles on a Web site where I know I have to pay, when I can go to another site where I don’t have to pay at all.
2. This completely compromises the link economy. Let’s say, hypothetically, The Huffington Post does not prescribe to micropayments but Time Magazine does. When HuffPo wants to link to Time, is that really right? To send that viewers from a place where they don’t have to a pay at all to a place that they would have to? The free-flowing stream of information that the internet provides would be slightly cut off.
3. It’s very 2000. In the Time article, it says that this new business model of free “appeared to when Web advertising was booming and every half-sentient publisher could pretend to be among the clan who ‘got it’ by chanting the mantra that the ad-supported Web was ‘the future.’” The web isn’t the future, it’s now. Offering content up for free didn’t happen just because Web advertising was booming, it occurred when people wanted to be in control of their viewing. They wanted the sort of transparency that the web provides.
4. It’s uncreative. The web truly is limitless and the journalism industry is filled with really intelligent people. They’re all in a rut. Are you telling me no one can think of any way to generate positive cash flow besides charging for content and advertising? Read Jeff Jarvis’s book “What Would Google Do?” Read “The Social Network Business Plan.” We are not an industry devoid of ideas. We just lack the courage to try them.
5. It’s failed in the past. Cybercoin, Millicent, Digicash, Internet Dollar, Pay2See are just some companies that have failed to encourage readers to move into the payment realm.
6. Mircopayments puts open-source journalism years behind. It seems to be relatively common knowledge that open-sourcing seems to be the next big thing in journalism. Micropayments leaves out the chance any reader may have at being able to trust a publication, which is really the first step in open-sourcing.
7. It’s never been done before. As stated in an Op-Ed in The New York Times,
Newspaper readers have never paid for the content (words and photos). What they have paid for is the paper that content is printed on. A week of The Washington Post weighs about eight pounds and costs $1.81 for new subscribers, home-delivered. With newsprint (that’s the paper, not the ink) costing around $750 a metric ton, or 34 cents a pound, Post subscribers are getting almost a dollar’s worth of paper free every week — not to mention the ink, the delivery, etc.
8. We’re not talking about ringtones here. Clay Shirky of NYU told Slate Magazine, “The only places nickel and dimes work—ring tones, music and in-game currency—is when there’s an end-to-end monopoly.” There’s been talk about building an iTunes equivalent for newspapers via micropayments but as Jack Shafer said in his article on Slate, “The music labels rue the day they gave Apple the extraordinary leverage they did over their content, so newspapers should beware.”
9. It leaves out the reader. In a time where the most successful Web sites focus on the needs and wants of users (Read: Facebook and YouTube), it seems foolish to take attention off of the needs of the readers and focus on how journalists can do their jobs more effectively. Afterall, isn’t journalism supposed to be a “public calling?” Why not serve the people, listen to them?
10. Give them a reason to pay! In Walter Isaacson’s article in Time, he does not offer any reasons as to why a reader will go to site where they will have to pay. He just assumes they will. As much as I love The New York Times, my opinion of them would change if they started charging. I’d simply get my news elsewhere. The web has made us selfish people. When a Web site takes longer than 5 seconds to load, we question we get impatient. When we have to pay for content, we laugh and go elsewhere.
UPDATE: Walter Isaacson on Jon Stewart on February 10, 2009
Totally agree with your point that if not ALL the news outlets (or at least the most reputable ones) start charging, paying for content – micropayments or otherwise – will not work. Also really good point about linking, I never thought of that problem, and it would be a MAJOR issue for one of the most basic ways content traffics around on the web.
Something tells me though free content won’t last for long, though. Even though we’ve only been paying for the paper itself in the past, what would that paper be without the words on it? Journalists are already not respected enough by some – a lot of the stories deserve to be paid for. Hopefully we’ll come up with something creative for our monetary problems though that everyone can respect and be happy with.
Awesome post
Emily, thank you for writing this. It’s been on my mind for days and I agree with you on every count. As much as I want to believe in it, I can’t. Great post (as always).
Fantastic, you hit nearly all my points! One more I would add: the metaphor to the iTunes model is inherently flawed. Customers will listen to music again and again, how often are they going to go back and read a news article?
This was a good read.
I find it interesting that Time thinks micropayments would work. But Time’s business models haven’t exactly been all that successful recently, so in a small way, it makes sense that they would be the one to come up with this.
Payments work well with premium services. I paid for the privledge of the Wall Street Journal for a year. Even when I realized I wasn’t reading it because I didn’t have the time, I was tempted to continue my subscription. Time is not a premium service, not even close.
I’ve watched the internet get to this point from the 90s. So many businesses had to adjust their models to find better revenue streams. Larger businesses seem to be less flexible, so instead of evolving with the time, they scream and rant, throwing tantrums when things don’t go their way. For an even better example, one needs to look at entertainment industries.
Social media and citizen journalism, as repugnant as those terms are to some people, has really started to shift the way journalism and news reading works. The big boys are going to have to learn how to play in the new media if they want to survive, and charging is just going to be another failed experiment.
I don’t necessarily disagree with your overall premise, but I do disagree with many of the points you make.
1. Nothing beats free. But, as the saying goes, “Nothing in life is free.” And I certainly don’t think giving things away for free is viable in the long term, no matter the industry.
2. This compromises the link economy. So? Who says the link economy is valid and justified? If we’re supposed to be creative and open minded, then I think all things have to be both on and off the table at the same time.
3. Just because something hasn’t worked in the past, doesn’t mean it won’t work now. Times change. Attitudes change. Circumstances change. It’s pretty shallow, closed minded thinking to suggest that just because something didn’t work once, it’s a failure. It could be, but it’s not necessarily.
4. I think many of the ideas being offered *are* creative. They may not work (but they might), but they are creative. People are trying different things and they shouldn’t be roundly criticized and chastised for merely offering up an idea. Perhaps they need to be tweaked, combined or modified. It’s easy to say, oh, that won’t work, but I don’t see those criticizing offering up other more viable ideas.
5. Common knowledge that open-sourcing is next big thing in journalism. Really? I must have missed that memo. I’m not saying it isn’t or won’t be, but I don’t think it’s a done deal. While many people want to participate in the process, not everyone does. Some people just want their news delivered to them so they can participate in the water cooler discussion and make informed decisions about who to vote for.
6. Newspaper readers have never paid for content. Hogwash. That’s exactly what they pay for. You’re telling me that people would have paid to have pounds of empty newsprint delivered to their house all these years? Of course they wouldn’t. They were and are paying for the content.
7. It leaves out the reader. What about the folks over at SpotUs? They are involving the reader AND getting people to pay for it. People will pay for content they want. If they don’t like the content, they won’t pay for it.
And you note that if forced to pay for your content, you’ll just go get it elsewhere. But, what if there is no elsewhere? What if there’s only one source covering that city zoning commission meeting that you want information on? You’ll either pay for the information or you won’t get it.
Again, I’m don’t think that this “micro-payment” solution is necessarily the answer, either. Thanks for posting your thoughts, though…glad there’s a healthy debate going on. I think it will make journalism stronger.
It seems that readers will only pay for what is valuable to them. If I can buy access to content that I really like or really need and I can’t get it anywhere else for free then I will pay for it. It won’t matter if it’s printed or on the web. Unfortunately, there’s not a lot of journalistic content on the web that falls into this category for enough people. And if only a few are willing to pay, setting up a micro-payment system will cost more than it earns.
I’m sorry but I do not agree with any of the points you had made.
http://www.amirkurtovic.com/?p=44
@Amir Kurtovic
http://www.amirkurtovic.com/?p=44
Thanks for your post. While I can understand your frustration with the current system of “free,” micro-payments are a step backwards not forward.
It’s clear you have a very serious love for journalism, which I respect. However, I feel you are lacking in a basic knowledge of new media and new media business models. I can tell this from your first rebuttal when you say, “Nothing in life is free.” On the internet, this is completely untrue. The most successful business models on the internet make money from not only advertising (which you seem to think is the ONLY way to make money on the internet), but through platforms, affiliate programs, etc. Advertising is merely ONE way to make money off the internet and yes, it is an unsuccessful way. I suggest reading works by Jeff Jarvis or David Silver for information on alternative ways. They can explain it much more eloquently than I ever could.
While I agree that something has to be done to improve the revenue flow on the internet for publications, micro-payments is not the way to do it. This new medium requires new ways to generate revenue. Paying through subscriptions is not the way to go. The publications that choose to use micro-payments will see a sharp decline in visitors per month as visitors go to places where they will not have to pay.
In response to the argument that you did not understand, what I am saying is that journalism is a public calling. A certain amount of transparency is needed. While journalism organizations need help, at the end of the day it’s about the free flow of information – ensuring that people get, receive information – this will be limited under micro-payments. In short, it’s all about the reader and micro-payments takes the focus off of them.
People who talk about micro-payments, say that a News version of iTunes is needed to implement it. That is where the ringtones comparison comes in. However, people typically read an article once or twice at most and then never read it again, compared to ringtones and songs which you listen to over and over again.
I appreciate your input.
Here’s my take on your entry with a bit more zest:
http://www.fixjournalism.com/?p=322
You may also like a few of my other posts on this topic. Thanks for continuing the conversation. Please comment on my post or leave trackbacks.
Emily,
I’m sorry if I come across a little snarky in my post. I do understand new media. I understand that guys like Jeff Jarvis and David Silver publish books about new media and go on radio and TV to promote them. Now, if these guys are so knowledgeable about this topic, why don’t they find some cool new way to give away their books for free? The answer is simple. Because there’s no money in it.
We cannot look to companies like Google, MySpace, and Facebook to figure out a new way to make money in journalism. They are completely different business models.
The reason I disagree with you is because, at least in my opinion, Journalism should not be about finding new ways to integrate advertising and affiliate programs on a website. If we go down that route we will severely damage the quality and integrity of the news. Is the New York Times going to start reviewing consumer products to get affiliate and AdWords money? I really hope not. In a newsroom the advertising side should be totally separated from the news side. Editors and reporters should not even be allowed to talk to advertising people. What you, and others, are advocating is to break down this barrier and structure newspaper websites in a way to make them more profitable. I think eventually this would lead to a bunch of useless soft news features about new iPhone accessories, reviews for $500 digital cameras and LCD TVs. It would basically use the news in order to sell products.
I have more thoughts on this subject and I will eventually sit down to write something a little better.
Emily, it should be noted that your response to Amir was pretty condascending and not indicative of someone interested in carrying on a dialogue especially since you don’t particularly appear to have any answers yourself.
I must say, I love Amir’s response:
“I understand that guys like Jeff Jarvis and David Silver publish books about new media and go on radio and TV to promote them. Now, if these guys are so knowledgeable about this topic, why don’t they find some cool new way to give away their books for free? The answer is simple. Because there’s no money in it.”
That aside, I have some questions for you. Perhaps you can enlighten me.
When you graduate next year, how do you expect to pay for your loans or any other debts you’ve accumulated? If you have been so lucky as to not accumulate such debts, how do you expect to pay your rent? How do you plan to feed and clothe yourself?
Will that be with money you make at a news organization?
Do you realize that blogging “is so 1996?” How can you participate in something so outdated?
How can something have “failed in the past” that’s “never been done before?”
How is the Internet free when you are currently paying an ISP to access the Internet? How is information free when you pay for minutes, an untangible concept, in order to use your cell phone? Do you realize that means that talking to your friends and family is NOT free? You pay for that privat information. Should you not pay for public information?
This is an absolute contradiction: “it seems foolish to take attention off of the needs of the readers and focus on how journalists can do their jobs more effectively. Afterall, isn’t journalism supposed to be a “public calling?” Why not serve the people, listen to them?”
Let’s turn your comment into a syllogism to make it easier to understand.
If journalists do public good/public service
And micropayments make journalists more effective at their jobs
Therefore, micropayments help journalists do better public service
If public service improves journalists’ relationship with readers
And journalists are doing more effective public service
Therefore micropayments will improve journalism’s relationship with readers
Continuing. What would Google do? I believe they ARE doing nothing. Google’s business model is as you say “uncreative.” It is sponsored by advertising. Nothing new here.
To Amir. I must disagree with you about a key point in your last comment:
“In a newsroom the advertising side should be totally separated from the news side. Editors and reporters should not even be allowed to talk to advertising people. What you, and others, are advocating is to break down this barrier and structure newspaper websites in a way to make them more profitable.”
This is the problem we are facing today. Separating journalists from sales people is what got us into this mess. Journalists are incapable of understand their audience because they ignore the metrics used for measuring affect and success of content.
Public relations, advertising and marketing people have an advantage over us: statistics. Separating the news from the sales is why we shotgun information at the public and wonder why we get no response.
I agree it’s a dangerous, slippery slope that should be watched carefully but I think a relationship is necessary.
Mike,
I did not mean to be condescending in my response to Amir and I apologize to him, if I was. It was definitely not my intention. However, I will agree with you on one thing: I do not have any answers on the next best way to make money online. All I know is micropayments are a step backward and not forward.
To respond to Amir, who said that Jarvis and Silver published the books and promoted them on tv and radio, because there is no money in alternative, new-wave forms online, I agree. In addition, the best way to have both of their ideas shared with the world is through books (this is the same reason why I blog, although lately it seems to be a dying art).
I’m not unreasonable when it comes to the ideas of Jarvis and Silver and do not think that they are without their faults. Their ideas can, at times, be naive. However, I agree with them when they speak of finding alternative ways of generating revenue.
New technologies are being invented everyday and with them comes new mediums to share information. We are living in times when new inventions for making money are also needed. Micropayments is a sign that we are moving backwards.
You are assuming that advertising is a complete failure of generating revenue. Publications can make a substantial amount of money from advertising online. Is it enough to run a publication? Of course not, but it’s definitely not hurting. An addition avenue for revenue online is definitely needed but micropayments will not work. In addition, despite discussions like this one going on throughout the internet, I don’t even think you’ll see many credible newspapers try it.
Generating money online is a comparatively “new” problem and it requires an almost immediate solution, especially in this economy. However, micropayments is not the most efficient way to do this. One of the reason why journalism had had a difficult time adapting to the world of the internet so effectively is because they have been slow to catch onto new ideas. This is just another example of that.
You ask how I expect to pay loans and rent without micropayments at a publication that I will work at. The same can be said for a reader. Imagine you are not a journalist, just a regular person in Gen-Y, with loans and other worries. You can get your news on tv (paying just the cable bill), online from a Web site (and just pay your monthly internet fee) or online and pay your internet bill AND micropayments. You’re going to go where you can get the best news for the lowest price. The lowest price being free.
The best argument I can read was on Buzz Machine: “When content is hidden, it cannot be found via search (not to mention bloggers’ and aggregators’ links). In a link and search economy, content gains value only through these recommendations; an article without links has no readers and thus no value. The real cost of charging for content—and it’s a cost born by the content owner—is a loss of Googlejuice.”
I truly believe at the end of the day few publications will pick up this model. We should be focusing our attentions on creating new business models, not trying to revive failed, past ones.
@ Mike
I understand your point about the advertising comment. But I view that more as an issue of presentation rather than content. I would have a problem if an editor told me to change a story around so that Google AdSense shows higher-value ads, for example. Or to make a story longer by inserting useless filler info so it stretches over more web pages and gets more page impressions. I don’t think it’s worth trying to mess around with the news just to get a couple of extra pennies out of a reader. But I do understand your point and it is something that editors and writers need to have serious conversations about.
@ Emily
I know what you mean with micropayments because I don’t agree with the concept myself either. I do, however, think that newspapers need to start charging something. I’ve written a little longer post about where I think newspaper will in ten years from now (http://www.amirkurtovic.com/?p=65), check it out if you’re interested in what I think might be a future business model that could work.
@Amir
I like your post, now you’re jumping in front of the bandwagon.
@Emily
“New technologies are being invented everyday and with them comes new mediums to share information. We are living in times when new inventions for making money are also needed.”
This is a good point. It’s important to not only think of what will help newspapers now but what will help newspapers when the Web is an after thought.
People treat the Web like the end of a big tunnel and we’ve finally arrived. The Web is problematic and will continue to evolve beyond its current state. Journalists must be ready.
I still don’t see how micropayments are a step backward. You and Jarvis are thinking of micropayments from years ago that didn’t work. You are not expanding your visions. Using Google as an example is so 2004.
I also think “it failed in the past” is a horrible reason. If people used that as a reason not to try or invent, we would not have light bulbs (the ones you use were Edison’s 150th try -approx.). Flying took almost 500 years from Da Vinci’s first wing. All of these things started with a basic concept and took thousands of small tweaks.
If that’s your answer to a story pitch, I worry.
Take a new angle on it and invent something.
As you say, the Web is new, so I think we’re allowed to fail a few times, it’s been less than 10 years and even less than that before journalists realized it exists.
So, really think hard and contemplate what comes next and see if you can tell me micropayments are “so 2000.”
Also, Shirky’s reasoning (No,
is fundamentally flawed. He’s comparing things too closely to iTunes. You don’t need to KEEP a story in order for it to be worth something. Do you KEEP every single newspaper you’ve ever read? Every thing else you’ve consumed that cost money? No. So why would you need to keep content in order for it to be worth money? It’d be nice to be able to keep it though as a reference but it’s not necessary.
that should say “No. 8″ not a smiley face.
As cute as it is to compare micropayments to inventions like the light bulb or DiVinci’s first wing, they are not one in the same.
Micropayments are a business model. We’re not talking about inventions, we’re talking about money and this system has proven it just doesn’t bring it in for newspapers. If you want to sit around and adjust this business model 150 times until it works, be my guest.
With the economy as it, you’ll be wasting your publication a lot of money sitting around waiting for this to bring in some positive cash flow.
At the end of the day, I feel this conversation is pointless. At this point, we’re not going to be able to convince the other.
You’re a particularly negative young person aren’t you.
For one, business models ARE inventions. They are just not as tangible as light bulbs. Your inability to understand the metaphor tells me you’ve got a lot to learn.
Did you know that capitalism is a macro business model? Did you know capitalism is not done yet? It is still failing and being retooled. Every business model is constantly failing, being retooled and applied. You should not just look for one fix-all business model. That’s why newspapers are in bad shape.
Have you ever heard of “fail often, succeed faster?”
You’re thinking too small. A single publication should not do it alone. An entire company(ies) should change their business model at once in a collaborative movement. All of Gannett and all of Tribune going to a micropayment system would be a huge difference and probably more successful.
Newsday (a reputable publication) just went to a micropayment system. Why don’t you start paying attention to the industry before you rattle off.
I think you’re right though, you talking about this is pointless. You don’t know what you’re talking about. Good luck with the rest of your blog.
I feel that comment was very uncalled for. Micro payments is a type of business model, and the point of a business model is for a company to be able to sustain itself through a course of action. Financial action also needs to be accounted for and as much as you might like to believe that the micro payments method works…the data and history suggests that it does not. Yeah you could band together a lot of publications and try to change to this all at once, but that wouldn’t change the fact that the method is flawed and all of them would eventually collapse. Just because a select few publications have made it does not mean they all will. I think Emily’s comment was not negative at all, just informative. Next time hopefully you will consider that Mike.