Can Micropayments Help The Publishing Industry?

A few months back I wrote a piece about a new micropayment platform called Blendle, which allows readers to pay modest amounts for articles, and even allows them to request a refund if not satisfied. I have also frequently expressed pessimistic views about the current state of online publishing, and the flaws inherent in the current reader-publisher-advertiser business ecosystem.

Micropayments for publishing have been the subject of significant debate for a number of years, garnering a combination of staunch supporters and loud critics. In general, supporters think that micropayments will encourage readers to pay for content that they find valuable. Criticism has come in many flavors. Nearly 20 years ago, Clay Shirky was among the first to point the finger squarely at consumer-adoption problems: In a nutshell, having to decide whether or not something is worth paying for, is simply not worth the effort.



In fact, the history of the Internet is littered with failed attempts to make micropayments work. And this lack of success is arguably the most compelling evidence of the seemingly unavoidable failure of micropayment systems.

Nonetheless, the logic behind micropayments continues to appeal to the publishing world, and it is possible that some variant will eventually gain enough traction to become a success.

I have recently explored a few other companies besides Blendle offering different flavors of micropayments for publishers. Interesting examples are Tibit, Tipsy and Flattr.

Tibit is a London-based startup that lets users purchase a set of “tibs,” with each tib worth an amount that the user sets -- let’s say 25p (which would have been some 38 cents when Tibit was founded, but is now a more modest 32 cents, thanks to the recent Brexit vote). Sites that partner with Tibit can easily set up buttons within their pages that the user can click to tib. Tibit collects a flat fee of 2p per tib, regardless of the value selected by the user.

Tibit’s founder, Justin Maxwell, has been around long enough to see a fair number of micropayment companies come and go, and is well-versed in the debate surrounding this topic. He agrees that there are serious obstacles in getting readers to make a decision about the value of any piece of content, but argues that it should be easier to let users select a modest amount of money upfront that they are willing to set aside for donations, and then give each tib away with a simple click. Thus far Tibit has signed up a modest number of partners (which, incidentally, are not limited just to publishers), but Maxwell is bullish on growth and is exploring various ideas to extend his company’s reach.

Tipsy, the newest entrant in the space, is the creation of David Karger of MIT’s CSAIL department, developed as an open-source project with funding from the Knight Foundation. Tipsy also aims to address the problem of getting users to make individual payments, by allowing them to set aside an overall amount they are willing to donate over a user-specified period of time.

Tipsy is installed as a Chrome browser extension that tracks how much time the user spends on various sites, and then automatically allocates proportions of the user’s donation accordingly. The user has the option to monitor and adjust the allocations. A unique aspect of Tipsy is that it is completely free for both users and publishers. The idea is to encourage people to donate money without feeling that they are paying an intermediary.

The same time-based allocation model was recently adopted by Flattr, the oldest of these companies. In its standard model, Flattr lets users select a monthly budget. During their browsing, users can click the Flattr button on any participating Web site. At the end of the month, the user’s budget is allocated proportionally based on the user’s clicks.

More recently, Flattr teamed up with AdBlock to create Flattr Plus, which will give its users the option to pay publishers using time-based allocation as done by Tipsy. This model seems compelling because it effectively creates a broad distribution platform for Flattr, without requiring individual Web sites to adopt its buttons.

The jury is still out on whether any of these “new” micropayment systems will be successful. Even if they are, it's not entirely clear whether that success will make a tangible difference for any sizable publisher -- or whether it will simply be a way of supporting smaller publishers and individual content creators, further accelerating the evolution of the current online publishing model.

Next story loading loading..