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What's the future for micro-payments?

Last October, at the FIPP Congress in Toronto, execs from the Dutch startup Blendle talked about their vision of how in the future readers would pay for individual articles from media companies. Since then, the concept of paying for stories has been a key discussion point in the publishing world.

At FIPP London today, Robert Cottrell co-founder of 1Pass, and Nikolay Malyarov, chief content officer, general counsel PressReader, shared their views on the topic.

Cottrell explained how his company had created a Wordpress plugin that enables publishers to charge for individual stories. He argued that it was surely better for publishers to charge for content via their own platform than to work with third parties.

The company has been beta testing the concept and Cottrell said that the key learning “is that what readers care about most of all is the writer. They are less bothered about the topic and elastic about the price. They follow the writer. If you like a writer then you will buy article.”

Malyarov then responded by saying “we are very aware of what Blendle and 1Pass are offering. We are not sure though that readers will pay for content in this way as it creates an additional barrier to content discovery.

“We believe there are a number of readers who prefer the printed content or the digital replica of the print editions and access to content. People are willing to pay for access or at least let sponsors like airlines and hotel groups pay on their behalf. This is in our opinion, better than paid for articles, or paid for access. 

Cottrell then talked a little about Blendle, stating that he had been impressed by the scale of the content that the company had collated in the Netherlands, but that he was watching very closely what happened to them in the US.

He then likened the sale of individual bits of content to the sales of coffee in the the UK. “The analogy is with a cup of coffee pre and post Starbucks. Pre-Starbucks you paid 20p and you were not sure what you were getting. Post-Starbucks you get better quality and know what are getting. Better coffee means that you are able to change more for the coffee.”

“This is the direction single articles have to go. Readers need to think ‘I really want to enjoy this article - e.g. 3,000 words - it really is worth investing £3 in it.”

“We had 15,000 casual readers who were beta testers, so we got lot of data,” he added. “We discovered that people will pay 25 cents for 700 words but as they got used to paying, they didn't differentiate between 25 and 99 cents for an article they were interested in.

Malyarov then argued that he thinks that in the US and Europe that “content is oversaturated and no one wants to pay for it. Publishers have undervalued the the content they produce for years. For example charging just 10-12 dollars for magazine subscriptions.”

Cottrell then went on to talk about social platforms and how he thought publishers posting directly on to them was a potential disaster.

“For Apple News and Facebook Instant Articles - I think this is a moment of abject surrender on the part of the publishers. The publisher’s job is to support the writers and create context for them. Publishers are going to abandon that responsibility by sending them off to be published on Facebook or Apple News. It is like being a book publisher and creating books in order to pulp them.

Malyarov then argued that readers have an emotional connection with magazines in both print and digital editions and ascribed a value to them. It isn't the same for online publishing.

“When publishers were erecting paywalls, consumers knew that content was before free. But the user experience was poor and that the content once used to be free. We question long term whether they can build that connection that they had with the printed editions.”

Finally Cottrell concluded by saying that “we are going after the writers who are grossly undervalued in that they have had to subside the revenue models of publishers. Writers could sell direct to readers.”

More like this

Micropayments: guess what! This might be the time they finally deliver new readers and revenues

Micropayments gain momentum in Europe

Blendle micropayments platform to launch in US

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