What Would Micropayments Mean for Journalists?
Posted by Greg on May 12, 2009
Like a bad case of herpes, the idea of micropayments refuse to go away, with News Corp now making noises about rolling them out this fall. To be fair, Murdoch’s plan sounds more realistic than the wishful thinking engaged in by the likes of Isaacson and Brill, since the Journal is proposing to use micropayments as an add-on to its existing subscription business and only apply them to niche subjects (though Jeff Jarvis remains skeptical).
What amazes me, however, is that while there has been much discussion about how micropayments would be bad for consumers, no one seems to have considered the fact that they would be an absolute disaster for journalists.
The argument for micropayments is usually couched in terms of how we must do something to save newspapers and the vital civic role they perform. If they go away, we are told, who will fund the Baghdad bureau? Who will be left to cover the statehouse and the city zoning-board commissions? And so apparently if we adopt micropayments, everything will go back to the way it was. Newspapers will become profitable again, reporters can once again be insulated from all that nasty business stuff that they never cared about in the first place, and everyone will get a pony.
As it happens, I agree that newspapers provide a civic good by covering important but less sexy topics. Which is why I’m dumbfounded that these micropayment enthusiasts haven’t figured out that charging for individual articles not only won’t save the Baghdad bureau, it will hasten its demise.
What exactly do these people think that newspaper execs will do with data showing exactly how profitable every single article is? Just sit on that information? Or will they use it to make business decisions about which departments, types of articles and individual journalists are delivering the most ROI? “Sorry, Woodward, we know you won the Pulitzer last year, but your articles only generated $97.85 in revenue, so we’re going to have to let you go.” Of course, it wouldn’t just influence the executives. Journalists themselves would start shading their stories to what sells, and the most successful would be the ones who were the best salespeople (or who knew the most tricks). Get ready for a lot less zoning-board recaps and a lot more “Top 10 Sexual Positions.”
OK, so the micropayment enthusiasts are either naive or hypocritical. But leaving them aside, isn’t this where we’re going anyway? After all, Gawker Media already bases payments to bloggers on the pageviews their posts generate, which is an indirect form of revenue. [NOTE: As pointed out in the comments, Gawker "temporarily suspended" its pageview bonuses last fall.] And I believe very strongly that a) companies should measure far more than they currently do and b) journalists can achieve more job security by becoming revenue centers rather than cost centers. The problem is that judging the value of articles based on how much they sell is a perfect example of measuring the wrong thing.
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.
The corruption of micropayments « BuzzMachine said
[...] Horowitz raises an issue with micropayments that I haven’t seen discussed, one I’d think the heavy-duty [...]
T said
I think one ought to expand the understanding of micropayments beyond merely charging for individual articles to see the potential value for journalism. A lot of the discussion on digital dollars and analog dimes seems to take place in the dichotomous framework of either fullfledged subscription models or free-for-all. I think micropayments in a wider sense than per article make a lot more sense (ie. services attached to content, special events, apps etc) for anyone looking beyond that black-or-white picture.
Simon Owens said
Gawker Media no longer pays its writers based on page views, Nick Denton cut out that cash cow months ago.
Information wants to be free, reporters want to paid, Part 17 « 4TH ST8 said
[...] along comes this blogger named Greg Horowitz, who claims to have “more than a decade of experience using online marketing, product management [...]
Greg said
Simon, you’re right. I had heard that Denton had changed the payment structure, but I thought there was still some sort of pageview incentive in place. Apparently not. Anyway, regardless of what the current arrangement is, or why he changed it, I haven’t heard anyone make the argument that pay-for-performance leads to quality journalism, and I can only imagine that the problem would get worse were the relationship between content and revenue made more explicit in the form of micropayments.
Drew said
So the upshot is that its the civic duty of readers to pay journalists extra money for articles they don’t want to read? Why not just pay for journalism out of taxes and be done with it?
Luckily, most proposed micropayment systems are about as clunky and clueless as you could get. Oh boy, instead of iTunes for the web, I can register and subscribe 30 individual times with 30 individual sites without any central bookeeping on how much I’m spending browsing the web.
But look: brand value IS going to be destroyed to some extent. I can read an article on the web without much concern as to who is hosting it. If something is too expensive, then there are plenty of substitutes. And at SOME point, yes: performance and popularity are going to have to come into the picture when we’re talking about direct revenue streams: i.e. the web equivalent of someone buying a newspaper. That’s not necessarily all a bad thing. And that’s not the only revenue stream to be had either.
Dan Sachar said
Drew, consumers pay all the time for articles they don’t want. The price point is low enough for most publications that they make the determination that the price is low enough for the content they do want.
Drew said
“Drew, consumers pay all the time for articles they don’t want”
Only because they came bundled with the content they did want due to the mechanics of print publishing. But there’s no natural restriction on that anymore. Civic duty type journalism that few people really read simply has lost value in terms of DIRECT revenue and there’s no going back: readers by and large seem more and more to enjoy the chatter ABOUT the original content more than they do the original content (we’ve always known this of course: hence the popularity of the editorial and letters section, but it’s never broken out like this before). But that’s not the END of that sort of journalism, it just means finding new ways to sell that larger value to someone. Hell, many hospitals only stay afloat because of how much money their plastic surgery departments bring in. There are ways to make important, but unprofitable activities work.
And as a consumer, I wouldn’t mind at all paying, say, a hundredth of a penny for every blog post I read, or a tenth of a penny for every article I read. And if there were a centralized payment system for the entire web, I’d be fine with that. I think most consumers would. As I once noted, I think it’s the ingrained sense of signup hassle that consumers object to (not to mention being locked into things with “subscriptions” to publications that in two months might no longer be the next big read) not the fact that there’s a price. There’s ALWAYS a price: I just happen to think that it’s way way lower, when you factor in the entire web, than most newspapers considering micropayments are willing to admit. I would be more than willing to pay 1$ a day if every blog post, article, and so on I read were priced well: even at 1c per item, that’s 100 different content items per day, and I barely ever read that many.
Another slice: say that the papers want to charge ten cents for their top article. If every subscriber to the print edition of the NYTimes (1 mil a day, say) were part of that payment system and then reads just the top article, that’s 100,000$ in direct revenue for the article. There’s no way that several day’s work, a few weeks a most, employing a handful of people and the resources necessary to research and edit it, is worth 100,000$ in direct readership payment when it has to compete with the rest of the content on the internet (a lot of which is fluff, to be sure, but fluff people enjoy), talk radio, and so forth, all discussing and reporting on the same matter for free (though nowhere near as in depth or well researched, I agree). And that 100,000$ isn’t even counting the potential value of well targeted ad revenue (heck, being online would allow to target ads to consumers that adjust BY THE PARAGRAPH as they scroll down, rather than even just by the article).
Why micropayments won’t corrupt journalism | Dave Lee / jBlog said
[...] Jarvis hops in: Greg Horowitz raises an issue with micropayments that I haven’t seen discussed, one I’d think the heavy-duty journalists [...]
Web News Site » Blog Archive » Wait… Wouldn’t Micropayments Be Bad For Journalism? said
[...] 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 [...]
Journalista - the news weblog of The Comics Journal » Blog Archive » May 15, 2009: A lot less zoning-board recaps said
[...] Greg Horowitz asks an obvious-in-hindsight question about how micropayments might affect journalistic integrity: [...]
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[...] the whole thing here. SHARETHIS.addEntry({ title: “Service Journalism: Brilliant MicroPayments Takedown”, url: [...]
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[...] win, yes, to a certain extent. Journalists? Up for debate. Consumers? Not likely. There are plenty of content providers out there who have figured out how to [...]
There We Go Again. No, Micropayments Won’t “Save Journalism” | Viningmedia Nieuws said
[...] win, yes, to a certain extent. Google? maybe. Journalists? Up for debate. Consumers? Not likely. There are some content providers out there who have figured out how to [...]
Mash123 » There We Go Again. No, Micropayments Won’t “Save Journalism” said
[...] win, yes, to a certain extent. Journalists? Up for debate. Consumers? Not likely. There are plenty of content providers out there who [...]
The Far Edge » Blog Archive » There We Go Again. No, Micropayments Won’t “Save Journalism” said
[...] win, yes, to a certain extent. Google? maybe. Journalists? Up for debate. Consumers? Not likely. There are some content providers out there who have figured out how to [...]
Dave Hendricks said
I agree that publishers need to focus on alternate revenue streams. Originally publishing online WAS an alternative revenue stream. Unfortunately for them they haven’t figured out how to make it the main revenue stream.
Publishing online has one major advantage that offline doesn’t: deep audience intelligence. If the papers used it right, they could sell better ads and drive better editorial. They can drive lead gen. They can be a great place to find a job, even with Craigslist and linkedin. But without knowing who is visiting and why, they can’t do this.
It seems stupid to me that all online publishers don’t at least ask for a basic email address for access to their content. Validate the address, drop a cookie and you get unfetttered access in exchange for the right to better content – advertising and editorial.
The Tin Foil hat crowd clearly dominates the ‘free’ argument. Publishers should not worry about them and worry about customers who want their product. by blocking the few complainers who won’t register (or even pay a dime) they will lose very few page views and will gain far in excess of what they lose. Those people ignore their ads and use ad blockers too.
Jeff Jarvis is flat out wrong on this topic. So is Techcrunch. Free Journalism is a 1996 internet concept and it will go away. Or Journalism will go away. Blogs will not fill this void. After all, they get all their news from the professional media.
If you want to vote on how this will be resolved, visit my blog at http://www.permissiontechnology.com and vote on it.
Thanks, like your site.
Dave
jetwit.com - TheDigitalists: What would micropayments mean for journalists? said
[...] For all the journalists and aspiring journalists out there, and heck, for all the writers too, Greg from TheDigitalists.com addresses a relevant question in the larger quest to figure out how newspapers are going to make money on the internet: What would micropayments mean for journalists? [...]
Jornalismo e micropagamentos | träsel/blog said
[...] para os acionistas das empresas, mas o fim da reportagem séria. Como pergunta Greg Horowitz em uma coluna do blog Digitalists, o que os executivos vão fazer assim que tiverem informação mais detalhada do que nunca a [...]
Woodward and Bernstein don’t live here anymore « The Soft Lobotomy said
[...] Campbell said that at the Columbian’s high-water mark, online ad sales were bringing in 10 percent of total revenue. He thinks that the online newsroom of the future (i.e. one that makes extensive use of unpaid stringers “citizen journalists”) could sustain itself with online ad sales making up 30 percent of revenue, Web-based subscriptions 5 percent, and the rest from a mix of endowment funding (from whom, exactly?) government funding (ah, there’s the answer) and of course, iTunes-style “micropayments” — for articles instead of songs, an idea which will either save newswriting as we know it or destroy the industry entirely. [...]
Study: 33 percent of Digitalist Bloggers Would Pay Steven Brill to Just Go Away « The Digitalists said
[...] advertising), so he’s earned the right to crow. However, I don’t think [...] Dan SacharWhat Would Micropayments Mean for Journalists? May 13, 2009Like a bad case of herpes, the idea of micropayments refuse to go away, with News Corp [...]
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[...] system is not going to recreate that system of artificial scarcity and control — and some have argued that micropayments could even be bad for journalism as a whole, putting pressure on individual [...]
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