Micropayments and digital media haven’t exactly enjoyed a happy relationship so far, and this is a bit of a travesty according to Greg Golebiewski.
Who is Golebiewski? You might not be surprised to learn he is the CEO of a micropayment provider, Znak It. So his argument is a little self-serving, but still valuable. In the age of newspaper paywalls, Golebiewski tells Paid Content newspaper publishers are missing a trick with not using micropayments to, say, offer a single article for a few pence to entice new readers. One of the schools of thought around paywalls is they’re not half bad for monetising online readers, but sub-par when it comes to growing a reader/subscriber base.
Says Golebiewski, “it’s extremely difficult to break that notion, the theory that micropayments don’t sell. [Critics] don’t have any data… it’s very difficult to go to them and say we have a flexible system for payments and then when they figure out it’s micropayments, they stop listening.”
Speaking of data, Znak It has some to back-up the CEO’s enthusiasm for micropayments. The company ran five pilot projects to see how many participants would buy a range of digital content; videos, music and written. Some 1,281 “buyers” emerged from a total of 43,000 unique users. According to Paid Content, “as many as 5 percent of the unique users wound up becoming buyers (paywalls usually get about one percent conversion).”
So what’s going to get micropayments into the mainstream? Google/YouTube might be the answer. Stick with me.
Google’s online video behemoth has been linked to the idea of a subscription model service, supplementing the traditional ad-revenues, for quite some time. Fresh rumours emerged in this weekend’s FT, with a report declaring “Google is on the verge of unveiling an à la carte subscription service for some of YouTube’s specialist video channels” (alternative info here for those sans an FT sub).
“A la carte subscription service” is a little vague, as rumours tend to be, but the article goes on to say users could subscribe to channels “as little as $1.99 a month”. I guess that’s a la carte in the sense you pick a channel to subscribe to, rather than ‘subscribing to YouTube’. Whatever the specifics, this isn’t a million miles away from a micropayments system. True you’ll be subscribing to an entire channel rather than a single video, but chances are it’s a single video that will be the trigger to purchase in the first place – so not so far from buying one newspaper article through micropayment. The relatively low cost is another similarity.
The new system, combined with the prevalence of YouTube, could bring the concept of micropayments to a mass user base. It’s simplistic thinking, but it’s a start – and not the first time a big technology company has kick-started a digital content payment trend. How many people would have spent a few quid on a small software program for their mobile in 2006?
It could happen. Bit ironic potentially too – if Google ends up helping newspaper publishers develop a revenue stream from micropayments, after the ‘evil’ Internet got them into this fine mess in the first place.