As news publishers continue to explore ways to boost digital revenues that remain incommensurate to the golden days of print, interest in micropayment systems appears to be gathering speed.
The most well-known model, of course, is the Dutch news aggregator Blendle, which launched in April 2014 and now boasts more than 360,000 users and a $3 million (£197.4 million) investment from The New York Times and Axel Springer.
The company also recently announced it will launch in Germany in September, where it has already signed up major publishers including Bild, Die Welt and Der Spiegel.
On the other side of the Atlantic, this May, the Winnipeg Free Press in Canada, became the first legacy publisher in North America to take a gamble on micropayments on its own site.
“So we approached things a little bit differently than our counterparts in the industry, because we were able to learn from what they did, evaluate it, and try to adjust the model a little bit.”
The Free Press rolled out its pay-per-article system on May 11, along with a responsive site redesign and brand new paywall.
Visitors to winnipegfreepress.com are now only able to click into two stories before a pop-up appears asking that they log-in and add a payment type to their account. Each visitor is offered a 30-day free trial to what Panson refers to as the “read now, pay later” service, after which they are charged 27 Canadian cents ($0.21 US) for each individual story they read.
Removing barriers to business
Micropayments help to remove some of the “barriers to doing business” that affect how likely someone is to take out a news subscription, explained Panson, reducing the levels of “commitment” they have to make in order to access articles.
Similarly, the 27-cent cost-per-article was chosen as an amount low enough to reduce another barrier – hesitation over whether a person wants to read an article enough to buy it.
Panson said the Free Press did “lots of research” to come up with the 27c price point, although he admits “frankly we don’t know if that’s the right amount”.
The Free Press micropayment system has been orchestrated so the outlet can choose to introduce variable pricing for different types of articles if they wish.
“We’ll probably add some complexity to the pricing model in the future once people are accustomed to it,” said Panson, event touting the idea of news “Happy Hours” where stories cost less to read between certain hours of the day.
However, the Free Press is keeping things simple to start with a one-price-fits-all model which aims to reduce another potential barrier to business – the audience’s ability to get their heads around how the new micropayment system works.
The Blendle Way
Across the Atlantic, Blendle is already offers multiple pricing for stories.
Publishers are free to set the cost of their articles, generally between €0.10 ($0.11) and €0.79 ($0.88).
The platform incorporates every major newspaper and magazine in the Netherlands as well as international publications such as The New York Times, Washington Post and The Wall Street Journal, who all signed up to the platform in March 2015.
And in addition to Blendle’s forthcoming expansion into Germany the company is also working on a US launch, although founder Alexander Klöpping told TheMediaBriefing “it’s hard to project when that will be”.
However, the 28-year-old does not attribute Blendle’s success to micropayments alone.
Rather, he said, it is down to the golden triangle of choice, convenience and curation.
“What makes Blendle work in the end is that triangle between having a filled catalogue with all that major newspapers and magazines in a country that you’d expect; having one login, one registration that makes it easy to pay for everything [and] being able to find the content that is most relevant to you [though curated topics],” said Klöpping.
“When you just take the micropayments part of Blendle, I don’t think the results would have been as spectacular as they are right now, because it is really about the three pieces [of the triangle] together.”
The Canadian way: a new model
Unlike Blendle, which operates a pre-loaded payment system which users must top up, rather like a pay-as-you-go mobile phone, the Free Press is the first publisher to offer a “post pay” system, allowing users to read as many articles as they like before paying at the end of the month.
However, both platforms offer a refund option which users can make use of it the story was not what they expected.
The micropayment system applies to all stories on the Free Press site, from breaking news to community stories and even obituaries – although Panson points out the deceased’s loved ones can still read in memoriams without paying, although they’ll need to apply for a refund to do so.
Despite this, big stories where public health or safety is at risk are likely to appear outside the paywall, such as the recent news concerning mail bombs targeting three women in Winnipeg, leaving one of them seriously injured.
“When those kind of public safety things come out we will make those articles free,” assured Panson.
While news organisations are of course business-orientated enterprises, such actions remind us that a core value for newsrooms should be to inform and protect the community they serve.
For example, in the wake of the 2013 Boston Marathon bombing sites includes The New York Times and The Wall Street Journal allowed non-subscribers to access those stories outside of the paywall.
Paywalls vs. meters vs. micropayments
Recognising the need to better monetise its audience of 1.5 million monthly unique users, The Free Press first started looking into options in February 2014.
A hard paywall was dismissed on the grounds that “you have to have something nobody else has, or you’re going to turn away most of your readers”.
That reasoning makes metered paywalls a preferable choice for most publishers – The Boston Globe switched its paywall from full to metered in April 2014.
However, the problem with metered paywalls, as Panson sees it, is this:
“You convert your loyalists, the people who are already reading hundreds of articles a month… The problem is that’s a relatively small amount [of your total audience].”
Micropayments, on the other hand, offer an opportunity to monetise what Panson calls “returning readers” – the middle group between the “loyalists” and the “casuals” who dip into news sites indiscriminately to read an article discovered via social or search before bouncing off again.
Returning readers, he explained, are “the people who, in a metered environment, hit their 10 [articles] and they leave”.
Put another way, they’re the readers who are unlikely to pay $20 or so for a regular subscription to read the 11th article, because that’s a huge leap from paying nothing to read the first 10 articles. They will, however, come back and read their allocation of 10 free articles the following month.
Sites with metered paywalls are missing a trick with this middle group, said Panson, meaning micropayments potentially offer new and better opportunities for monetisation.
Not everyone is keen on the idea of micropayments
Writing on Medium, Will Federman, audience engagement editor at Fortune Magazine, said:
“Consumers pay for convenience, habits and actions… But there’s nothing habit-forming about articles in the year 2015, nor truly convenient. The convenience of an online article is limited to the scarcity of supply (of which there is none).”
Klöpping wrote his own response to Federman’s post, taking issue with (among other things) the assertion that only one in five registered users were paying to top up their accounts.
“I don’t think anyone right now is thinking ‘This will save journalism. Everything will be alright and there will be rainbows’. I don’t think that is something that we can do,” he told TheMediaBriefing.
“But at the same time, we launched a little over a year ago and this is what we achieved in Holland, with a user-base that’s hundreds of thousands in a small country.
“Getting one in five of them actually to pay, to my knowledge, is pretty incredible.”
Among online audiences in the countries surveyed for the Reuters Institute for Journalism’s 2015 Digital News Report, fewer than one in five said they were willing to pay for news.
The countries most likely to pay for news were Finland and Denmark, where 14 and 13 per cent of people respectively have a regular news subscription or opt for micropayments.
That figure drops significantly for the the UK (6 per cent) and Ireland (7 per cent).
Panson concedes that Federman may have a point over whether people are willing to pay for news.
“I don’t think he’s completely wrong,” he said. “I think there are certain people who will absolutely not pay for an article, and this will be a really good test.”
Panson readily admits that The Free Press’ adoption of a micropayment model “puts us on the hook for delivering high-quality content”.
This is where producing original stories and research pays off, quite literally.
Likewise, Klöpping notes that of the four per cent of Blendle articles refunded tend to be overwhelming those where the headline “doesn’t really deliver, like a clickbait headline in print”.
For gossip magazines, the refund quota can be as high as 50 per of stories read, he added, a sign of how annoyed readers get when an article isn’t what they were expecting.
Building blocks for a new area in journalism
Panson readily admits the Free Press micropayment model is something of an experiment, adding: “We don’t know what direction it’s going to go.”
“We just know that we’ve done a pretty good of growing our audience, but that alone will not pay the bills to keep doing the work that we do,” said Panson.
Whether Blendle will work in the US – a country considerably bigger than the Netherlands – remains to be seen.
However, Klöpping believes while micropayment systems might not provide an answer for publishers to replace print revenue streams completely, the convenience of the pay-per-article model is one way of encouraging people to pay for something they are used to getting for free.
As a sign of how micropayments can be used to complement publishers existing monetisation efforts, Blendle is currently looking at how the platform can be integrated into publishers own websites.
One Dutch magazine, Vrij Nederland, has already implemented this by accessing Blendle’s API, as part of a ‘public beta’ for their new look site which went live last month. Klöpping notes that any publisher can do this – offering short articles for free while longform stories are pay-per-article.
“I’m not saying that micropayments is the answer,” he admits, “but I think it’s one of the building blocks that will be very important in the ways that people start paying for journalism.”
Image courtesy of Tax Credits.