Can PayPal Micro Payments Save Newspapers And Other Content Producers?

Screen shot 2010 10 07 at 20.21.57 Can PayPal Micro Payments Save Newspapers And Other Content Producers?I used to read The Times every single day of the week. I loved their sports coverage and it was my “go to” newspaper. Then the pay wall went up and I stopped reading. I didn’t stop reading because they were asking me to pay but I stopped because I really couldn’t be bothered adding in my credit card details and going through the sign up process. What the Times needed to get in order to get my custom was a one click solution that allowed me to make a micro payment without even thinking about it. It looks like Paypal could be about to launch that very system with word that the payment giant is about to have a stab at the micro payment market. I wanted to have a look at just how effective micropayments could be and if they could possibly help some of the struggling newspapers and content producers out there who are all scrambling around for a business model.

Reducing The Friction

Nobody wants to pay for content online because the friction of getting your credit card out is just too painful and time consuming. With a new solution where you pre-load you Paypal account and just click a button without evening thinking about it I think the chances of people paying for content increase massively. I still check the headlines every day on The Times but I don’t go in because of the friction but if I saw something that caught my eye at simply had to make a payment of a couple of cents then that is something that I might just do.

Screen shot 2010 10 07 at 20.25.10 Can PayPal Micro Payments Save Newspapers And Other Content Producers?

Freemium Model

For this to work really well I think publishers will still have to give away a significant amount of their content for free. I can only really see people paying tiny amounts for the really special content that they can’t find elsewhere. Maybe a special live streamed show or a expert analysis from well known journalists. To make this business model really work publishers need to attract large volumes of people and then convert a small percentage of them in to revenue by enticing them to click through to the really good content via micro payments.

People Pay For Apps And iTunes

Screen shot 2010 10 07 at 20.27.56 Can PayPal Micro Payments Save Newspapers And Other Content Producers?The big argument people have against paying for content is that they can find it elsewhere for free and that is true to a certain extent but the examples of iTunes and the various App stores show that people are willing to pay for content. The reason these 2 examples work so well is because the price point is so low and it doesn’t even make you stop and think for a second, you just want the item so you push the button and make the purchase. It’s the exact same mentality that Paypal are trying to tap in to with these micropayments hoping that people will juct click the button to get what they want immediately.

How Many Micropayments Pay The Wages?

The beauty of micropayments is that they don’t take that long to add up. Lets say you look at a popular video show online that has 10,000 views. Normally monetizing that sort of traffic would be very tough even though you had a passionate audience that could not live without the show with ads giving a poor return. Now imagine if every viewer could contribute just 5 cents, a tiny figure that most people would be willing to pay you would imagine and your small web show would bring in $500 without breaking the bank for anybody. You can see how that could easily scale and make a viable business. Now you have to remember that not everybody will be willing to pay (most won’t) but if your content is good enough and produced professionally then there may just be a market here. I do think people will be willing to pay for the best content. The internet is full of noise and poor content at the moment and I have a funny feeling that these new micro payments could be the bit of good news newspapers and professional content producers online need. What do you think? Could micropayments save publishers online?

Lo importante es el camino que recorremos, las metas son apenas el resultado de ese recorrido. Llegar generalmente significa, volver a empezar!

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Gabriel Catalano

octubre 2010
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