Nieman Foundation at Harvard
HOME
          
LATEST STORY
Two out of two news organizations recommend user research
ABOUT                    SUBSCRIBE
Feb. 19, 2009, 9:40 a.m.

The micropayment debate continues

Is it possible to be fascinated by an issue and yet tired of it at the same time? If so, then micropayments for online news pretty much fits that bill for me. I know that it’s a crucial time for the newspaper business (which pays my salary), and I know that many thoughtful and intelligent people believe that micropayments are the answer to the industry’s woes — including former news executive Alan Mutter, who blogs at Reflections of a Newsosaur, and whose recent argument about paying for things I took on in this post. But there has been an awful lot of talk about the issue over the past few weeks and months, including some excellent pieces by Clay Shirky and others (I’ve collected a list of the major ones at my personal blog if you’re interested).

And still the debate continues. The Freakonomics blog at the New York Times is the latest to throw its rhetorical hat into this particular ring, which seems fitting given the authors’ focus on the conjunction of economics and society. Both Alan Mutter and Clay Shirky show up in this forum as well, making similar arguments — the former in favour of micropayments, which he says will overcome the “Original Sin” of giving content away for free online, adding that readers wouldn’t mind being nickel-and-dimed “if the content were sufficiently unique and compelling.”

Shirky, meanwhile, argues that:

Online, small payments only work when the collector of those payments has end-to-end control of delivery, generally by controlling the hardware or software the user has access to. (This is true of all metered billing, in fact.)

and adds:

The fantasy that small payments will save publishers as they move online is really a fantasy that monopoly pricing power can be re-established over we users. Invoking the magic word “micropayments” is thus grabbing the wrong end of the stick; if online publishers had that kind of pricing power, micropayments wouldn’t be necessary. And since they don’t have that pricing power, micropayments won’t provide it.

Sharing of content is the key to much of what users (or readers) do online, Shirky argues, and blocking content off destroys that relationship, and arguably makes the content less valuable rather than more. And without monopoly control or a giant cartel, there is simply no way to wall off all of the content — someone will inevitably provide something similar (i.e. close enough) for free and make it sharable. MIT information technology professor Marshall Van Alstyne concurs, saying that micropayments would be like “putting tollbooths on an open ocean.” He says that journalism can be supported by charging based on the platform (i.e., the Kindle), and charging for enhanced value of some kind (different versions, or more processed information, such as that offered by Bloomberg).

William Baker, an executive-in-residence at Columbia University who is looking at new business models, says that he sees journalism being supported by a mix of almost all the possible sources that people have mentioned: micropayments, donations or charitable foundations, advertising and subscriptions. Meanwhile in the comments, readers suggest some additional ideas: One recommends a process by which interested readers buy “shares” in a newspaper, which then funds the journalism and collects donations for it — with any surplus returned to the shareholders. Another suggests that advertisers could support the news directly by offering free subscriptions to readers in return for having them click on an ad (as Salon does).

Will any of these solutions make the difference in an industry whose old business model is being disrupted by a new medium, and may never be the same? Will someone try to put tollbooths on the ocean and actually make it work? Or will we still be having these arguments 10 years from now? I wish I knew.

POSTED     Feb. 19, 2009, 9:40 a.m.
SHARE THIS STORY
   
Show comments  
Show tags
 
Join the 15,000 who get the freshest future-of-journalism news in our daily email.
Two out of two news organizations recommend user research
Here’s how ProPublica and The New York Times are pioneering user experience research within their organizations.
A new app from NowThis wants to reduce the work of finding news to one big red button
Paralyzed by having to choose what news story to turn your attention to next? Tap For News keeps “everything super, super simple” by eliminating that choice.
“Modern” homepage design increases pageviews and reader comprehension, study finds
A new report from the Engaging News Project shows that users prefer modular, image-heavy homepage designs.
What to read next
1119
tweets
New Pew data: More Americans are getting news on Facebook and Twitter
A new study from the Pew Research Center and Knight Foundation finds that more Americans of all ages, races, genders, education levels, and incomes are using Twitter and Facebook to consume news.
691Newsonomics: The halving of America’s daily newsrooms
If you’re lucky enough to have the right deep-pocketed owner buy your paper and steady it, you’ve won the lottery. If you’re in a town whose paper is owned by the better chains, or committed local ownership, your loss will probably be mitigated. Otherwise, you’re out of luck.
551“Modern” homepage design increases pageviews and reader comprehension, study finds
A new report from the Engaging News Project shows that users prefer modular, image-heavy homepage designs.
These stories are our most popular on Twitter over the past 30 days.
See all our most recent pieces ➚
Encyclo is our encyclopedia of the future of news, chronicling the key players in journalism’s evolution.
Here are a few of the entries you’ll find in Encyclo.   Get the full Encyclo ➚
The New Republic
NBCNews.com
OpenFile
Lens
The Guardian
The Wall Street Journal
Reuters
Politico
GateHouse Media
El País
Topix
Investigative Reporting Workshop