
Flattr, and Why It's Brilliant - danielrm26
http://danielmiessler.com/blog/flattr-and-why-its-brilliant
======
patio11
There still seems to be a _huge_ barrier to adoption: getting people to sign
up for a subscription to Flattr their first site. There are sites worth
subscribing to see and there are sites which are not. The sites not worth a
subscription have an incentive to freeload on the ecosystem by not working on
the pre-sale of the Flattr account and instead just soaking up the one-click
transactions. The sites that are worth a subscription will have to heavily
presell the subscription, without their best single reason to subscribe
(imposing a paywall) and with less efficiency than just setting up a paywall
subscription system for themselves. Plus, instead of getting to keep 90% of
the $6 a month that they'd get if they sold you on a subscription to their own
site, they'll end up giving most of it away to freeloading sites.

See also Contenture, which was essentially identical to this business model.

There are also interesting problems in a world where everyone has a Flattr
account, but we're not in that world and won't ever be.

~~~
gojomo
Clearly, getting signups is the biggest challenge.

But there's no way to collect without engaging in some promotion: placing the
Flattr button where it's visible and talking it up.

And the first wave of signups _won't_ be sites that have the subscriber-pull
to add their own paywalls. It's the (much larger) group whose only current
option is advertising. These sites have a more simple calculus: can't possibly
hurt, might help, might create some warm fuzzies if they like the concept.

It's after that group signs up -- spreads the knowledge -- that nudges to
signup could be deployed. These probably aren't paywalls; they're more likely
payspeedbumps.

Contenture had a weak name, weak explanatory copy ("freemium for the
masses"?), and weak marketing/PR. Its automatic subscription-divvying process
would tend more to reward collecting without promoting. And, they quit fairly
early.

The key for any such system to work is awareness, adoption, and critical mass
-- so it's not reasonable to take the example of a different, nearly-stillborn
alternative and suggest it reflects negatively on another variant that's
already acheived more attention.

~~~
akadruid
This still doesn't work. For the flattr buttons to be there, there must be
mugs paying for the system. Those mugs are doing it becuase they think they
are going to be taking money out - but, like any pyramid scheme, only the
people at the top of the pile will make any money. How long do you think those
mugs will keep paying in without getting anything out?

I'm willing to go on record with the following predictions:

1\. No big site will get enough money to be worth the pixels the button takes
up. 2\. No small site will get back as much as they put in. 3\. The number of
people who pay in without expecting to get anything out will be essentially
zero. 4\. Flattr will shut down entirely within 2 years from today.

~~~
gojomo
Many early adopters will get fuzzies [1] from participating, and paying-in,
and delivering shares to their favorite sites, even if they don't get net
payments out. Whether that is enough to break-out into a larger audience is
the question. But it could be self-sustaining at a small level -- as a mutual
appreciation society, with a sort of competition going on among the Flattratti
for each others' shares -- even without a breakout.

It's easy to predict something novel will fail; most truly new things do.

[1] <http://wiki.lesswrong.com/wiki/Fuzzies>

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steveklabnik
I'm really all about Flattr. I wrote a blog post about it when it was
announced. Big wins, as far as I'm concerned:

    
    
      * By being subscription based, it's 'set it and forget it.'  
      * By introducing an upper limit, I don't have to worry about overspending my budget.  
      * Flattr's model appeals to me: if I upvote fewer things, they mean more. Sounds about right.
      * One click donations are so much easier than trying to find and pull out my credit card.
    

I really hope they do well.

~~~
Mark_Book
what's the incentive to set it up in the first place if you're not a content
creator? Non content creators will mentally file it in their 'something
virtuous to do when I have enough money' aka never_never. The content creators
who end up being net donors will stop because their motivation was to make
money not give it. This scheme and the optimism surrounding it sounds like a
throwback to the internet bubble.

~~~
steveklabnik
Supporting content authors. No, really, I'm serious.

I made a comment below about this, you're thinking about the wrong metric. It
doesn't matter if everyone does this, it matters if enough do to sustain
whatever projects are using it. I myself have made money on a project through
solely donations. Not a ton, but that project is also on hold for a minute.

I think you're being overly cynical, and you think I'm being overly
optimistic. The truth, as always, will lie somewhere in the middle.

~~~
Groxx
The first time I activated my account was to send money to Vimcasts, which
I'll probably do monthly now that it's set up. If I find nothing else
flattrable (I'm picky with my money), they'll get a decent amount of money out
of me, and I'll call it worthwhile.

~~~
spacemanaki
Vimcasts is so good, I likely would have done the same, if I hadn't just
donated via PayPal.

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ivankirigin
I'll formalize the thoughts a bit later, but I think most important lesson is
that most people who make good content for free online don't want to be paid
like this. If I were flattr, I'd pick a bigger market to attack to get
profitable and then keep this model alive for those who want it.

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mxavier
I know I am oversimplifying this and it could be my inherent cheapness
speaking but whenever I hear about a service where I need to pay someone to
give other people my money, I back away slowly and then run. So perhaps I'm
not targeted user, but I do think that if there _are_ people who would use
this, we'd probably seem more thought, time, and effort go into blog posts if
people felt that they would receive something more tangible than a nice
comment.

~~~
steveklabnik
When you use a credit card, you pay to give someone else money. When you use
PayPal, you pay to give someone else money.

Just because it's a hidden cost that the merchant rolls into the price doesn't
mean it isn't true.

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mhd
AFAIK, this is getting quite huge in Europe. I sure hope that the company
itself isn't legally attached to The Pirate Bay, because if that ever goes
down (and stays down)…

<http://news.bbc.co.uk/2/hi/technology/8512263.stm>

~~~
danielrm26
Yeah, I hope this thing takes off and can stand on its own.

~~~
adw
I'm pretty sure the only legal connection is Peter Sunde himself. Flattr's UK
ops are based out of our (shared) office, White Bear Yard.

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tomjen3
There are plenty of problems with Flattr.

There is no way to charge for content - you have to rely on the user both
having flattr installed and being willing to give you something.

As a content producer you have a direct monetary incentive to not link to or
recommand others who also use flattr, as it lowers your cut. The service thus
have to work against network effects - the more people who use the service,
the worse of I am. At the same time there is no point in installing it on a
website, so it has to fight network effects just to get accepted.

I doubt this will be around for long.

~~~
gojomo
Those are smallish problems. At first, you're only getting signups and
payclicks from the very generous and conscientious -- early adopters. But that
starts the process of making a larger group aware of the mechanism.

At some point, you throw some switches that give those early adopters some
other slight benefits -- single-page articles, skipped interstitials, early-
access. That nudges a slightly larger, more self-interested group to signup.

Any ad-supported site already has disincentives to outlink -- the reader
leaves! Other sites will get the impressions! But they still do outlink,
because ultimately audiences value usefully-outlinked content.

But also, every Flattr site is an advertisement for the network. When 99.99%
of your visitors are not yet Flattrers, your top goal is to increase signups,
not slice a small pie even more finely. Sending people to other Flattr sites
best achieves awareness/subscription growth.

And, if that became a real problem, the Flattr central command could
incentivize in-network linking with partial backpropagation of Flattr shares.

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RoboTeddy
I think Flattr (or something like it) has the potential to create a
competitive economic system for digital goods. Traditionally, if you produce
something of value, people will pay for it, and the content creator is
rewarded. That model doesn't work well for digital goods, since they're
nonrival (if you have an mp3, I can have it as well, with no loss to you) and
nonexcludable (you can't stop people having the good, because you can't stop
people copying bits).

Right now, digital content producers often have to support themselves with
advertising, which is usually problematic or impossible. Advertising is kind
of like a shitty version of Flattr where you automatically click the Flattr
button by simply loading the page, and the amount each person donates per
month is the average amount per capita that companies profit due to online
advertising. It's a stupid system for a lot of reasons. The one thing it has
going for it is that people take part whether they want to or not, by viewing
pages and being affected by advertising.

Flattr might make creating digital goods a profitable activity -- and that's a
critical to having an efficient economic system.

~~~
Mark_Book
"Traditionally, if you produce something of value, people will pay for it" but
if there's better value elsewhere that's where they'll go. In this case the
best value of all is FREE ie no flattr account.

~~~
Goosey
Hopefully it will reach a critical mass sufficient to allow sites to REQUIRE a
flattr account to see their content. Note that this is different from
requiring a subscription, since you aren't forced into donating to them. But
you are forced into jumping into the 'donation scheme' so if they produce
content you like, why not click it?

I'm not sure what kind of critical mass that would require though. I think in
some niche areas it would be possible without much effort if there was some
sort of banding together among the major content producers for that niche.

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nmftt
I know they say they are but Flattr isn't a micropayment service, it's a
microdonation service. It's more like an "upvote" than a paypal payment. It's
also about recognizing that most Internet users also are "content creators".
One examples that comes to mind is social news sites. While people might like
what you're doing, generally you get a lot of traffic that is notoriously hard
to convert. If donating were as easy as upvoting maybe things could change.

While signup is a challenge, it will be as hard as getting someone wanting to
donate the minimum amount (currently €2 I think) to someone. Also it's still
in beta and hasn't been "out" for very long.

Last. While I think this "thread" is somewhat decent, could people please
minimize the negativity. When it comes to entrepreneurship it's very easy to
be right, as most things fail. This describes what I mean better than I can:
[http://sethgodin.typepad.com/seths_blog/2009/09/the-
problem-...](http://sethgodin.typepad.com/seths_blog/2009/09/the-problem-with-
positive-thinking.html)

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Mark_Book
I can't see the sense in it. It's analogous to a situation where a newspaper's
only paying customers would be other newspapers. The content creators send
each other money and the only net beneficiaries are Flattr and the vast mass
of interenet users who continue to view for free

~~~
Scriptor
Because the vast majority of people will not be accepting donations because
they aren't content creators. If a content creator puts $10 in per month, he
could quickly get much more back if a hundred non-content creators each give
$1.

~~~
Mark_Book
AFAIK 'donate' buttons have never proved successful. People don't like paying
for stuff they can have for free

~~~
ugh
This is not a donate button.

Donate buttons are complicated and require you to make all those decisions.
With Flattr you have to decide once how much you would like to give per month
and that’s that. One decisions and you can click away. It’s hassle free.

I don’t think we know why people don’t like donate buttons and your hypothesis
(“People don't like paying for stuff they can have for free.”) might be wrong.
Maybe all that’s needed is making donating easier. Maybe not.

~~~
klenwell
I agree. Existing donate buttons are cumbersome and discourage the shift in
perception that's needed. I think Flattr's on the right track but the
subscription model at its base is still overly cumbersome and inflexible.
They've indicated they have more flexible and radical models in mind. Hope
they pursue them.

~~~
steveklabnik
I hope they don't. If it gets more flexible, I won't use it. When this was
brought up on Reddit months ago, everyone wanted to see sliders that
controlled the percentage of amount that went to different people... it's the
definition of a useless power feature.

The simplicity is the entire point. "More flexible" == more complicated, and
then I won't want to use it anymore.

~~~
klenwell
I agree sliders would be overdoing it. But what about penny, nickel, dime,
quarter options. Of course, they'd have to be abstracted for an international
audience, but make it analogous to coinage, spare change, something tangible
that people intuitively relate to. I agree that you don't want too many
options. You want just enough flexibility.

I think a really innovative approach would be a pledge/rescind model. Let
people freely pledge up front up to a certain liberal limit then present them
with the registration, payment, tedious paperwork all at once after the fact.
Let them welsh out on as many pledges as they want. What is a pledge that is
later rescinded worth? Less than a penny obviously but more than nothing at
all. I think most people would willingly agree to follow through on their
donations even with given the opportunity to back out, if the details weren't
too burdensome at the outset.

The problem with every microcurrency scheme I've come across is that it
enforces the kind of rigid transactional exchanges that fit traditional
commerce models when, with a little imagination, they could do very
interesting things with the networking and computational possibilities
available through the internet.

------
meunierc
I too had an early invite, and was all excited to click to register. Once I
saw there had to be a minimum monthly payment, I was extremely disappointed
and didn't sign up.

Supposing the current implementation is extremely successful, it would be the
equivalent to signing up for a monthly service with Disney (or Sony
Entertainment, or <insert your favorite content megacorporation name here>) :
you pay the middleman, who redistributes appropriately to the content
creators.

What's the problem here? This month if I want to buy 1 or 20 CD/DVD, I choose
how much money I give. With the monthly service model, my entertainment
disposable revenue gets converted to monthly preauthorized payments - along
with all my utility bills. Not good.

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pornel
I had early Flattr invite, and decided not to join:

• Before I can put button on my website, I have to add funds to my Flattr
account.

• I have not seen Flattr buttons on other websites, and I don't want to send
whole "pie" to one or two websites I may find in months.

Catch-22.

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mikecane
Flattr would have to be built in as an option to the existing blogging
platforms first to get anywhere: WordPress, Blogger (good luck with that
one!), Tumblr, Posterous, etc. Until all those happen, this won't go anywhere.

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chanux
Good to see it implemented.

[I wrote about the idea a while back:
[http://chanux.wordpress.com/2010/03/08/donation-networks-
to-...](http://chanux.wordpress.com/2010/03/08/donation-networks-to-fight-
advertising/)]

------
Avshalom
Flattr, and Why It's Not:

<http://www.websnark.com/archives/2010/02/by-the-way-the.html>

~~~
gojomo
Not knowing the exact amounts involved isn't a bug -- it's a feature. One
major credible theory as to why previous micropayments systems failed is that
even thinking about amounts added too much friction. A little like converting
a previous voluntary activity to a paid activity, assigning any exact value to
it causes a different decisionmaking-scheme to be applied -- which can then
kill conversion.

Who cares if every Flattr-click is valued differently, as long as overall, the
right people are net-payers, the right people are net-receivers, and the
magnitudes generally reward quality? While some activities (banking) require
precise accounting, many other socially-valuable activities benefit most from
loose accounting.

This criticism ultimately fails because the author himself concludes:

 _Will I put a Flattr icon on the site? Probably. There's no good reason not
to._

Indeed!

~~~
jfarmer
It's not that thinking about amounts adds friction, it's that it changes the
psychology.

Your doctor friend might give you health advice for free, but wouldn't give it
for $1.

Although there is still money involved, it's not at the forefront, so I think
people's psychological motivations are different when they click that button.

The challenge will be convincing people to sign up in the first place.

~~~
gojomo
The monetary amounts move the decision psychologically to a new category. This
new category typically triggers economic weighing of costs and benefits. Such
weighing takes more mental effort than the kind of hair-trigger evaluation a
marginally-costless action (like a comment upvote or Flattr-click) does. That
mental effort _is_ transactional friction, a tax on seriously considering the
transaction. At the margin, some people move on to the next shiny link instead
of engaging in the weighing effort.

The motivation-crowd-out effect is related, as is the "don't insult me by
putting a measly price on this" sentiment (which I think dominates your doctor
example) -- but the theory about previous micropayments that I believe true is
in fact talking about a decisionmaking friction.

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NickPollard
For some reason when I follow this link, I appear to be logged in as Daniel M
with full access privileges - might want to fix that.

~~~
danielrm26
I'm running Wordpress, so let's investigate. Can you send me a screenshot?

~~~
NickPollard
It appears to be fixed now and I'm starting to wonder if I hallucinated the
whole thing, but yesterday I was definitely logged in as you, to the point
where I opened up the control panel and could see and edit the e-mail
addresses you'd registered with.

If it happens again I'll be sure to screenshot and document it properly.

~~~
danielrm26
Thanks, man. I'd love to investigate it.

