This article is very strange. Firstly, the five companies that are listed are just such an incredibly diverse group of companies. I don't know what's going on, but I don't think that we can really say that Business Insider is succeeding for the same reasons as The Information. Is Axios - who have been on a run with their access journalism succeeding for the same reason the left wing "Explainer" site Vox is?
There are interesting points to discuss here - regulatory capture through copyright laws for example. But they seem to have nothing to do with the list of companies.
But then we reach the end of the article:
> Venture investors known for expecting quick returns tell Axios that they are beginning to take a longer view of their investments in publishers that have more sustainable business models, like subscriptions.
This is nothing to do with actually discussing success, this is about investor relations, Axios trying to put out PR either in a run up to going for another funding round or because some investors are getting antsy. As an investor it would worry me that my investment is spending its time doing this sort of thing.
Vox is not just a single "left-wing explainer" site, it's a publishing house with several very prominent brands - the Verge, SB Nation, New York magazine, etc.
> A global wave of new copyright laws means that platforms are likely to have to start paying publishers for the right to carry their content, even if it's just a linked headline or bit of text.
Paying for links seems incompatible with how the web works, and with copyright law (as URLs are factual information which is not subject to copyright.) Paying for quoting headlines or tiny excerpts of text also seems to be incompatible with fair use.
But at what cost? WashPo, NYT, Bloomberg, even Medium!, are paywalled to the point of exclusion of the vast potential audience they could have. Axios,NPR, BBC, and The Guardian, have not succumbed yet. I hope they do not.
I really, really wish some kind of micropayment system had taken root by now. I don’t want to buy a full-blown subscription to the NYT, but the home page experience on mobile is truly awful today. Experience is similar on plenty of other news sites, too.
I was the lead for a large tech company's efforts in this area for a few years (not anymore, so take my comments with a grain of salt). I spoke to many of the major publishers globally as well as some niche site aggregators, aggregated local news players, etc. The challenges were manifold. They are linked between what publishers are succeeding with and what users want.
On the publisher side: Large players were already making good money off of subscriptions and so micropayments would undercut that. They often didn't want to co-brand/co-market in any bundle or even under the same product umbrella with most other major players for brand/other reasons (owning the relationship with the customer was very important and they didn't want to be disintermediated anymore), and they often didn't want to be associated with medium to small publishers because they felt that was free-riding and diluting their brand. But most importantly, they were confident, as can be seen in articles like these, that ultimately, they could go it alone and therefore should. As for small to mid-sized publishers -- the problem really was that there wasn't enough meat on the bone in terms of willing-to-pay-traffic to warrant a service provider building a business around it. I think there could be a viable, non-venture product to be built if you can find the right bundles of niche pubs to band together.
On the consumer side: Enough people are slowly willing to pay the high fees for the big sites to not be worth investing in lower tier options. Not enough people are willing to pay enough for smaller sites to be worth their while. Many people logically say they are willing to pay a small fee for sites; for example, let's say publishers were charging $0.01 - $0.05/pageview -- you'd logically say that's reasonable amount to pay, you'd be shocked how few people will opt for that, and how many folks who do opt for that feel a sense of sticker shock when they see the bill.
Other issues: Actually charging consumers on a micro-level is a huge pain if you charge in currency, and from what I've seen now having worked in crypto, it will take a while before that model makes sense to the average consumer. Happy to discuss more.
There’s decision fatigue on parts of consumers too. Should i pay for this now or not? If the publisher demands payment after the fact, then they barely have any leverage in the transaction. If before, there’ll be a lot of hemming and hawing (like the app store).
In addition people balk at the subscription price compared to netflix. They forget that there’s still a price floor to production and a publishers audience is smaller (and maybe geographically restricted) while netflix has massive economies of scale and can amortize its cost over the entire population.
I’m seeing this kind of pricing disparity everywhere (the app store, publishing and what not). I don’t know what’s the solution. Bigger companies have distorted pricing expectations of consumers, especially when so many services/apps are available for free supported with ads.
Yeah. The only way to overcome this is to bundle. And bundling with pubs is hard. How can I charge a single, Netflix like payment to access content from huge publishers (NYT, WaPo) and small niche blogs? How do I divvy the cash up? What's worse, because a lot of the web content that people want in this bundle is time-sensitive, I can't just build a content catalog by licensing syndicated hits like "Friends" equivalents to buoy the rest. These were exactly the issues these projects face.
> and from what I've seen now having worked in crypto, it will take a while before that model makes sense to the average consumer.
Its hard to forecast these things, but micropayments for online published content seems like the one thing I do really see cryptocurrencies doing a great job. Often, its not just that people are unwilling, but that their payment systems are just not an option.
This would perhaps also allow publishers to stop the practice of selling user data for advertisement... although, I wouldn't really count on that.
5 cents per page views quickly adds up--20 views is a dollar. But if you charged 10 mills, the cost would be negligible to the reader, but given the Internet's numbers, these soon turn into real value. A "mill" is a thousandth of a dollar. One thousand page views equals $1.
Thats exactly what i was thinking too. Advertising doesnt make them much more and it comes with a lot of hassles. Im surprised a micropayment system hasn’t arisen yet
Here's one challenge with micropayments: how do you charge micros? There are a few challenges here. One, the cost of payment processing is high, and so you can't "pay as you go". If you bill in arrears, you may still face this problem, your customer may be upset or dispute the final bill (was a page reload billed when they believe it shouldn't be?, etc), or customers may default and you have to foot the bill.
The other option (which we and others tried) was to up-front charge a fixed rate, say $5, and debit against it as you go. Perhaps you "top up" when the account balance hits some threshold. This is analogous to how many toll payment systems worked in the US, so the assumption is customers will understand and accept it. It also solves the payments processing problem.
We uncovered three psychological issues in our research and implementation with large numbers of users: 1) People will be unhappy suddenly paying for something they never had to pay for before (trying to analogize with tolls is equivalent to the "cost of a coffee" pricing strategy) 2) People are very particular in terms of which sites they want to micro-pay for, but shockingly unwilling to choose them a-la-carte 3) People HATE variable payment schedules. People didn't like seeing charges hitting their cards when the top-up threshold was reached at unexpected times, then proceeded to complain about what sites they were billed for and how we determined billing and then churned.
There's another challenge to mass adoption for micropayment systems and it's around publisher compliance and the publisher-user relationship micropayments represent: how to get money into the hands of the publishers. If you rely on every pub to sign up, that's not going to work. And if users realize that they're paying into escrow accounts that these service providers control and that aren't going to the publishers, they'll mutiny.
Honestly, I'm not sure this micropayments for articles will ever take off. I tried a service recently that is trying to make that monetisation method a reality, and every time I clicked on an article, I'd have to do that mental calculation – "Hmm, is this going to be worth that 10-25¢?" Even though they allow you to get an instantanous refund if the article didn't bring you value, you're still thinking about your media consumption from a much more cold and calculated angle. I'm not saying a model like Spotify or Netflix is better for the media industry, but it's a model people prefer for a reason. You set up that recurring payment once, and just go forth and enjoy content.
Micropayments would work if you charge mills, and not cents. You wouldn't even bother worrying about spending, say, 10 mills. But given the Internet's numbers, these add up, and quickly.
> Micropayments would work if you charge mills, and not cents. You wouldn't even bother worrying about spending, say, 10 mills.
Your example is incoherent. 10 mills is a payment in cents. The only reason to call it "10 mills" is that you're hoping people won't understand what you mean.
He's not arguing that the price should be less than one cent. 10 mills is one cent. He's arguing that "micropayments would work if you charged mills and not cents, and that's why you should charge a cent".
People really hate the idea of pay-as-you-go for online information. It's not just about pricing, it's about monitoring. You would need a central or aggregated service so could see your costs in real time, otherwise people would be getting huge bills at the end of the month.
How do you even begin to put a price on individual articles though? Should you charge the same for a long form article that took months to research as the latest commentary on The Voice? Do you charge the same to a wealthy CEO as you do to a kid in highschool from an underprivileged background?
This is the crucial issue, but I think price discrimination by user-persona is way more downstream. Even assuming there's a sufficient population willing to pay, I believe the challenge is, how does the publisher value its content v. the user in terms of willingness to pay. And how does the user value content before they've been charged v. after they've been charged. And as you stated, how does content value vary within a publisher's content catalog. Viewability and ad slots (crudely stated) was the way that ads tried to solve the latter, but would users feel similarly? Especially since this created loads of paginated content such as "top 10 lists".
I suspect the reason we don't see this is because subscribers probably consume less than they pay for. To say it another way, many subscribers currently paying $10/mo for NYT do not consume 100 articles in the month, on average. If those subscribers switch to pay-as-you go it would be a net loss, even though the audience may have technically expanded.
e.g. - a consumer will pay $10 to consume the first 30 articles in a month, but the 31-100 articles have a diminishing utility (so much time in the day to read). If they paid per article from the start, overall they would pay less.
If we were to say 1 article per day from NYT is interesting, a person would consume 30 articles in a month, paying $3. The NYT would need to triple their pay-as-you-go readership to break even. In reality, it's rare that a pricing change as such would accomplish a 3x gain in readship. So, the status quo continues.
Just for the record, I'm not judging your idea, just adding to the conversation of why it hasn't likely happened. There is probably room for a competitor to offer that sort of pricing, but it likely wouldn't work favorable for every organization, from a shareholders perspective.
I realize that. And there are too many sites that I'd want to read, even just from HN links. So the per site subscription model is just unworkable. So from me, they get nothing now.
But with a system for transparent nominal payments, where payments under few cents were OKed by default, they'd get at least something.
I doubt that I'm unique. But maybe I'm unusual enough that the scheme would never work.
Personally, the issue I would have with a pay-per-read model is predictability and the additional cognitive load. If I pay $10/month for a subscription to a publication, I can budget that out for the entire year and then not think about it. Whether I read 5 articles a month or 100 articles in a month, I don't have to care how much I read. Maybe a pay-per-read model would be a net savings for me, but it'd have to be a significant savings because now I have to track how much I've read in order to stay in my budget. It's yet another cost to track and think about. Within reason, I'd rather pay the premium to have one less thing to think about.
This also avoids the issue of having to decide whether an article is worth it or not. If implemented incorrectly, it would make devolve into clickbait titles.
One way to fix this would be to have a preview of each article available for free, or at least the first ~N paragraphs.
One of the real value of Netflix (/ Spotify) is that while you are committed to spending X amount of $/£/... per month, you get to potentially share that account with other people.
I think having the ability to subscribe to multiple publishers with a flat fee that you can spread across multiple people would go a long way.
Either with your family / friends or with some random on the internet, deciding on a bundle and pooling that money so that publishers get their $$ and you get multiple sources of content.
Just a quick heads-up, the page name for the article you linked looks like it got improperly formatted and is unintentionally just a string of HTML from the page source.
Which is why the system would have to be based on something other than landing on the article. Article length factored in with even making it to the bottom of the article would be better than just arriving on the page.
I'm not sold. Yes, but at the same time AP News and Reuters are free and widely accessible. For people who want 'just the facts' journalism it's there. All WaPo, NYT, and Bloomberg add is spin, hip op-eds/opinion articles, and occasionally a scoop that'll be widely available within 12 hours elsewhere anyway. Whoever the losers are here, it's not the consumers.
You used to have to pay money for the NYT pre-internet too. There was an anomaly in the middle but NYT reporting costs big bucks and someone’s gotta pay for that shit, either the reader or the advertiser.
There are interesting points to discuss here - regulatory capture through copyright laws for example. But they seem to have nothing to do with the list of companies.
But then we reach the end of the article:
> Venture investors known for expecting quick returns tell Axios that they are beginning to take a longer view of their investments in publishers that have more sustainable business models, like subscriptions.
This is nothing to do with actually discussing success, this is about investor relations, Axios trying to put out PR either in a run up to going for another funding round or because some investors are getting antsy. As an investor it would worry me that my investment is spending its time doing this sort of thing.
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