Don’t call them micropayments

June 24, 2020
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In a recent CJR article, James Ball argued that so-called micropayments simply won’t work for journalism. I don’t disagree with him. Micropayments, as conceptualized traditionally, offer little benefit to readers or to publishers. They allow cherry-picking of the best content. They disaggregate the products into individual articles. They punish, rather than reward, readers who engage most deeply. They’re a hassle. Taken together, it’s not hard to conclude they won’t work.

I will admit to a bias—I run a company, Axate, that seeks to make a version of this work. But where Ball goes wrong is to draw the conclusion that the only way is subscription. His argument ignores the established fact that subscriptions work only for a small minority of publications and a small minority of readers. There simply must be a way for the others. 

PREVIOUSLY: Why micropayments will never be a thing in journalism

There are some facts we can all—I hope—agree on. The business models that digital journalism currently relies on are not working, and the recent COVID-19 crisis has brought that dysfunction into sharp relief. With advertising revenue suddenly ripped from underneath them, sites that give their content away for free have been left coping with a dramatic fall in income. 

For sites that already rely on subscriptions, on the other hand, numbers have by and large been better. But even in good times, acquiring new subscribers and retaining existing ones is an arduous, expensive business. It doesn’t work for everyone.

So according to the Ball model, we leave the middle majority of readers, for whom payment is not an abhorrent idea, but who resist the commitment and ongoing expense of subscription, as a completely unmonetized group. 

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I’ve worked in news for decades, and my thoughts turned to this conundrum over ten years ago when I was working for a large news publisher. We were contemplating subscription for all our products, and our modeling kept coming up against the same Gordian knot. While the marginal economics of subscription were, and are, compelling, the high value of each subscriber was hard to match with sufficient numbers of them to create a compelling business overall.

For populist tabloid titles, used to selling millions of copies, it didn’t work at all. They’re all about volume; their relationship with their readers is casual, driven by habit, not commitment.

It’s true that, looking around now, things seem bleak. Advertising continues to fail everyone. A small cluster of successful subscription newspapers now tower over everyone else, their long-term bet looking much better in hindsight, bolstered by being the leading brands of the pre-internet age. 

Very few in the industry dare imagine a thriving future, where revenues, paying customers, and profits are abundant and growing. Yet that’s the future I envisage.

Ball did make one point with which I entirely agree:

“Newspapers and magazines have been conceived as a package—a mix of the light and the heavy. Some stories cost far more to produce than others, but it balances out because you buy the whole thing.”

This is an essential point. The internet taught us that it’s necessary to break our newspapers apart, turn them back into “content,” and allow it to be exploited and exposed out of context all over the internet. But that is simply wrong. Not only does it rob the newspaper of most of the economic benefit of its content, but it robs the reader of the opportunity to form a relationship with a product and brand that, despite all of its content changing every day, remains consistent and reliable. 

Paywalls do the same thing. Subscription sites lock people out and demand commitment. Subscription denies the sort of casual access people are used to on the free internet, not to mention in shops and at newsstands. Even registration is a barrier, and the majority of people turn away. 

So what’s the alternative? If every user could read, and pay for, any publication from any publisher, not only would we find it easier to attract and profit from them, but the news media would discover that, collectively, they already have access to one of the biggest networks of users in existence. Who doesn’t read the news? Add in other media sectors, and the network covers everyone. 

Some publications are worth two dollars, some twenty centsand they should be able to charge what they’re worth. But that’s just the start: every click, every registration, every form to fill in is a hassle. Payment needs to be as casual as browsing.

If we can achieve that, the only thing left to fix is the product itself—the actual sites people visit. People have to like your product, want to come back, want to tell their friends. Investing in the product becomes easier knowing the return on that investment is in your own hands. If you’re setting the price, you can write the business plan.

Payment does not need to be synonymous with subscription. We do not need to attach words like “micropayment” to other options. Casual payments, a better term, can be as small or as big as makes sense to the publisher; all they have to do is make sure their product is worth paying for. 

It has been obvious to me for some time that, however challenging it might be to get started, nothing can change until someone creates the essential building blocks of a publisher-centric network with casual payments at its core. That has been my mission. 

I just ask two things. First, that publishers experiment, not expire. Second, a simple plea. Don’t call them micropayments.

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Dominic Young held a number of senior management and strategy positions at newspapers in the UK and USA. He has also initiated, led, and run a number of industry bodies and initiatives. He founded his new company, Axate, to address the conundrum and opportunity discussed in this article. @dominicyoung