Newspaper Vending Machines 2.0

The revenue struggles of traditional media have been reported and reported and reported. The fact is, in an online, on-demand world, free seems to be the consensus price for content on the web. And while I’m no economist, I’m guessing it’s hard to keep charging nothing for quality content as bandwidth and reporting costs keep rising.

So free isn’t going to work if we want a stream of quality, professional content to keep flowing. What about almost free? The next big idea in web content monetization is micropayments, and this week I’ve been looking at two sites that are banking on the idea really catching on.

Tipjoy‘s and Contenture‘s purposes and functionalities are different, but both sites are experimenting with ways to bring easy micropayments to the masses.

An iTunes for everything

From the Contenture site:

You pay a small monthly fee to support the sites you visit the most. Your payment is automatically divided amongst all the Contenture sites you visit, based on how many times you visit each month.

The monthly fee can be as low as $0.99/month. Contenture also enables sites that use the functionality to set up ad-suppression and premium content areas for Contenture users.

It’s an intriguing model but heavily reliant on the participation of sites with extremely valuable content that can offer paying Contenture users a little bit more than the average consumer. I think Contenture’s model comes close, but just misses the mark.

Subscriptions are difficult in this space. Free was the preferred payment structure for mp3s for awhile. Of course, when it turned out that that’s kind of illegal, iTunes came along and made digital music simple to buy — $1 per song — and it has been wildly popular. This model could potentially work for online news articles.

I think Contenture would better serve sites by functioning as a sort of online news article vending machine. You could pay into Contenture as you do with iTunes, then spend that money on individual articles on Contenture-enabled sites. The individual costs would have to be determined by the site, based on volume and overhead, but paying only for the content consumed is much more palatable to me.

As mainstream media outlets consider models for selling their content online, micropayments are a much more viable way to charge for the very best content.

Every little bit helps

Tipjoy is taking a more worldly approach to micropayments. From their site:

Tipjoy is a simple, social payments service which makes it easy for people to earn money from and give money to great people, causes and content.

In essence, Tipjoy enables anyone to make a payment to anyone else who has a website or Twitter account. All I need to do is add money to my Tipjoy account and tell them where to send it.

I think the possibilities for this are great. Social media were major communication channels in the 2008 presidential election, and Republican candidate Ron Paul set an online fundraising record for donations in one day on November 5, 2007, largely built up of small donations from legions of internet fans. Tipjoy makes this even easier to accomplish (provided that candidates follow campaign finance rules).

For charities with few resources to set up payment providers, Tipjoy delivers an easier avenue to connect them with potential donations. Tipjoy’s homepage displays a current stream of recent donations on Twitter.

Right now, Tipjoy is focused on integrating their functionality with Twitter. And while this limits them to the available traffic of that particular channel, I envision people incorporating Tipjoy’s API into a variety of apps across the social media sphere to easily enable small payments in return for quality content (think shareware).

Micropayment in Experimentation. Will it go mainstream?

Both Tipjoy and Contenture are in the Experimentation phase of their New Media Life Cycles. They are both primarily focused on refining their own functionality and letting the users determine how it works best. For them to grow into Adoption and beyond, each will face unique challenges.

Contenture will have to ensure that their functionality is used on popular sites generating unique content that can’t be found anywhere else for free. The Wall Street Journal is unique among the mainstream media in that they still don’t give away 100% of their content for free on the web. And it was announced in May that they would launch a “sophisticated micropayments service” in the fall. If similar media outlets were to employ Contenture’s services, that would further refine the functionality and could lead the channel through Escalation into full Monetization.

Tipjoy is more focused on enabling charities and non-profits who are already engaged in the social media space to receive donations from users. But by encouraging integration in other apps, APIs, and sites, they’re positioning themselves as a person-to-person PayPal.

It’s easy to picture a time in the near future when Contenture and Tipjoy widgets start appearing on sites that promote affordable, engaging content if you just “drop a quarter in the slot.”

The takeaway

It’s very early to tell if micropayment will take off as a successful method for web content monetization. However, we’re definitely seeing flashes of possibility in Contenture and Tipjoy. The unavoidable fact is that users won’t pay for content unless they cannot get it anywhere else. These channels will need to engage with sites providing the best content.

The upside to this is that sites now trying to monetize their content have easy avenues for adding this functionality, along with a channel to help promote what they do. We will continue to monitor the way sites are monetizing and how Contenture and Tipjoy are empowering them to do so.

My question to you

Would you be willing to pay for individual news articles if the price was right? What is that price?

About the author

Brad Schwarzenbach -

As an analyst on the Tippingpoint Strategy team, Brad explores new opportunities for clients to build relationships with their customers. He’s always testing new social media channels, poring over analytic data, and identifying emerging trends. He also speaks at conferences & events about uncovering powerful messages hidden within brands' unique values.

Brad’s research has contributed to the development of content & contributor strategies for such clients as Breville, Rodale, Long’s Jewelers, and Fusionapps, as well as being a frequent contributor to the Tippingpoint blog. He’s been “listening” to the way we communicate online since the old AOL People Connection days and watched the way that digital communication has evolved.

An English and Creative Writing major at the University of Connecticut, Brad’s spent most of his career creating web content and becoming intimately familiar with web theory for Bayard, Inc. and TomTom Inc., giving Brad keen ears and eyes to what, exactly, makes web content valuable.

Outside the office, Brad feels most at home with his beautiful wife-to-be Kristina, or on the golf course. “There’s a distinct pace and rhythm to the way people communicate online.  Understanding and taking part in them yields amazing opportunities for my clients to not only grow but to improve their business. I’m constantly looking for those opportunities.”