Thoughts on how to monetize online content
I have a good friend in the news business and he is often talking about how or the inability of newspapers to monetize their contents. Here are my ramblings on how I think this could be done.
Meet the Suica Card
Tokyo transit is made of a mishmash of private companies providing train, subway, bus, trolley and a bunch of other services. When taking a subway from one destination to another you will most likely use more than 1 company to get there. Prior to the Suica it was a real hassle to pay: you had to plan your route in advance, have cash with you and wait in lines to purchase tickets.
Suica changed all this with a common payment platform. It’s a prepaid card that you touch at the entrance and exit of any transit system and it automatically calculates which company gets what and deducts the price from your card. You can jump on any combination of train, bus, bullet train, taxi, or trolley and it always works. I never wait in a line, never worry about having change in my pocket, and don’t really even think about how much it costs. I just know I need to fill it up when it gets a bit low which I can do at easily at numerous locations. I use Tokyo transit more.
Suica is also available in different digital formats. In the picture above, it has been integrated into digital phones so you don’t even need a card.
How this could be introduced to the Internet
Probably doesn’t need much imagination to see how to implement this on the Internet, but I’ll jot down how I could imagine this going…
Start with a few big guys
You set up a payment platform and get a few big guys to join, say the NY Times, the Washington Post and a few other nice big media outlets: you’ll need some critical mass and visibility in the beginning. I’m not a lawyer, but I couldn’t imagine any legal issues with this related to any anti-trust laws: the price is not fixed, just a payment platform is provided.
A great deal of customization should be provided over how their customers pay. Weekly, by page, after customers have viewed x pages/day or week, and so on. Media outlets could make their contents freely available except to the heaviest users or could lock it up tight. They could charge a little or a lot. It’s up to them. In general, though, it should probably feel nominal and under the financial radar of most users.
Then open it up to all content/application providers as a alternative to ad-based contents
Allow anyone that wants to join, join. You think your blog is valuable? You got an amazing web application that people use but you don’t have an good way to monetize? You would now have an easy way to charge readers $.01 per page view or whatever you think it’s worth.
That the de facto monetization for Internet content is ads is ridiculous. Sometimes there is not a related product or advertiser that matches every page that readers want to read. Sometimes authors feel that they do not want to push ads at their readers but their contents are valuable in and of themselves. And why should authors (or a middleman) have to find sponsors for everything they produce when the contents themselves have intrinsic value anyway? Why should Google or any other advertising middleman tell a content provider the value of their page view? Of course the ad-driven revenue model can exist along with or in parallel to the paid model; however, it should be an option, not the only way.
How to pay
Obviously, I’m not suggesting that payment be made with a physical Suica-like card! Just that there should be a common platform open to all content providers that would make it easy for users to get on and off paid websites with no hassle for paying. Prepaid or postpaid would both work: credit card, added to your phone bill, a prepaid card you buy at the convenience store, etc. Apple already does this to some extent with iTunes, offering credit card accounts, prepaid cards, and gift certificates.
Suica beats subscription
The Internet is a mishmash of millions of content providers. Subscription doesn’t really make sense in this environment. Just like I don’t want to subscribe to just the JR and Kintetsu subway line when I don’t know which of the many different transportation vendors I will use each month, I don’t want to pick just a few websites to subscribe to, when I don’t know in advance what routes I want to travel on the net.
Implementation
For vendors, It will probably be something as easy as adding meta tag in your code and configuring preferences with the payment platform provider(s). For clients, I imagine the best solution would be something built into the browser that is visible but unobtrusive to show you if a site is free, you are using a free trial, but it is a paid site, or you are being charged. Settings should probably allow you to not require confirmation for sites that cost < $X. I believe most people don’t mind paying for quality contents, they just don’t want to be bothered much by the inconvenience of the payment process itself.
It is a brighter, not darker world
Like everyone else, I like quality contents. I want more people and organizations to write more great stuff, produce amazing applications and get paid for their ideas and contributions. Just like payment platform of iTunes App Store spurs the production of quality iPhone apps, a payment platform for content providers will spur the development of quality contents.
A corollary: make payment Marxist
Why charge someone from Belize the same as someone from Berkley? Cost of distributing contents is basically free so it should be accessible as much as possible and adjusted to ability to pay. For example, the content provider could say their contents are free for public institutions such as libraries and schools and for countries under a certain threshold. If possible, even adjust the price on an individual level on the ability to pay, much like riding the train costs less for passengers with lower incomes. It’s fairer and will make more money for the content provider in the end as well. However, like everything I’m suggesting here, it should be up to the content provider to make these decisions.
