Last week I discussed the interesting economics underlying a social nanopayment service like flattr. And I offered the gift economypessimists (me included) some food for thought: the widespreadfear that such approaches could still fail to draw in enough of the read-only audience (instead of drawing in just the writers themselves) could eventually be tackled by a critical mass of very cost-intensive sites requiring their users to register with flattr.com before being allowed to view the content.
But even if I myself liked this theoretical thought, in the real world it would leave us with a kind of chicken-egg problem: the first chickens who decide to move in such a direction (restricting access) could experience even worse problems to get a daily egg laid (and generate some income). But does the real world provide us just with white and dark eggs? All or nothing?
Restricting access is still more of the same all or nothing, black and white thinking, isn’t it? What if we don’t think in terms of restricting but instead more in terms of attracting? If the fear that many people will in the long run not have enough incentives to share a small amount of their money turns out to be correct, we should consider to give them some more incentives, shouldn’t we?
The world of such incentives for paying users is already well explored in the field of software development: give away most of your software package for free but provide some really nice additional features for a paying audience. So why not consider similar things in order to give people a better reason to register with a service like flattr? E.g. let just users with a flattr account watch … the result of your latest user poll he or she just participated in? Well, why not. Or: let just users with a flattr account watch … the video embedded in your text and you are referring to? Maybe too harsh. Or: let just users with a flattr account watch … all comments to a text instead of just the ones older than 24 hours? Mmh, interesting. But there are probably much better ways.
Once flattr releases a (hopefully smart and capable) programming interface, the only limit to such things will be your sites content and your fantasy to take advantage of it. And you are requiring nobody to actually “pay” for anything on your site. You just suggest that a basic readiness to pay a little bit for the valued things would also give access to some additional benefits on your site.
The smarter such incentives and the more sites offering some well-balanced benefits the more readers who were not willing to pay before would then be willing to make a basic commitment by registering with a social payment service: just one flat fee a month for the ever growing amount of such benefits, globally? Bought.
And speaking about readers and writers: who is just consumer, reader and who is also contributor, author in the twenty-first century? Aren’t we heading more and more in the direction of a read-write culture anyway? Everybody who publishes a video on YouTube is an author? Fur sure. Everybody who shares his or her knowledge by contributing to Wikipedia is an author? As sure as eggs is eggs. Everybody who twitters valueable links on some special interest topic is an author? I believe, yes. And everybody who shares his or her valuable insights into upbringing children in an online community dedicated on the topic is an author? Of course. So why not having the option to flattr all those things in the future? One could easily find oneself having the flattr fee financed for lifetime after having published some boring afternoon video like this one with almost 400.000 views.
And if flattr one day also becomes a kind of a personal “transparency check” to measure whether you yourself on average actually “contribute more” or “consume more” in the internet, you can choose to either balance this with some dollars or choose to take time to write some more of your maybe already “famous” product reviews on amazon.com and let users flattr them…!
So. Just something (almost) completely different left to be said: after my last post, I got some free beta invite codes from flattr. And I still have some of them. Anybody needs one? (And no, I am not affiliated with flattr at all. )
Yep, I have a new facebook page (it’s now almost as old-fashioned as blogging, so I think it’s really cool!), and I decided to blog in english – from time to time, don’t worry. And sorry, I meant broken english, of course: with close to two billion speakers the most important living world language. Sorry, dear native speakers, but you know your language is just similar to the worlds preferred language, yeah, you really know that well!
When speaking with content creating folks nowadays, especially newspaper people, online journalists, doesn’t matter, they will often draw a quite dark picture of their own future. And I can understand them: in their “good old” days pre-internet they had a very clear, established and working business model: a. write some stories people like to read, b. sell some space for product pictures you put in between the stories and c. sell everything another time to your readers: paper in exchange for hard cash you can make a living from.
But nowadays, online? If you dare to put ugly pictures in between the interesting parts of your content, people will just remove them with ad blockers – bringing down your ad prices by doing that. And if you even dare to ask your readers to pay(!) for being allowed to access your content, then chances are high that most of them will disappear – immediately. After all, they can get the news somewhere else for free, right? Now add two more years and they will probably even stop to read you when randomly browsing papers in their preferred café. After all, your content doesn’t seem to be relevant anyway. It’s not online, right?
Now imagine you’re a journalist, compare past and present, and very soon you will be in the mood to ask yourself: is this the end of the world?
The simple question is: why is it, that the publisher’s established business model more and more stops to generate cost-coverage and income? What exactly is different “online”? Why are people not “willing” to pay anymore for what they always were willing to pay before? When asking such questions we often hear about “cultur changes”, in the internet literally everything just “has to be” for free. Experienced publishers suspect especially “young people”: they don’t know the pre-internet era anymore, so for them just “everything always was for free”! They probably “unlearned” to pay! Or actually never learned it.
Well. I really try to take almost every argument seriously, but something feels very wrong here. But it sounds seductive that it seems to be possible to simply “unlearn” to pay. I would like to (un)learn that, too!
Others argue that “as long as many publishers, authors, bloggers are willing to give their content away for free, there is no need for people to pay”. Well, in my mind there is some truth in that explanation, but it still falls short to answer the real question: why are they willing to give away their content for free? Most of the time it’s expensive to produce it, and surely journalists have to feed their families, too. Furthermore: why don’t I get my daily grocery purchase for free, too? Even though I desperately try to “unlearn to pay”!
A simple-minded answer is sometimes the closest approximation to truth: at the moment, creators don’t have any other choice than to give away their content for free. Since the late 1990ies everybody just has to be “in the internet” mainly in order to stay connected to rapid technical and social development and to continue to “exist” on the radar. However, when trying to demand from readers to pay, content creators often have to conclude: “It does not work”.
Let’s sort that out: people pay for “value”, totally subjective value of course. But if you as a publisher, journalist or top blogger think the content is on average just as valuable as it used to be before the internet, I have to slow you down a little: it is and it is not at the same time! It is as valuable as before, because it costs almost as much as before to produce it and it provides a similar total value to all its readers. But it is not as valuable as before from an individual reader’s perspective. Let’s try to explain this from the “consumer’s”, the reader’s perspective:
my parents spent a certain amount of money per month on newspapers, I think a daily one and a weekly one. But for me, everything is on my fingertips, so I don’t read just two news sites, I read them all – in all the languages I understand. I hop from one link to the other, follow the things my friends and interesting people on Facebook and Twitter recommend me, read some bloggers in between. And since recently I get those articles even nicely prepared in personalised news”paper” services like paper.li. Even my parents would be fond of that, if they knew it. Of course, I do not have much more spare time for reading than my parents had, but I never know in advance which sites will grab my attention today.”
“Mmh, slowly,
I already do understand since a longer time that it would be completely senseless to restrict the access to my content again and ask you, coming along once a month, maybe even just once a year to specifically pay for my articles… if I’d do that I’d probably just loose the growing number of readers like you, who share their limited attention between an ever growing number of offers… of course some of my really faithful readers would probably be willing to pay… but they are not enough anymore to cover my expenses and their number probably becomes even less in the coming years…”
“I can tell you: I would definitely not pay.
And now that I think about it: it’s probably not just because I am not willing to pay at all. I can proove that I am willing to pay for the internet as a whole, cause I already do it. I pay for the internet access, at home and even mobile. But I cannot pay let’s say a dollar for several hundreds sites I maybe come across. Furthermore, as I already mentioned: I don’t know in advance, where I will end up today. And that would also be my problem if you’d try to charge me ‘per view’. Because coming across a “pay-per-view” offer does not just really suck, I’d also need to know in advance, whether the content I pay for will be worth it! I don’t like that and therefore I prefer not to look at it at all.”
“Right…
I can understand that just the whole thing is really worth something for you. What you know in advance is that you will definitely use the whole thing, but you don’t know which parts. You know what: after having listened to your enthusiasm about all those possibilities, I actually think that the overall offer of the internet as a whole thing is very valuable to you when being compared to what you are at the moment asked to pay for it… I understand you probably don’t like this idea, but I also think in economical terms and I think I just discovered a kind of “reason” why the internet is growing so tremendously fast… your added value is just exceeding your access fee by far… and I just want to cover my costs and my fair share. After all, I provide part of the value the internet represents for you!”
After having listened to this fictitious – in fact unrealistically harmonic conversation, we can now sum up the changed economic environment for, well, not the whole authoring and blogging scene, but wide parts of it:
Some specific online offer is worth much less than before for an individual reader, mainly because s/he “consumes less” per offer and shares time and attention between many such offers.
At the same time much more such arbitrary readers can come across a single offer, when compared to the pre-internet era (provided it attracts attention at all, of course).
The reason why neither “flat” nor “pay-per-view” fees “work” is that most of the consumer value is not anymore provided by some specific offers themselves but more and more by the sum of all interconnected offers as a whole.
Even very small fees do not fit into this new network pattern with which consumer value is provided, because consumers cannot know in advance which exact parts of the whole will be interesting or even worth paying for it.
The Internet publishing world is flat, because a new business model would need to charge for the thing that provides the value (just “the sum” of all offers provides most of the value) and later distribute that income between all offers in a fair manner in line with the value a single offer added to “the sum”.
And that’s exactly what a service like flattr.com in my mind gets fundamentally right, a potentially working business model within a changed environment: a. charge readers a flat fee “for everything” per month, b. while they are browsing let them decide by hindsight for what exactly they like to pay, c. share the flat fee between all the offers the readers came across and that turned out to be valuable to them.
flattr.com founder Peter Sunde answering the questions how to make money with digital content (via zeit.de)
Kind of downside for many: users who are not willing to make a donation will continue to read and go away. But before coming back to the question whether this downside really exists, let’s shortly detour to Apple’s iPad and similar devices and ask whether they change the landscape and provide some hope for starving authors.
Especially after the presentation of Apples iPad in January 2010, one could hear rising expressions of hope that such more “closed” devices could provide new possibilities to charge for expensively created content. Well, I am skeptic about that expectation.
Such devices do neither reverse the changed consumer expectation to be able to “hop around all the internet” nor do they change the fundamental possibilities for content creators to charge. The challenge, a changed environment poses for authors and journalists were never about technical obstacles for charging: subscription based pay wallstechnically work. Pay-per-view like charging models also technically work. Technically you already can charge for your digital content, no miracles provided here by new mobile devices or platforms. But from an economic perspective, you can in most of the cases not charge anymore for your content alone. Your consumers won’t see their value. Maybe they don’t want to read your content for the coming three months?
They dunno. What they know is that they want to share the things they like with their friends. Their economical value is destroyed, if everybody ends up with subscriptions of different news services. Cause that would feel like it felt to read a newspaper in the 20th century, wouldn’t it? They won’t buy it from you anymore.
Among some other valid points of criticism against the current flattr.com model of social payment there is the argument that it just redistributes money within the community of authors, journalists and bloggers. In my mind this argument is strongly connected to the fact that it is constructed as an experiment to validate whether the likeable idea of a gift economy works: nobody is required to signup to flattr.com in order to be able to access some content. As a consequence it is argued that mainly people strongly sympathising with the authoring community, people themselves experiencing the serious troubles of generating enough income for very good, regularly read and appreciated content, will participate in the system. As a further consequence, the system would not bring in additional money from readers, but just redistribute money inside the community of authors themselves, in effect taking away money from small offerings and transfering it to bigger ones.
Well, together with the Financial Times we should wait patiently and watch whether the flattr “gift economy” experiment will draw in more people than expected by many and whether other “really big” social buttons as the facebook “Like” will be enhanced with similar social nano payment functions…
But the question I ask myself is whether the business model suggested by flattr.com actually is restricted to a “gift economy” based on thankfulness.
Imagine for a moment a flattr or similar system that has grown really big. “Big” in the sense of sites offering the button to their users. Flattr could then take everything a step forward and give participating sites the option to restrict access to their sites to flattr.com account holders. If a big enough part of the valuable internet affiliated into a shared, single sign on kind of “intranet” accessible only to flattr account holders, the “gift economy” experiment would turn into a straightforward old fashioned “trade economy”: paying such a flat fee of some dollars per month would become a prerequisite to access a critical mass of interesting sites, one flat fee would give you access to all of them, globally. After having logged into this global “intranet” a single time, everything would look and feel as before.
Don’t get me wrong: users would still decide themselves where their money actually goes: by “flattering” valued content with the click of a button. Yes, “access” to the sites deciding to do it would be restricted, but this restriction would be just loosely coupled with the payments the users initiate for explicitely valued content. Many other sites deciding not to restrict access would continue to offer the same flattr button and could then also profit from a system that does not just redistribute money among authors anymore but really draws in additional money of readers.
I certainly know that many of my readers will probably not “like” such a scenario at all. They would not click any flattr button for such a suggestion! I do not even know whether I like it myself. Is this due to the fact that my generation “unlearned to pay”? However, beside that you don’t like it I would really like to know the (technical, economical, social) challenges you see in such a scenario. I do know that it will remain fascinating to watch where the discussed challenges will actually lead us. And what’s for sure: this story is not yet finished at all.
Update 2pm: I was forced to put a flattr button on my page, world domination is near. Joking aside, Eileen from flattr.com just sent me lots of fresh invite codes, so I just “had to” put such a button on my site here and now I am sitting magnetised in front of my computer and await what’s happening. I think I should keep my expectations low, but if you want to give me a thrill: just push the flattr button!-) And if you need a flattr beta invite code: follow me and ping me, I’ll send you one with a direct message!
Politik, Kultur, Wirtschaft, Medien, Netz, Wissenschaft. Geistig erstarrte Bastionen begegnen uns fast überall, nicht zuletzt auch in uns selbst. Wir müssen sie daher immer wieder neu erstürmen...
The world of such incentives for paying users is already well explored in the field of software development: give away most of your software package for free but provide some really nice additional features for a paying audience. So why not consider similar things in order to give people a better reason to register with a service like flattr? E.g. let just users with a flattr account watch … the result of your latest user poll he or she just participated in? Well, why not. Or: let just users with a flattr account watch … the video embedded in your text and you are referring to? Maybe too harsh. Or: let just users with a flattr account watch … all comments to a text instead of just the ones older than 24 hours? Mmh, interesting. But there are probably much better ways.
And speaking about readers and writers: who is just consumer, reader and who is also contributor, author in the twenty-first century? Aren’t we heading more and more in the direction of a read-write culture anyway? Everybody who publishes a video on YouTube is an author? Fur sure. Everybody who shares his or her knowledge by contributing to Wikipedia is an author? As sure as eggs is eggs. Everybody who twitters valueable links on some special interest topic is an author? I believe, yes. And everybody who shares his or her valuable insights into upbringing children in an online community dedicated on the topic is an author? Of course. So why not having the option to flattr all those things in the future? One could easily find oneself having the flattr fee financed for lifetime after having published some boring afternoon video like this one with almost 400.000 views. 
)
my parents spent a certain amount of money per month on newspapers, I think a daily one and a weekly one. But for me, everything is on my fingertips, so I don’t read just two news sites, I read them all – in all the languages I understand. I hop from one link to the other, follow the things my friends and interesting people on Facebook and Twitter recommend me, read some bloggers in between. And since recently I get those articles even nicely prepared in personalised news”paper” services like 
I already do understand since a longer time that it would be completely senseless to restrict the access to my content again and ask you, coming along once a month, maybe even just once a year to specifically pay for my articles… if I’d do that I’d probably just loose the growing number of readers like you, who share their limited attention between an ever growing number of offers… of course some of my really faithful readers would probably be willing to pay… but they are not enough anymore to cover my expenses and their number probably becomes even less in the coming years…”
Especially after the presentation of Apples iPad in January 2010, one could hear rising expressions of hope that such more “closed” devices could provide new possibilities to charge for expensively created content. Well, I am skeptic about that expectation. 
Among some other valid points of 
