I think this is just another "micropayment dream", and will not work ultimately. Internet just doesn't work this way.
The only thing I can imagine could save online newspapers is, that they will become better and better in quality, that will attract many visitors, and the website will survive by ads revenue.
IMHO the core problem is, that the World Wide Web was not created with the intention that it should provide business opportunities. It was mainly established for free exchange of information between scholars and scientists.
Later on, some people and companies discovered that Internet has monetization potential and so the .com companies emerged. Some were successful, other weren't. But nobody said every kind of business can survive on the Internet - WWW has it own principles, and if you don't play by it's rules, you might not survive. And, one of that core principles which lies in the very heart of WWW is that information is passed for free. I don't think any company has the power to change that.
I will be interested to see how they keep people from gaming the system.
Once you get someone to support your site the goal will be to get them to visit your site as many times as possible in a month. I think this will lead to increased sensationalism and gimmicks.
Also, visits are typically delimited by a period of inactivity (say, 30 minutes). I can think of several ways off the top of my head that publishers could manipulate that inactivity window to create additional visits (thus increasing their slice of the pie).
It is an interesting idea, but as always, the devil is in the details.
In general sites with a behavior of more repeat usage benefit more. For example I visit hacker news more than NYtimes or New York review of books. Hackers News updates every minute, new york review of book once a month or whatever...
Gaming this type of system is certainly possible, but I can identify a few factors that would limit this.
For one, no matter how large "their slice of the pie" is, the publishers won't make much if the user doesn't feel that the content is valuable. Thus, blogs and what not will still be encouraged to deliver quality content to truly increase earnings.
I agree, however, that basing payout on the number of visits to a "supported" site is flawed. I could see myself supporting a site, forgetting that I did so, and then end up paying much more than I had intended. No thanks.
This is basically the "pay what you like" monetization that Radiohead used - 60-65% paid nothing and the rest paid an average of $6 (30% of market price). Personally, I feel that this is not sustainable.
Newspaper monetization could be in the form of customized filtering. While many companies try to provide such a service, the quality isn't high enough that someone would pay from it.
30% of the price a consumer would have paid in the traditional model. In all probability even accounting for costs this represented a huge increase in profit per unit sold for the band itself.
I think your numbers sound about right. If you assume each user subscribes to 15 sites, that's 30c per site per month after transaction costs, so a special interest blog with a thousand visitors nets $1,080 a year. Semi-pro mommybloggers and the like get $20,000. BoingBoing at a couple of million unique impressions, $2.2 million.
That seems lower than one might hope for as a content producer but maybe higher than an average consumer might want to pay as per month - about the right number? It makes sense that as the market approaches perfect competition (no barriers to entry, no information inequalities, no transport costs) it gets pretty hard to make abnormal returns - supply just ramps up until there is less per head.
This could be a nice channel for incentivising content that doesn't work well with an advertising model, for example RSS feeds. It'll be interesting to see whether they can market this well enough though.
Kindle and its model fits into this discussion somehow. Where's the itunes of publishing? I know it sounds silly to pay for something you'll read only once, but perhaps if it was cheap enough and super convenient.
Many of us would pay for Hacker News - is that because of the variety of news sources, the discussion, the community?
Well, it's better than per-click micropayments. I think most people are willing to pay a set amount for news as a sort of utility as long as it goes to the outlets they choose and they don't have to evaluate the payment with each click.
From the newspaper's standpoint, they become mendicants, or worse... PBS or NPR. I don't think that will sit well with many in the industry, but faced with an inefficient, obsolete business model and eventual bankruptcy, the NPR-ization of all media just might be their only option.
Very interesting idea, but I don't think it will work on a commercial scale. It's based on gratitude and goodwill from consumers who are used to getting things for free. Many will pay and a few sites will make decent money, but the majority of people won't see anything in it for them, as they can get the content for free. Just like TipJoy (which I love), this seems geared more towards hobbyists than serious businesses. Hope I'm wrong.
Also, this is an especially hard sell with the economy the way it is.
> But I do believe that the patented model Kachingle represents can work...
Given the In re Bilski, anyone have any ideas about the status of this patent? My understanding was that process patents had to transform an article's state or be bound to specific hardware (but I'm not an IP specialist).
I like making detailed comments on here, ideally supported by a personal story, or a link to some science or history. But on this one - I just gotta write that my gut says "not gonna work". Now, there's been lots of gut feeling throughout history that something's "not gonna work" that did, in fact, work. But this one - I'm thinking not.
Two reasons off the top of my head: Where's the value in signing up for Kachingle? What do consumers get? Assuaging of guilt? If Kachingle negotiated so that every Kachingle publisher had Kach-only (or otherwise paid only) content, it could work as a giant "subscription fee to everything". But Kach would need a lot of traction to get heavyweights like the NYT to make some content only available to Kachingle users.
Second - privacy. I'm not Captain Uber Security online, but I don't want my credit card and favorite reading online linked. I've seen too many companies abuse user data to be excited about telling Kachingle/AMEX/whoever else exactly what I like reading and my interests are. Ultra-targeted demographic based advertisements all over the internet does not appeal to me.
I think this is overlooking something important. I would never pay for access to say, NYTimes.com or something.. because it doesn't give me what I want.
Data. Hard facts. I'd much prefer to pay to access something like AP's newswire, where I can get a lot more salient information without having it regurgitated by someone.
[+] [-] greyman|17 years ago|reply
The only thing I can imagine could save online newspapers is, that they will become better and better in quality, that will attract many visitors, and the website will survive by ads revenue.
IMHO the core problem is, that the World Wide Web was not created with the intention that it should provide business opportunities. It was mainly established for free exchange of information between scholars and scientists.
Later on, some people and companies discovered that Internet has monetization potential and so the .com companies emerged. Some were successful, other weren't. But nobody said every kind of business can survive on the Internet - WWW has it own principles, and if you don't play by it's rules, you might not survive. And, one of that core principles which lies in the very heart of WWW is that information is passed for free. I don't think any company has the power to change that.
[+] [-] jaxn|17 years ago|reply
Once you get someone to support your site the goal will be to get them to visit your site as many times as possible in a month. I think this will lead to increased sensationalism and gimmicks.
Also, visits are typically delimited by a period of inactivity (say, 30 minutes). I can think of several ways off the top of my head that publishers could manipulate that inactivity window to create additional visits (thus increasing their slice of the pie).
It is an interesting idea, but as always, the devil is in the details.
[+] [-] gustaf|17 years ago|reply
[+] [-] ABrandt|17 years ago|reply
For one, no matter how large "their slice of the pie" is, the publishers won't make much if the user doesn't feel that the content is valuable. Thus, blogs and what not will still be encouraged to deliver quality content to truly increase earnings.
I agree, however, that basing payout on the number of visits to a "supported" site is flawed. I could see myself supporting a site, forgetting that I did so, and then end up paying much more than I had intended. No thanks.
[+] [-] ieatpaste|17 years ago|reply
Newspaper monetization could be in the form of customized filtering. While many companies try to provide such a service, the quality isn't high enough that someone would pay from it.
[+] [-] nfg|17 years ago|reply
30% of the price a consumer would have paid in the traditional model. In all probability even accounting for costs this represented a huge increase in profit per unit sold for the band itself.
[+] [-] dcx|17 years ago|reply
That seems lower than one might hope for as a content producer but maybe higher than an average consumer might want to pay as per month - about the right number? It makes sense that as the market approaches perfect competition (no barriers to entry, no information inequalities, no transport costs) it gets pretty hard to make abnormal returns - supply just ramps up until there is less per head.
This could be a nice channel for incentivising content that doesn't work well with an advertising model, for example RSS feeds. It'll be interesting to see whether they can market this well enough though.
[+] [-] brand|17 years ago|reply
[+] [-] antidaily|17 years ago|reply
Many of us would pay for Hacker News - is that because of the variety of news sources, the discussion, the community?
[+] [-] jay_kyburz|17 years ago|reply
The newspapers are just going to do the obvious, they will have free and premium content with a monthly subscription.
The big media companies like Fairfax will bundle all kinds of premium content under one subscription. I guess it will be like a pay tv model.
[+] [-] AndrewO|17 years ago|reply
From the newspaper's standpoint, they become mendicants, or worse... PBS or NPR. I don't think that will sit well with many in the industry, but faced with an inefficient, obsolete business model and eventual bankruptcy, the NPR-ization of all media just might be their only option.
[+] [-] ryanwaggoner|17 years ago|reply
Also, this is an especially hard sell with the economy the way it is.
[+] [-] AndrewO|17 years ago|reply
Given the In re Bilski, anyone have any ideas about the status of this patent? My understanding was that process patents had to transform an article's state or be bound to specific hardware (but I'm not an IP specialist).
[+] [-] Spyckie|17 years ago|reply
[+] [-] lionhearted|17 years ago|reply
Two reasons off the top of my head: Where's the value in signing up for Kachingle? What do consumers get? Assuaging of guilt? If Kachingle negotiated so that every Kachingle publisher had Kach-only (or otherwise paid only) content, it could work as a giant "subscription fee to everything". But Kach would need a lot of traction to get heavyweights like the NYT to make some content only available to Kachingle users.
Second - privacy. I'm not Captain Uber Security online, but I don't want my credit card and favorite reading online linked. I've seen too many companies abuse user data to be excited about telling Kachingle/AMEX/whoever else exactly what I like reading and my interests are. Ultra-targeted demographic based advertisements all over the internet does not appeal to me.
[+] [-] ajkirwin|17 years ago|reply
Data. Hard facts. I'd much prefer to pay to access something like AP's newswire, where I can get a lot more salient information without having it regurgitated by someone.