Walter Isaacson, writing this month’s Time cover story, hopes that 2009 will see the dawn of ‘a bold, old idea’ for funding newspapers online. Micropayments. It is an old idea, it’s true. Clay Shirky made the case against micropayments back in 2000, and Andrew Odlyzkow in 2003. Isaacson makes the point that Apple have made a success of a micropayment system through iTunes:
Steve Jobs got music consumers (of all people) comfortable with the concept of paying 99 cents for a tune instead of Napsterizing an entire industry
and neatly elides the point that illegal (free) downloading far outstrips any kind of legal, micropayment driven download service. Making the point that iTunes makes money from micropayments; ergo, newspapers should charge per article ignores the fact that music isn’t one kind of orange, and newspaper content just another kind of, slightly cheaper, orange. While, say, the work of star columnists might be comparable to music – as in, something a consumer will seek out, and consequently might be willing to pay for – the constantly shifting product of news desks is not something people will seek out, and pay to keep. That 99 cent for an iTunes track is a payment for something you can listen to again and again. A news story isn’t something you rediscover when your ipod’s on shuffle six months down the line. Paying half a cent for it is half a cent too much, and not only because of its built in redundancy.
…users want predictable and simple pricing. Micropayments waste the users’ mental effort in order to conserve cheap resources, by creating many tiny, unpredictable transactions. Micropayments create in the mind of the user both anxiety and confusion, characteristics that users have not heretofore been known to actively seek out.
The very micro-ness of micropayments makes them confusing. At the very least, users will be persistently puzzled over the conflicting messages of “This is worth so much you have to decide whether to buy it or not” and “This is worth so little that it has virtually no cost to you.”
Embedding the cost into hyper-linking, a simple way to enact a micropayments system, something the W3C considered as a good way to make the system as simple as possible, would, almost certainly, be off-putting for most users (because of the anxiety and confusion generated – ‘How much am I paying for this? What is it? Do I really need to follow this link if it’s going to cost me?’), and would seriously undermine the linked-in nature of the best web journalism.
Apart from this, as Shirky says, ‘Users hate them’. Odlyzko cites Elsevier’s experiments with pay-per-article in the 1990s as an example of why micropayments don’t work:
Even small barriers, such as having to pay for for individual pages, act as a severe deterrent to usage. During the mid- to late-1990s, several scholarly publishers experimented with a variety of payment schemes for science, technology, and medical information through the PEAK system. The conclusion that the main publisher in the experiment, Elsevier, drew, was very clear: [Elsevier’s] goal is to give people access to as much information as possible on a flat fee, unlimited use basis. [Elsevier’s] experience has been that as soon as the usage is metered on a per-article basis, there is an inhibition on use or a concern about exceeding some budget allocation.
Online subscription to newspaper sites hasn’t worked in the past, Isaacson concedes, but in arguing for the micropayment alternative he inadvertently advocates subscriptions:
I don’t think that subscriptions will solve everything — nor should they be the only way to charge for content. A person who wants one day’s edition of a newspaper or is enticed by a link to an interesting article is rarely going to go through the cost and hassle of signing up for a subscription under today’s clunky payment systems. The key to attracting online revenue, I think, is to come up with an iTunes-easy method of micropayment.
Under a micropayment system, a newspaper might decide to charge a nickel for an article or a dime for that day’s full edition or $2 for a month’s worth of Web access.
$2 for a month’s access is a subscription – just because it’s a small sum doesn’t make it a micropayment.
Offering a warming homespun tale of the writer’s childhood ‘in the bayous of Louisiana’ doesn’t cut it much as an argument:
When I used to go fishing in the bayous of Louisiana as a boy, my friend Thomas would sometimes steal ice from those machines outside gas stations. He had the theory that ice should be free. We didn’t reflect much on who would make the ice if it were free, but fortunately we grew out of that phase. Likewise, those who believe that all content should be free should reflect on who will open bureaus in Baghdad or be able to fly off as freelancers to report in Rwanda under such a system.
And not simply because ice and news are, well, nothing like each other. At all. In any way. It’s a stupid point to make because it’s so laboured it suggests Isaacson is trying to lyric his way out of confronting some real questions; questions I assume he has no answer for. First, how much cheaper is it to produce news online than in print? Did the cover price traditionally cover the costs of paper, ink, printing presses, delivery trucks, and so on, with advertising paying the editorial wages? Did it cover most of the production costs or just a few? What kind of operating profits are acceptable to newspaper proprietors and corporations: in other words, at what point do they decide it’s just not worth the hassle, and close the whole thing down? Are bureaux in Baghdad being closed because there’s really no money there to support them, or because their continued existence would bite into executive bonuses? Are they closing down because a freelance stringer and a just off the plane journalist can do the job just as well, but at a fraction of the cost? I don’t have the answers to these questions either, but I’m not writing a Time cover story. And I am at least looking for them.
There’s far too much hand-wringing about the glorious traditions of journalism being undermined by the free content model. This kind of watery homily is not an adequate response to the changing world of news and newspapers:
I say this, too, because I love journalism. I think it is valuable and should be valued by its consumers. Charging for content forces discipline on journalists: they must produce things that people actually value. I suspect we will find that this necessity is actually liberating. The need to be valued by readers — serving them first and foremost rather than relying solely on advertising revenue — will allow the media once again to set their compass true to what journalism should always be about.
It sounds nice, doesn’t it, but what does it mean? Sod all, really. Perhaps that’s part of the problem: the reason I wouldn’t be willing to pay for an article like Isaacson’s, and the reason I’d be annoyed if I was lured into payment by an eye-catching headline, is because..well, it’s not very good, is it.