Micropayment platforms that allow people to buy individual news stories for 10, 20, or 50 cents are finally reaching the mainstream after about 20 years of development hell.
Blendle and Winnipeg Free Press offer two successful micropayment systems that might prove the model works.
Both are effective in terms of delivery, but more importantly, they’ve found the right markets and the right zeitgeist to turn a long-time vision into a profitable reality.
Blendle, a Dutch app often called “the iTunes of news,” has wooed more than half a million users since launching in 2014, making it the current benchmark.
Users put money on their accounts and use it to buy stories from a variety of established publications for about 20 cents each. The idea is to “blend” articles to create a personalized newspaper or magazine.
Blendle looks like it’s here to stay and grow. The company has promised to enter the US. sometime in 2016, where it will apparently stock articles from The New York Times, The Washington Post, and other established American newspapers.
Blendle’s entry into the US will be a crunch moment for micropayments.
The Netherlands, Germany, and Belgium, which make up Blendle’s main market, have a combined population of barely 100 million, but also boast four languages and far more localized news issues than the US.
Blendle originally offered articles from 56 European publications, which would barely register in America’s saturated media landscape, but immediately gave it a presence in Europe’s highly localized news market.
A focus on smaller markets is a key link between Blendle and Winnipeg Free Press, another micropayment success story.
The print edition of the Winnipeg Free Press has been published consistently since 1872 and continues to print six days a week. Its hometown, the capital of the Canadian province of Manitoba, has a population of about 700,000.
The publication launched a bespoke micropayment system in July 2015 and by December had exceeded its revenue and readership goals.
It’s notable that these two successful micropayment platforms both started with a manageable, localized market. It’s not the whole story, but it could be a lesson for developers who think they’ll immediately sweep through a saturated market like the US or the UK.
Another link between Blendle and Winnipeg Free Press is their relative youth. It’s not just about learning from previous mistakes, but riding the current wave of interest in micropayment platforms.
The concept of micropayments for news emerged in the 1990s, but when the impact of Internet publishing became clear, the hastily accepted wisdom was that paywall models were the future, not micropayments.
The cycle seems to have turned, with a number of publishers turning away from paywall models. News publishers are searching for a new commercial model and they might see it in the current wave of micropayment platforms.
Micropayments allow news consumers to “impulse buy” an individual story without signing up for a yearly subscription.
When printed newspapers dominated, consumers might have paid $2 for one day’s newspaper just because they were particularly interested in the news that day.
Subscriptions force consumers to pay more upfront. They also demand that consumers commit to a publication. Not many consumers can afford to juggle multiple subscriptions that might cost thousands of dollars in total.
Enthusiasm doesn’t mean success for micropayment platforms
In terms of delivery, one link between Blendle and Winnipeg Free Press is the offer of refunds for individual articles.
This feature is clearly a tool to reassure consumers who might be skeptical. (Winnipeg Free Press also allows users to choose a traditional subscription rather than micropayments.)
But it also appeals to consumers’ willingness to pay for news. It assumes that users won’t ask for a refund on everything and therefore pay nothing.
The success of micro-donation platforms such as Flattr and Tipsy shows that news consumers can be altruistic. One German news website reportedly made more than EUR6000 from Flattr in 2014.
Like Flattr and Tipsy, Blendle and the Winnipeg Free Press are the result of a belief that consumers will pay for news in the right circumstances. Unlike so many failed micropayment startups, however, they’ve tempered this optimism with commercial caution.
Blendle didn’t go live until it had 56 publications signed on. Winnipeg Free Press relied on a pre-existing consumer and production base, rather than building a platform as a third party and waiting for news producers to join in.
The key lessons here could be the importance of a manageable target market and an acknowledgment that consumers need convincing.
Micropayment platforms are a teasing prospect. The major lesson so far is they require groundwork, timing, and a pinch of luck—familiar ideas to any entrepreneur. It’s been a long road, but mainstream success could be right around the corner.