Today we, Paygo and Dan Rather, are launching a public test of a new type of monetization model for Journalism - a Micropayments based Paywall for high quality content. The goal is to give consumers access to trustworthy content while helping Publishers and Creators better monetize the great content they produce. The test will evaluate whether Consumers want this, how much they are willing to pay and whether this is enough to be meaningful for Publishers and Creators profitability.
“An educated citizenry is a vital requisite for our survival as a free people”-A quotation commonly misattributed to Thomas Jefferson
We need access to diverse, reputable, trustworthy sources of information if we plan to remain a free, liberal democracy. The internet was founded as an open, free internet which was great for consumers but challenging for Publishers who based their business on Advertising. When Ad prices began dropping, Publishers faced shrinking budgets leading to the firing of journalists, drop-in expensive, in-depth investigative reporting, and the rise of populist, cheap but engaging “click-bait” content.
“Digital advertising models require large volumes of pageviews, which can incentivize sensationalism, virality, or “copycat” editorial efforts rather than encourage quality, independent journalism… digital advertising engenders a race-to-the-bottom to produce the lowest-cost, highest-volume content.”
-Matt Skibinski, The Lenfest Institute
A new “closed” internet is being built, walled off by Paywalls, with limited consumer access to trustworthy information. These closed networks have helped Publishers become more profitable at the expense of consumers' access to information. If everything is a subscription service hidden behind a Paywall, what will consumers do? Will they subscribe to 5 newspapers? 10 Newsletter? Only 20% of Americans subscribe to any news sites, with 66% of them subscribing to only one publication - will that one publication be their only source of information? Paywalls are converting to subscription 2-8% of potential viewers - what about the rest of users who are locked out? Do they just not get access to truthful information? And those that do subscribe only read one opinion? How can we function as a democracy when:
“The Truth is Paywalled but the Lies are Free”-Nathan Robertson, Current Affairs
Paygo Mission: Make Journalism Profitable Again
To make Journalism profitable again, we need a business model affordable enough for the consumer to use daily but profitable enough for the Publishers to grow and invest. Consumers need to read diverse opinions without buying subscriptions to everything and sharing their data with everyone. Publishers need better monetization models for their content, other than Subscribe or take a hike.
Paygo Vision: Consumers should be able to “unlock” Paywalls and read a specific article with an affordable “Pay As You Go” price
Imagine if every Paywall has a button that acts as a virtual keyhole. Each consumer can anonymously unlock it with their Paygo account and read the specific article in a Pay As You Go model for several cents. Several cents might not sound like much money, but it can represent ten times what the Publishers earn today on ads, usually fractions of a cent per article viewed. With Paygo, Consumers get access to any content they want without a subscription or ads nor the need to signup and share their information with every site. Publishers make much more money than Ads and can offer their content to 100% of their viewers while still offering subscriptions to their most engaged users who need it.
We believe creators, whether an established Publication or a Newsletter writer, should have full ownership of their content and distribute it on any platform they choose. We do not believe there is a one-size-fits-all business model for all content. Every creator should balance a mix of free and open, ad-supported, closed subscriptions, accessible but not free Pay As You Go, as a portfolio of monetization options. The Creator should decide the mix, balancing discovery and distribution vs. profitability and scarcity - their content, their choice. Consumers will decide what to pay for based on their needs and desires.
What are we launching today?
Today we are launching a public test of our Micropayments Paywall, partnering with Dan Rather for this test. You can read his thoughts on the subject here, his launch post here our founder, Noam Bardin's, thoughts here. We want to see if this model is interesting for everyday consumers and get some data to see if this makes sense for the Publisher. Dan and other Creators will be publishing content directly to Twitter with a Pay As You Go Micropayments Paywall. Why a public test? We don't know if this model will work. We need your feedback to know if we are on the right track.
Micropayments are financial transactions involving minimal amounts of money, cents, or fractions of cents. Since digital content has no marginal cost (i.e., a digital article can be read once or a thousand times for the same cost to create), Micropayments can provide a lucrative business model for the Creator while negligible for the Reader. Micropayments cannot be supported on the current financial networks since the transaction cost of a credit card payment can easily reach $0.30+ per transaction. Thus, paying $0.05 for an article would be a losing proposition. Paygo solves this by doing a $3 prepaid transaction, holding the balance for the user, and then paying the creator the relevant payment, even a few cents, from the prepaid balance. Paygo will keep a percentage of the transaction to cover the aggregated transaction fees and generate a profit. At the same time, all creators connected to Paygo get to offer Micropayments to their readers. Added benefits are frictionless access (no need to sign up), anonymous transactions (no need to share your personal information, such as email or credit card, to get access), and potentially new digital business models yet to be imagined, unlocked by this new structure.
How can you help?
Consumers - read what you want and let us know how you value the content by paying or tipping the amounts you think are right or not reading it, and we will get the message ;-) You can follow Dan at @DanRather to read his insightful analysis of world affairs as they happen and follow @paygomedia on Twitter where we will share updates and retweet content from our creators
Creators - come experiment with a new monetization model. We are not exclusive; it’s your content to distribute anywhere you want but let your non-subscribed users have access to [some of] your content on a pay-as-you-go model. Share your thoughts with us at firstname.lastname@example.org.
Publishers - if you run your platform, we have a simple way for you to add a Paygo keyhole into your paywall to test it out. You can try this immediately and distribute content on social media with our platform and see what happens. We welcome feedback at email@example.com.
This is a public test. We don't know what will happen. We will probably have a lot of bugs and missing features. Please be gentle with us, we are trying to fix democracy ;-)
Want to learn more and try out our Micropayments Paywall? Check out these articles below:
Would You Pay 5 Cents to Read This Article? Here’s Why Micropayments Could Help Save the News.