Micro transactions: The enduring news concept

Paying solely for the news you read, piece by article, seems like a really logical approach. With prices as low as a few cents each, there is no financial barrier, and readers pay publishers directly in direct proportion to the popularity of the content.

The micropayment model is as follows. The concept has existed for as long as the Internet itself, yet it has never worked.  Again and again, the Privacy Policy magnificent dawn has vanished. The sun is rising again, according to an Australian company I spoke to this week.

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The traumatic past of micro news

Throughout the past 20 years, many people have given serious consideration to how to pay for news online. Pay-per-article is something they are aware of. and Tap view were experiments that came and went in Australia. Beginning in 2014, the Dutch business Blended showed enormous promise on a global scale. The Blended business model, which brought the top Dutch publishers together on a single digital platform where readers could pay per story, was clever and well-executed. Even readers had the ability to request refunds for poor publications. The system had hundreds of thousands of users registered. Yet over time Blendle shifted its focus towards content package subscriptions, undermining its partnership with publishers that launched their own subscription services. The company’s attempt to enter the US market failed. In addition to the company’s sale to French subscription aggregator Cafeyn last year, creator Alexander Klöpping announced his resignation this year. Klöpping stated that subscribers (“premium members”) not only offered a more reliable source of income than pay-per-article readers, but they also interacted with the content three times more. This is why the company abandoned micropayments in favour of subscriptions.

newcomers to the scene

According to their business plan and elevator pitch, Spotpass, a micropayment newcomer to the Australian media industry, won’t be the last time you hear from them. Their methods and personalities differ enough to merit careful consideration.

I had conversations with CEO Doug Howe and CRO Adam Kershaw. Howe, a specialist in micropayments, is in charge of Sydney’s Opal transport payment system, and Kershaw previously served as the country manager for Australia for the New York Times. I perk up my ears when Kershaw adds, “I joined Spotpass because it was formed by folks outside news,” as his opening statement.

“I wasn’t really eager to get back into media, but these guys are going to pull this off because they’re not from media, I thought to myself. They handle payments.

Doug Howe, the CEO of Spot pass, and Adam Kershaw, the chief revenue officer

I’ll outline the system’s operation before I get into the arguments, though. Details are important.

Access to certain articles can be obtained using a payment mechanism called Spot pass that is built into the website of a publication. Publishers set the article price, which is limited to between 1 and 99 cents. The publisher’s subscription message and the Spot pass button can be seen on the pay wall blocking page. You can access the content by clicking and paying without committing to a subscription. Then again There are three other Spot pass items in addition to this “Spot Access”: contributions, timed sector passes, and weekly subscriptions.

Spotpass is not a “kiosk,” which is a collection of material from several sources in one location. This distinguishes it from Australian subscription-based aggregator Inkle and Blended.

Do they regard their primary client as the publisher or the audience, I ask Howe and Kershaw?

Howe explains, “The audience comes first. Correct response, in my opinion.

I make an effort to destroy it.

Each strong idea must be able to resist an attack, and a startup that accepts micropayments had better be ready for a fierce defense.

Subscriptions will be cannibalised by this. Why would an editor approve it?

Only 13% of Australians, according to the Reuter’s Institute Digital News Report 2021, pay for news. According to Howe, many publishers are gaining experience with subscriptions and are now witnessing a halt in development. Howe:

Some people are more smart than others and may detect subscription fatigue. Some newcomers are saying, “Oh, I’m seeing such amazing uptake of subscription,” but they are starting from scratch. The people who have been doing this for a while are the ones who can most clearly sense subscription weariness. They have a lot of turnover.

According to Kershaw, many publishers will be able to identify individuals who will probably never subscribe based on this experience. Using Spotpass

Publishers “have the opportunity to promote Spotpass offers based on likelihood to subscribe” — for instance, “they could” display the Spotpass button to visitors who exclusively access the site through Facebook and “receive something from them beyond that fraction of a cent [from advertising].”

How will Spotpass overcome the hesitation of its audience to subscribe to a new service?

Howe walks me through what a new user might go through. The new user merely needs to enter a mobile phone number, which is then validated. This utilises the concept of gift credit, which Blendle also did. The $5 credit is deducted from the article’s cost. The user submits a credit card number once their credit has been depleted to zero (after reading multiple articles). If it truly operates in this manner I’m impressed with life. Will Spotpass be able to convince viewers to join up for a new service?

Why don’t they just do it themselves, publishers?

Howe claims that several of the larger publishers they have spoken to, where the growth of subscriptions is slowing, recognise the benefit of having a unified system. Those who are also viewing the content of their rivals will see their content. It’s an exit from the silo.

What’s the cut at Spotpass?

“I’d rather not put that in print just soon… We aggregate transactions, making us more affordable than using any payment gateway. We use a percentage-based methodology.

The likelihood

Howe and Kershaw present a compelling case, and like Kershaw, I believe that the payments expertise is the key factor in this situation. Previous attempts have failed due to transaction fees and the “friction” involved in registering new users. I’m fairly confident that the system will satisfy the public, so that box is checked; nevertheless, Spotpass must now focus on how the publishers respond.

Howe claims that they are in talks with a number of well-known figures and will launch the donation button on the websites of the Times News Group (a regional news organisation in Victoria) later this month.

“Expanding globally is our plan. You only need to keep up with stories like Afterpay to realise how simple that is. Getting the consumer offer correct is essential before making any other decisions. certain that the publishers experience an increase in new revenue.

The time is crucial in this situation and may be on Spotpass’s favour. I find myself being turned away like an orphan when I try to access paywalls through news links from friends, commentators, aggregators, and search. Even though I don’t like it, I won’t be subscribing to everything. It is unfortunate that for so many individuals, the news media’s tremendous promise also turns out to be a deeply unpleasant one. I’m hoping Spotpass or a comparable payment system takes off because of this.

origin of this object

I’m not a shareholder in Spotpass. I learned about the business from Director Bruce Davidson (formerly the CEO of AAP). Important individuals like Garry Duursma and Mark Lillywhite, the CTO, are left out of this article (Chairman).

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