Micropayments: Would you pay 20p to read an article?

Newspaper stand in New York A plethora of titles - but for how long? Without devising a fresh way to make money, newspapers will continue to suffer from falling sales

How much is an online article worth to you?

After reading the first few lines, would you pay a bit of money to read the rest of it?

Technology of Business

Consider this as a future: paying small amounts to read, watch and listen to content online. 20 pence (32 US cents) for a feature here, 10p for a news story there.

It's a system called micropayments, and some believe it is the future for supporting journalism, and other creative content, on the internet.

The likes of Google and Paypal have begun to roll out and promote their technologies, and there are a number of smaller players hoping to break-through.

Of course, in the BBC's case, articles are effectively pre-paid by a combination of the licence fee and income from international advertising deals.

But for most news organisations - newspapers especially - online content supported by advertising just isn't paying the bills.

Revenues are down, newsrooms are shrinking, and publishers are, without exaggerating, panicking.

Dead trees

So far, the majority of sites that have decided to charge readers online have opted for some kind of variant on what is widely known as a paywall.

Start Quote

There's a myth that people ever liked news.”

End Quote Charlie Beckett POLIS

They're not particularly popular - and are often seen as creating virtual ghost towns, pushing thousands of readers away.

As the name suggests, paywalls keep all the valuable content under lock and key. Access can be gained via a subscription, much in the way a print subscriber can arrange to get a newspaper delivered every day to their home.

Both London's Financial Times and New York's Wall Street Journal are successfully playing the paywall game - but they do so with a wealth of exclusive content in areas other less business-minded newspapers rarely tread.

More general publications have faced a bigger challenge.

The Times of London put up its paywall in 2010, and traffic was reported to have dropped by more than 80%.

That said, it has performed better than most had perhaps anticipated, attracting more than 100,000 subscribers in a year.

The New York Times has made notable strides in experimenting with content models. Up to 10 articles a month can be read for free - but beyond that, a fee is applied.

The Times paywall options The Times of London put up its own paywall in 2010

The journalism in both titles still largely relies on the efforts of journalists whose employment is thanks to the success of the printed product - sales of which, like most other newspapers, are in decline.

Perhaps most disastrously, Johnston Press, one of the UK's largest newspaper groups, attempted to put some of its local newspapers behind pay walls in 2009 - only for the experiment to wither and die a few months later.

Their paying subscribers, it was reported, numbered in the tens.

Turn off

So far, so disheartening. But why? It may seem obvious, but Jakob Nielsen, one of the world's leading experts on usability, believes it is not just about money.

"Having a registration screen, even for free, turns the vast majority of people off," he says.

"It's not just a matter of monetary cost, it's also a matter of the 'interaction cost'. You have to add those two together. What is the extra hassle for the user?

"The interaction cost of setting up a new account; not just time, but also the thinking - the pondering over 'should I really do this?' or 'is it safe to use this system I've never heard of?' and so forth.

"That's all a huge amount of overhead for the user."

Google's micropayments on Oxford Reference site Google's micropayments, demonstrated on the Oxford Reference site, greys out text until a fee is paid

But Charlie Beckett, founding director of journalism and society think tank POLIS, believes the challenges faced by newspapers go deeper than just poor user experience.

"I think there are brilliant payment models for anything," he says, "Except journalism.

"There's a myth that people ever liked news.

"News is entertaining - but it's not as entertaining as a pop video, or a download of music. In that sense it's a tougher sell."

'Chicken and egg'

But could micropayments offer readers an attractive middle ground? A deal with a reader which dodges the commitment and cost of a subscription, but doesn't give away the content for free?

In a blog post written way back in 1998, Mr Nielsen boldly predicted that "most sites that are not financed through traditional product sales will move to micropayments in less than two years".

Of course - that hasn't happened.

Start Quote

The next best hope going forward is that it's something that evolves out of the mobile devices.”

End Quote Jakob Nielsen Usability expert

"I think we're still waiting for a really centralised initiative," he says, with a sense of frustration.

"It's very much a chicken and egg problem."

Chicken and egg, he says, because in order for a single micropayment system to take off, it has to be seen as the popular choice among readers. But for that to happen, it needs to be adopted by a large range of outlets.

He believes the solution to this could be in our pockets.

"The next best hope going forward is that it's something that evolves out of the mobile devices.

"The first step is already in place - there are these app stores and music stories and ringtones and so forth. Typically the phone comes with some kind of ability to pay.

"Also there's a lot of talk to expand mobile phones into a mobile wallet you can use to pay in the super market, and so forth."

Google's experiment

Making a push in this area is Google with its Wallet system.

Through its Android mobile devices - particularly those with near-field communication (NFC) technologies - the company hopes that in future millions will pay for things with their mobiles rather than traditional credit cards.

Piles of newly-minted 10p pieces The buying process has to be straightforward, says usability expert Jakob Nielsen

Included in its plan for Wallet is what the search giant calls "an experiment to see if users will be prepared to pay for individual web pages if the buying process is sufficiently easy".

On a page introducing the technology to businesses, it gives several examples of websites in which the first part of some written content is viewable, but the remainder is greyed out.

With a click, the grey is removed - and a small fee is charged to the user's Google account. If readers don't like what they have bought, they can get an instant refund.

It is a seamless, one-click transaction - a world away from a lengthy sign-up process.

No answers

It cannot be any other way, argues Mr Nielsen, who says buying with micropayments must be as simple as working a household switch.

"You turn on the light when it gets dark - and immediately it starts charging you.

"But you don't have to log-in to turn on the light."

Google is taking baby steps with this idea thus far, and its competitors are significant.

Newspaper seller in London in 1939 The time when newspaper was king has passed, claims Charlie Beckett from POLIS

Paypal launched its micropayment system in 2010, with an added chutzpah that comes with being long established as a popular way to pay for things across millions of sites on the web.

Popular video site Vimeo, famed for its HD movies, indie films and documentaries, offers micropayments - but its scheme relies on goodwill, asking for a small amount after content has been enjoyed, like a virtual tip jar.

Micropayments offer something of an improvement, Mr Beckett agrees, but he says it is far from a solution.

"The internet just makes it incredibly hard to have what we used to have before: this lovely cupboard where we could keep the news in, and if you were very good and gave us some money we would let you have some.

"Once you've lost that, it's very difficult to get it back."

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