Micropayments for news: another supporter by mattsteinglass
March 4, 2009, 12:53 pm
Filed under: Internet

Michael O’Hare at RBC agrees that micropayments set up through a public entity of some kind, a la Terry Fisher, is the only realistic model for supporting a free press in the digital age. He joins Walter Isaacson and, uh, me. Who else is on board? How does one get this thing started?


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I think micropayments would probably be good for a lot of different internet businesses. However, the idea has been around for quite a while and it doesn’t seem to have gotten off the ground.

Comment by jsalvati

I’m not at all against the idea in principle, but I wonder about practice. The original idea, as I understand it, was to subsidize music by distributing a large pool of money to all music creators on the internet, in quantities that varied according to the number of times each creator’s music was downloaded. Presumably this money would come from some kind of surcharge or tax on internet use. The trouble is, this idea makes sense for music in a way that it doesn’t for writing, because it’s relatively easy to get people to agree what’s music and what isn’t music. But who gets to decide what’s writing and what isn’t? The obvious way around the problem is to subsidize all text created on the internet, but would you then be willing to subsidize Amazon pages? Amazon would no doubt be happy to pocket the money, but it seems like a waste of funds. Amazon’s an arguable case, actually, because much there is of real intellectual value, but there’s a great deal on the internet of dubious social and moral value that gets lots and lots of hits. Yet it would be difficult to prove that this stuff isn’t “writing” or isn’t “news” or whatever category it is we decide we’re trying to subsidize. So then one falls back to the idea of empowering end-users to decide to whom they’d like to give their micropayments, as a judgment independent of the number of times they click, and the last few years are littered with abandoned attempts of this sort . . .

Comment by Caleb Crain

[…] for Digital Media 2009 March 4 tags: common goods, Media by Mario Via Matt Steinglass, I see that people (also here and here) are again trying to find a way to provide payment for […]

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Caleb, the compulsory licensing model employed by the music industry in the radio age was the ASCAP/BMI model. That’s what Terry Fisher based his music-industry proposal on. ASCAP/BMI are membership organizations. You don’t collect compulsory licensing fees for your compositions because it’s clearly “music”; you collect them because you’re a member of ASCAP or BMI, and if you’re not, you can’t collect through them. You’re free to go out and try and collect the fees on your own, but that’s about as easy as getting people on the internet to pay you for linking to your blog. One would assume that the way to extend this to journalism on the internet would be to have journalistic organizations create an analogous body, with membership criteria. To be entitled to collect royalties from the system, you’d have to be accepted as a member. There would be inevitable tension between what would effectively become union and non-union shops as some blog outfits found they couldn’t meet the membership requirements. But a coalition of the major journalistic players, including the wire services and remaining newspapers and broadcast networks, would still as of this moment have enough power to create a for-pay space on the blogosphere that would force anyone referring to it to enter the system. The underlying news in the blogosphere is still largely generated by professional organizations; as those organizations crater, unpaid bloggers won’t for the most part replace it, it will simply disappear.

So there is still the interest and the power out there to do this. The problem is that, like forming a union, you need an overwhelming majority of the stakeholders to join. Our great-grandparents’ generation had the organizational talent and energy to form organizations like ASCAP/BMI and the major labor unions. It may be that we today lack such energy and such instincts, but if we have them, this is the route we need to pursue.

Comment by mattsteinglass

Hi, Matt. Thanks for the additional info. I have daydreams of a system like you’re describing saving journalism, but I can never quite work out the details, which is why I’m asking. (In some ways, by the way, the Book Rights Registry being set up by the Google Book Settlement is a bit like the micropaymeng guild you’re hoping for.)

So we’re talking about something more like a guild or a union than a government-run licensing program. How if this guild isn’t government-run, how is it going to collect payments? If it tries to collect them from readers, won’t the readers abandon any newspaper or other group of journalists who sign up with it? In other words, why will people pay to read through this scheme, when they haven’t been willing to (except for rare niche cases, mostly of business and finance journalism) in the past? ASCAP has the power to sue radio stations who broadcast their composers’ songs without permission, and to deny songs to those who didn’t want to pay. The NYT could deny access to non-paying readers, but at the risk of possibly letting some other newspaper become the much-coveted last man standing. Are you hoping that maybe a group of major players could come together and all agree at once to start charging micropayments? But if they do it in any organized way, won’t they be accused of starting a cartel? Right now, of course, the journalists at the NYT are powerless to start such a guild, because the NYT itself owns all rights in their writings as works-for-hire. So perhaps the first step would be for individual journalists to fight for their own liberation?

On the positive side, there’s no time like an economic depression for starting a union.

Comment by Caleb Crain

Hey Caleb — I don’t claim to know very clearly how to do this. The ingredients that seem necessary to me are a consensus amongst the most powerful media players that it’s necessary, and consensus on how to do it; a technological tool for recording usage and charging micropayments; and a legal regime codifying it. I don’t know how the antitrust issues are solved with ASCAP, but it seems to me they’re not very dissimilar: both involve lots of producers agreeing to charge a standard compulsory-licensing fee.

I would bet that this would work much better as a discussion where NYT, WashPost, WSJ, Trib, TimeWarner, Conde Nast, CBS, and the journalists’ union are all at the table. I think individual journalists peeling off to try to reassert their own copyrights will not have enough market power to impose this kind of solution. I think that a coalition of the biggest corporations along with the unionized workforce would have enough market power to impose a solution. And I think it would be good. I think that if people were constantly getting charged fractional-cent payments as they clicked, the payments would not be burdensome but would generate enough income to start re-including content creation in the cash nexus. While also allowing people to decide how much content they’re willing to view and pay for. I don’t think it would kill the explosion of creative energy the internet has unleashed, but it would reward the people who are the sources of that energy.

The other huge issues, though, are technological. I feel fairly ignorant of how this could be done, but I am still blogging about it because despite my ignorance I have a strong sense that this is the way to go. What do you think?

Comment by Matt Steinglass

Hi, Matt,

Micropayments seems like maybe the only plausible solution; I just wish it were more plausible. I’m still hung up on the question of inside vs. outside, but let’s assume that a guild of some kind gets to decide when a blog rises to the level of journalism, and that we can add legal force to this distinction in a way that people don’t get all First Amendment about.

Then there’s the question of money. I was discussing Walter Isaacson’s article on micropayments a couple of weeks ago with a newspaper editor whom you and I both know, and he pointed out that Isaacson suggests that a newspaper might be able to charge as much as $2 a month for full web access—and that home delivery of the New York Times costs $43 or so. In other words, on those terms, even if micropayments succeed, newspapers will suffer a drastic and painful cutback if they’re forced to rely solely on them for income.

But if the fates smile and a low price point means many more viewers, perhaps the money will be there after all. Then the problem, I think, is with the bother of the transaction. If I have to decide “Is this worth 3¢?” every time I face a newspaper headline, I will be disinclined to bother, not because it isn’t, but because I don’t want to have to keep making that decision. Let’s imagine, though, that a company comes along, let’s call it Nickel, Inc., that allows you to buy subscriptions to various periodicals (or lets you tell it which periodicals you have paper subscriptions to) so that you get automatic access to that publication’s work, the way that academics working on their university computers can seamlessly access, say, the TLS and the LRB and the NYRB, without being even aware in their cases that their employer is footing the bill. But Nickel, Inc. would cause a tollbooth of some kind to appear on content manufactured by a newspaper you weren’t yet a subscriber to. Here’s my suggestion: The tollbooth should appear at the end of the article, not the beginning, and it should pre-charge you but give you a chance to revise the charge. So I see it working like this:

If you go to read a news article online and don’t have a Nickel, Inc., account, then you see only a tollbooth saying, “If you register your credit card with Nickel Inc., you can read this article for as much as you want to pay for it.”

If you go to read said news article and you have a Nickel, Inc. account, then when you reach the end of the article (or the bottom of the first page), you see a little tollbooth saying, “You’ve paid 5¢ for this article through your Nickel, Inc. account. Want to give more? Click here. Not worth even 5¢? Click here.” In other words, the newspaper, through Nickel, will have pre-set what it considers a fair payment for non-subscribers. And if you do nothing, that’s what you will have paid. But if you read the article and think it’s really dumb and annoying, then you can take your nickel back. It’s a “Nudge” thing. You’ll know that you don’t have to pay for Stanley Fish’s blog post if he really seems full of it this time, but the newspaper will know that it’ll be up to you to go the extra few clicks to take the nickel away from him as a punishment, and that unless the article seems really awful, you’ll let him keep the nickel.

Finally, if you go to read an article online, and you have both a Nickel account and a subscription to the periodical, then the little tollbooth will say, “Thank you! Nickel has verified that you have a subscription to the Brooklyn Dodger, and you’re reading this article at no additional cost. Is this article worth a few more cents? Click here.”

This is as entrepreneurial-minded as I’ve been in decades. I’m going to go take a nap, now.

Comment by Caleb Crain

Hi Caleb — I’m gonna take this to a new blog post…

Comment by mattsteinglass

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