Are Voluntary Micropayments a Solution for Digital Content?

In Digital by Amanda DeMarco

Will readers voluntary pay arbitrary amounts of money for digital content? Writer Amanda DeMarco believes they will, and that this could be the beginning of a new business model for publishing.

By Amanda DeMarco

Once upon a time there was an elegant solution to a widely acknowledged cultural problem and then we all ignored it. The end? I hope not.

The problem is the unpaid and therefore difficult-to-sustain labor that goes into creating online content, most visible in the instance of journalism, but an issue for nearly everything you consume on the web for free.



The solution, which we excitedly discussed from about mid-2009 to mid-2010, was supposed to be voluntary micropayments. If you’ve forgotten, the idea is that you register with a micropayment organization to put a certain amount of money into an account each month. Then you distribute it among the websites you want to support, by clicking a button on individual sites or via the main micropayment website.

Sweden-based Flattr and US-based Kachingle are the two major providers. They operate in basically the same way, and recently allow you to give money to people not registered with their service. Flattr’s baseline contribution is 2.00 euros per month, and they take 10 percent for operating costs. Kachingle’s is $5.00 and they take 15 percent. Flattr has found more fertile ground in Europe particularly among programmers (Techcrunch Europe named them the Best New Startup in 2010). However Kachingle got themselves sued by the New York Times over a publicity stunt aimed at the new paywall.

Voluntary micropayments have a number of advantages: once registered, distributing the money takes a single click. Unlike paywalls or subscriptions, they don’t block access to users who can’t or won’t contribute. The bar to entry is low, so individuals and small organizations can easily take part. They’re decentralized and democratic in nature.

Still, it’s not surprising that the general public didn’t immediately adopt them; “Pay when you don’t have to!” isn’t an intuitively successful marketing pitch. But I’m disappointed that literary and journalistic communities haven’t been more supportive of this idea, either out of self-interest or because it fits their ethos.

Publishing communities have lots of reasons to be interested in voluntary micropayments. Take, for example, the growing pressure on authors to have a webpage and regularly updated blog, uncompensated work that takes time away from that next book -— let’s call it page slavery. A micropayment button would let readers express appreciation/pity. Self-publishers who depend on a more direct financial relationship with readers, publishers who offer additional high-value content on blogs, reviews, lit bloggers -— they’re all great candidates for micropayment systems.

As the economies that supported literary culture collapse, exploring new ones is essential. Note that I said explore; micropayments may or may not be the future, but trying them out and developing them could lead to the evolution that is.

People have been eager to declare that Flattr and Kachingle are lost causes, D.O.A., but that’s a result of impatience and unrealistic expectations. Ecclesiastes, among other good sources, tells us that a living dog is better than a dead lion. We should recognize that micropayments are a weak and underdeveloped tool with great potential and not a failed savior. Will they support entire industries? No. Could they be useful? If we foster them, yes. Ecclesiastes is not a font of optimism, nor are micropayments a panacea.

Flattr and Kachingle suffer from massive, partially self-created, user miseducation problems. The idea was propagated that if you put a button on your site, lots of people will give you money. This idea assumes either wide adoption of the micropayment system, or high user motivation to sign up, neither of which is yet a reality.



Which is not to say these sites are defunct. In Germany, Flattr is being used successfully, but always under at least one of two conditions:

  1. Among tech people. They’re accustomed to donating to programmers who develop open-source software. Until now PayPal has been basically the only avenue, but Flattr’s easy, one-click system is spreading.
  2. Backed by an extensive promotional campaign. Die Tageszeitung (TAZ), a left-leaning and perpetually cash-strapped German newspaper, has a history of creative outreach initiatives. A recent TAZ campaign combines Flattr with other payment options. Backed by heavy promotion through their blog and prominently placed buttons on the homepage, TAZ has convinced thousands of readers to support it via Flattr.

I decided to test out Flattr and Kachingle on my own small literary website. After posting an article about micropayments, we ended up with a whopping four Flattrs and eight Kachingles. Before you start saying that 12 people willing to give money isn’t so bad, a little research reveals that they’re nearly all Flattr or Kachingle employees, with only 2 or 3 actual readers represented.

So why am I still supporting this idea? Well, I live in Germany, a country where discussions about reimbursing creators for digitally-accessed work reach stages they never would in the US, and where Flattr has found its greatest success. I’m often reminded of voluntary micropayments’ promise. I am convinced that wider audiences could be socialized to micropayment systems as programming communities do, and that if TAZ can successfully utilize them in Germany, then other organizations can utilize them elsewhere.

Also, to misquote both Clarence Darrow and Mr. Smith Goes to Washington, the lost causes are the only ones worth fighting for. I believe that we, as an industry supposedly composed of passionate, engaged individuals, are making a mistake by not stepping up to the plate on this one. New systems need communities of early adopters to establish and spread them. Luckily, voluntary micropayment systems are far from dead and you, yes you, can start compensating the people and organizations whose work you benefit from right now. The publishing industry’s problems are also far from dead, but worldly Ecclesiastes once again advises us that “money answereth all things.”

A regular contributor to Publishing Perspectives, Amanda DeMarco also edits Readux: Reading in Berlin.

SURVEY: How Much Would You Pay to Read an Article Online?

About the Author

Amanda DeMarco

Amanda DeMarco is a freelance writer and translator living in Berlin. Originally from Chicago, her work for Publishing Perspectives focuses on German-language publishing news.