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Google Checkout micropayments extension to help with Paid News Content

     
7:36 am on Sep 10, 2009 (gmt 0)

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Google Plans Tools to Help News Media Charge for Content - Bits Blog - NYTimes.com [bits.blogs.nytimes.com]:
Google is planning to roll out a system of micropayments within the next year and hopes that newspapers will use it as they look for new ways to charge users for their content.

The revelation was made in a document that Google sent to the Newspaper Association of America in response to a request for paid-content proposals that the association sent to several technology companies.

The Google document, which was first publicized by the Nieman Journalism Lab, indicates that the micropayment system will be an extension of Google Checkout, a payment system that Google rolled out in 2006 and positioned as a competitor to eBay’s PayPal service, the leading system for online payments.

...

Google, which has long relied on advertising for the overwhelming majority of its revenue, said that it believed that paid content could be a good complement to advertising.

12:34 pm on Sept 10, 2009 (gmt 0)

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Can you hear it, that entreating voice, drifting on the night air, as an unemployed journalism student, hoping to elicit the dropping of a few coins into her beggar's cup, pushes her shopping cart with all her belongings down a cobblestone street, on another dreary night in Old Media City . . .

"Micropayments for the poor . . Micropayments for the poor . ."

1:34 pm on Sept 10, 2009 (gmt 0)

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We typically earn advertising revenue of 1 penny per unique visitor. I'd be willing to pay that to visit most of the sites I visit on a daily basis, and I'd be willing to get rid of all the ads on our sites if the visitors were willing to pay that amount.

I've been waiting for this for a long time and if anyone can make it work, Google can.

1:42 pm on Sept 10, 2009 (gmt 0)

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I think Google will be looking at 'content' as widely as possible, e.g. paid for access to online/mobile apps, additional video content of your favourite band not available anywhere else, etc.
2:18 pm on Sept 10, 2009 (gmt 0)

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I remember a famous (big name) journalist who once explained "the news" this way: News is a medium for selling advertising.

What he meant was without ad revenue or financial support there would be no newsroom.

Seeing the "news media" that way for the first time I found myself both crestfallen (I started college as a virtuous journalism major) and jolted awake.

Subscriptions have always been a form of micropayments or aggregate installments, micropayments by another name. Unlike micropayments subscriptions are a system without the added overhead of processing each payment and without an intermediary taking a share of every transaction and making notes about what news "sells".

I guess "news by micropayment" is a bit like the transition from bands selling LPs/albums to selling their single hit on ITunes? But a big part of the revolt against the album was the fact that so many albums were built of mostly filler with 1 or 2 hits.

Is their a parallel truth for the news? Must I pay for the obits section or the news about political blunders? If I don't value such news, then why not have a subscription to the sports section only or the business news section only . . and forget micropayments?

In a news-micropayment world are newswires king?

There's likely a place for micropayments in the news income stream, but will micropayments scale "for sustaining the newsroom", especially at the small town or county news level? Doubtful.

[edited by: Webwork at 3:10 pm (utc) on Sep. 10, 2009]

3:08 pm on Sept 10, 2009 (gmt 0)

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Sounds like a win-win proposition for Google: The micropayment scheme soothes the ruffled feathers of news publishers who hate aggregators, and if micropayments actually work, Google benefits from the news publishers' success. (That doesn't mean micropayments will work, but what does Google have to lose?)
4:14 pm on Sept 10, 2009 (gmt 0)

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The world has needed a good, efficient micropayment system since day one. I really hope this Google project works. If it does, Google will WIN big time. 1up 1up 1up

The idea has been out there for ages, and many have tried. I've heard of token systems, credit systems, systems that aggregate transactions using false currencies; but none of these caught on. Perhaps for good reason... can you pay your mortgage with Linden dollars or Booyah Bucks?

Right now, to charge someone $0.25 on PayPal, you pay a $0.25 service fee. The buyer pays out the money, the seller gets nothing.

4:19 pm on Sept 10, 2009 (gmt 0)

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For a micro-payment system to become popular with publishers Google will need to micro-charge.
6:20 pm on Sept 10, 2009 (gmt 0)

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I agree that micropayments have been too long in coming. A while back, I think Yahoo offered subscriptions for enrolled sites. Clearly, that didn't make a big dent in the overall publishing model.

Either micro-charges or some sort of a royalties clearing house arrangement like ASCAP might be needed to make this a sufficiently transparent setup to work.

I remember many years ago, before Google went public, hearing Sergey and Larry speculate on the possibility of a very modest annual fee to provide web users with access to all content and at the same time compensate content creators.

There's a question of whether, on the web, micropayments would work for all content providers, or only those with a certain degree of reputation... and how the arrangement would work. I'd hate to be paying for every link I've clicked, or for browsing to find an article I want to read.

6:40 pm on Sept 10, 2009 (gmt 0)

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I think it's fairly simple. Let people make ACH payments of any size. have an ACH company charge like $5 / month plus 1 cent per transaction, the ACH company can agree to batch out to the merchants when they reach X cents per customer so they'd only be making 1 large transfer a day to each merchant and only collecting from users when they spend let's say at least $1 or if X number of days has passed. ACH can be sent / received for free and this is a possibility for sure if profit can be made on the publisher's and processor's ends.
6:47 pm on Sept 10, 2009 (gmt 0)

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Right now, to charge someone $0.25 on PayPal, you pay a $0.25 service fee. The buyer pays out the money, the seller gets nothing.

paypal offers a small-payment version.

[micropayments.paypal-labs.com...]

8:09 pm on Sept 10, 2009 (gmt 0)

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right on creeking, paypal's micropayment fees are 5% + $0.05 per transaction, instead of 2.9% + $0.30. That means better return on small amounts, but you'd get burned on any large payments to the same account. I'm investigating this.
9:01 pm on Sept 10, 2009 (gmt 0)

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I think micropayments backed by the most important internet company would be a game changer, just like Adsense, and thousands of publishers and companies could suddenly have a new business model, especially those that are not easily sponsored by relevant commercial interest, but where the content itself is highly prized by many. Think of online comics, news, social media.

This is very interesting indeed.

10:22 pm on Sept 10, 2009 (gmt 0)

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People will not be paying even a penny for news :).
3:48 am on Sept 11, 2009 (gmt 0)

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I really hope it works out. Regardless of our individual opinions of "old media", the web needs the viable option of small payments, even down to pennies. It could open up entirely new business models. And I don't just mean putting content behind a paywall. If something like a 5 cent, or even 1 cent tip was not totally eat up by transaction fees, this could be an alternative to ads for independent publishers to explore. I could also envision something like: make a 25 cent micropayment and surf our site ad-free for the next month.

It can only work, though, if the process of making the transaction is extremely easy (doesn't require filling out forms each time or clicking through multiple screens), and if a large enough number of people starts using it so that a critical mass is reached. Of course, there are numerous roadblocks to work out. But who better than Google to attempt to overcome them?

7:24 am on Sept 11, 2009 (gmt 0)

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Dataguy: Absolutely, I totally agree with your last sentence! Just like YouTube would be worthless for most companies except for Google, they can make the micropayment world rock. Interestingly, I started a thread a few weeks ago on this issue that did not attract much interest:

[webmasterworld.com...]

7:25 am on Sept 11, 2009 (gmt 0)

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"For a micro-payment system to become popular with publishers Google will need to micro-charge."

For a micro-advertising scheme (like AdSense) to become popular with publishers, Google will need to micro-pay. What?

3:26 pm on Sept 11, 2009 (gmt 0)

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People will not be paying even a penny for news

perhaps. but I believe many people would click a "pay 25˘ to hide popups" or "75˘ to uncensor the naughty picture" - it'd be an impulse buy, like the candy racks at the grocery checkout aisle.

And don't forget
"Game over. Insert 25˘ to continue"

3:49 pm on Sept 11, 2009 (gmt 0)

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A good Idea would be to have the advertiser pay a small fee up front, to get the space, ideally, if the ads are clicked, and traffic goes off site then the regular rates should apply.
5:03 pm on Sept 11, 2009 (gmt 0)

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It can only work, though, if the process of making the transaction is extremely easy...

This is something I very much want to work. I think it's extremely important that newspapers survive. I'm also very careful about my privacy... and I try not to search or surf logged in, etc.

Obviously, for this to work, one will need to be logged in. It's a hard choice. I'd probably choose to give them the damned information, but it's not a choice I like.

5:01 pm on Sept 12, 2009 (gmt 0)

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It can only work, though, if the process of making the transaction is extremely easy...

Even then, will it work for news sites? News is a commodity, and so is commentary.

Micropayments might have a place on information sites (appliance-review sites, tech-support sites, or sources of medical information) that people visit only occasionally and only when they're looking for specific information that might be important to them at a given moment in time. But even then, I wonder how many people are willing to go back to the model of metered access (the equivalent of using CompuServe or AOL back in the 1980s and 1990s), whether they're paying for connect time or access to a Web site.

I think the "micropayments" proposal is an easy way for Google to kiss and make up the Rupert Murdochs of the world, but I doubt if it will go anywhere.

5:28 pm on Sept 12, 2009 (gmt 0)

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I'm really surprised at the lack of enthusiasm being shown here. There are technical and public perception difficulties to work out, but think of the payoff if G makes this work.

At a penny per visitor for news sites as well as message boards such as WebmasterWorld, this would mean probably 100X the profit of current PPC models (a few dollars CPM instead of a few pennies.)

This would eliminate a lot of scrapers because #1 they would have to pay and #2 they would have to identify themselves.

Eventually sites which charge would gain the reputation of being more trustworthy, because they have identified themselves officially to start accepting micro-payments. This is something phishing sites couldn't do.

Shoot, I'm looking forward to the day when everyone has to pay a penny per email sent. Spammers could never afford that, and my legitimate newsletters would no longer get caught in everyone's spam folders. Sure it would cost me some $$$, but the payoff would be big.

It's a big change, but I think it an obvious part of the natural evolution of the Internet. I'm rooting for Google on this one.

7:17 pm on Sept 12, 2009 (gmt 0)

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1. Lack of enthusiam i'm sure has a lot to do with googles lack of customer support.

2. I wouldn't pay a penny to go to any forum, why should i pay to share my own experiences and knowledge?

3. I don't think charging for something gives any reputation. In fact, it seems very e-book scammy.

4. if there was ever a day i had to pay a penny for each email, i'd re-invent email to be free once again. I already pay for the servers, i already pay for the bandwidth, i already pay for the storage, maintenance and access to email.

I don't think its any natural evolution of the Internet period, i'd be rather disappointed if it became a pay to play market. In fact, it would just turn into one big prodigy or compuserve with google controlling it all. that is sickening to even think of ;)

12:40 am on Sept 14, 2009 (gmt 0)

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I'm really surprised at the lack of enthusiasm being shown here.

There's plenty of enthusiasm for micropayments (at least on the selling side!).

But Google Checkout currently seems to be a local payments system that only supports merchants in the US (and UK?). Judging by their support forums, it seems to have the usual Google "hands off" attitude to support as well.

To be really useful, any micropayments solution needs to have a much wider spread of countries, currencies and languages, and proper end-consumer support.

10:56 am on Sept 14, 2009 (gmt 0)

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I am with dataguy - I am also surprised about how little feedback this thread receives, given that I am pretty convinced that if Google moves into micropayments with determination, this will rock the web and maybe the (media) world. But not only media - micropayments are not exclusively used for purchasing access to articles...
3:34 pm on Sept 14, 2009 (gmt 0)

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finally, apple store already has a highly successful model of micropayments - look for iphone popular apps for 99 cents/downloads which generate much more revenue than traditional shareware

second point - it will hopefully increase the competition among adwords advertisers = more ecmp for adsense publishers!

5:04 pm on Sept 15, 2009 (gmt 0)

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The world has needed a good, efficient micropayment system since day one.

I'm right there with you webwitch. I hope it works too. These are exciting times.