PayChoice for Newspapers. And everything else that’s free.

I got a note saying that Walter Isaacson‘s latest Time Magazine piece — How To Save Newspapers — cries out for VRM. I agree. Here’s the exciting text amongst his closing paragraphs:

Under a micropayment system, a newspaper might decide to charge a nickel for an article or a dime for that day’s full edition or $2 for a month’s worth of Web access. Some surfers would balk, but I suspect most would merrily click through if it were cheap and easy enough.

The system could be used for all forms of media: magazines and blogs, games and apps, TV newscasts and amateur videos, porn pictures and policy monographs, the reports of citizen journalists, recipes of great cooks and songs of garage bands. This would not only offer a lifeline to traditional media outlets but also nourish citizen journalists and bloggers…

…The need to be valued by readers — serving them first and foremost rather than relying solely on advertising revenue — will allow the media once again to set their compass true to what journalism should always be about.

PayChoice is what he’s calling for here. It’s not a micropayment system. Instead call it a microaccounting sysem. It will start with something essential that we don’t yet have: accounting for actual uses, including reading, listening and watching. Journalism, music and other currently free stuff is worth more than $zero. How much more? We need to be able to say.

PayChoice would also —

  1. Provide a single way and easy way that consumers of “content” can become customers of it — rather than the multiple (and often difficult) ways that the producers are currently coming up with. (I’ve never been able to pay for public radio on a station website in less than three minutes. That’s too much friction.)
  2. Provide ways for customers to look back through their media usage histories, inform themselves about what they have been enjoying, and how much of it — and to determine how much it is worth to them. The Copyright Arbitration Royalty Panel (CARP), and later the Copyright Royalty Board (CRB), both came up with “rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller” — language that first appeared in the 1995 Digital Performance Royalty Act (DPRA), and tweaked in 1998 by the Digital Millennium Copyright Act (DMCA), under which both the CARP and the CRB operated.  The rates they came up with peaked at $.0001 per “performance” (a song or recording), per listener. PayChoice creates the “willing buyer” that the DRPA thought wouldn’t exist. And I can tell you, as a lover of music and radio, I am willing to pay far more than that rate. That’s why I came up with the PayChoice idea. I want to be a customer of otherwise free stuff. And I believe the buy side can come up with that system — one that works the same way for all content providers — a helluva lot better (and faster) than the providers can.
  3. Stigmatize non-payment for worthwhile media goods. This is where “social” will finally come to be something more than yet another tech buzzmodifier.

So, stay tuned.

11 Comments

  1. There’s no doubt to me that a payments system that allows easy payments for useful content would be a big advance beyond the costs online providers exact for their “free” content. And better for the providers, too.

  2. “Good news will always be valued.

    Unfortunately, copies are extremely cheap to make, and ever greater numbers of people are paying a black market price for them rather than the monopoly price, i.e. paying nothing instead of something.

    Instead of a revenue model that depends on monopoly protected sale of copies of news, you’ll have to move to sale of news. Sell what people want (news), not that which they can make themselves for nothing (copies).

    Fortunately, the very device that makes copying so cheap is the same device that makes communicating with one’s customers so cheap, i.e. The Internet.

    So, form a bi-directional relationship with your online customers (see VRM) and sell the news to them, and moreover, encourage a free market in copies (rather than the black one that exists anyway).

    That’s what the new revenue model is.”
    From: http://www.digitalproductions.co.uk/index.php?id=167

  3. Good points, Crosbie. A bi-directional relationship is the answer.

    By the way, I first wrote here about the problem of “giving away the news and charging for the olds”. It’s still with us.

  4. Doc, the points you enumerate are forehead slappingly good.

    Unfortunately two centuries of being indoctrinated with the idea that the newspaper’s words remain the property of the newspaper prevent them escaping from the idea that the words are the asset they’re selling rather than the work that went into writing them. That’s why they give away the news and attempt to charge for the olds.

    As you know, I put the cause of this brain damage down to the privilege of copyright, something that the Internet is revealing to be an ineffective anachronism – though those still wedded to it persist in believing its ineffectiveness lies in society’s moral decay rather than a more fundamental law of information.

    No matter.

    Those whose minds can make the paradigm shift will realise that like any other craft, if the raw materials are free, what ends up being sold is the labour of manufacture. Hence newspapers must sell the news, the work that went into collecting and producing it, not paper copies of the words it’s put into. After all, it takes a large skilled and experienced staff to produce news. Producing paper copies of news can be done by a five year old and a photocopier, or digital copies by a webserver and RSS feed.

    Not only must newspapers shift from selling copies to selling news, but they must abandon the conceit that they can charge for it from a position of power. They will have to move to a more agreeable and egalitarian relationship with their customers, such that they invite their customers to commission their production of the news. This means abandoning the miserly notion that anyone who sets eyes upon their work or who distributes it without paying for it is a thief to be sued. Invite those who want the news published to pay for it, deliver it to the public, and do not begrudge the inescapable fact that the public now own the words (the newspaper is now a joint owner with the public). Yes, there will be many members of the public who did not contribute. These are not thieving free-riders, but future customers (if they’re treated nicely).

    Those who are interested in news will want to pay those who are good at producing it to produce it. All the producers have to do is provide a means for such interested customers to pay them for producing the news. That means abandoning those mechanims that attempt to charge for copies.

  5. Well said again, Crosbie. I agree with everything except “All the producers have to do is provide a means for such interested customers to pay them for producing the news.” I believe that media content publishers — including, and perhaps especially, newspapers — are incapable of providing that means, least of all in a consistent way across all their properties. That’s why we need a system that comes at the problem from the customers’ side. Such as PayChoice.

  6. Ok, I grant you that the traditional producers of news may be ‘incapable of providing that means’, but this is more due to cognitive disability than practical inability.

    Newspapers may well be far too entrenched in a traditional mindset to adapt, to recognise the simple change they could make to permit them to survive.

    That’s why I’m more interested in bloggers, the more adapted journalists of the 21st century, and enabling their readers to pay them for their work (via 1p2u.com).

    Perhaps once the newspapers see such things as that or PayChoice working they might more easily recognise it as their means of survival…

  7. To me, the most intriguing line in Crosbie’s comments was: “invite their customers to commission their production of the news.” The idea that some sub-set of users might want a particular subject covered and be willing to pay for that seems more believable than hoping everyone will pay for everything.

  8. Jonathan, as I expect Doc will agree, the fairly revolutionary thing about VRM is to see things from the customers’ perspective rather than the vendor’s. The vendor is not the one in control of what deals the customers may choose to engage in.

    Think of a system that permits all those interested in news to express what they are willing to pay for, whether just horse racing or ‘anything impacting tourism around the world’, or ‘everything that might be of potential interest to a typical resident of Madison, Wisconsin’. Imagine every single individual expressing an individual bargain, and that these may be collectively accepted (in whole or part) by the newspaper.

    So I’d agree that if a newspaper refuses to consider any individual’s commission that isn’t for the whole shebang, they’re going to have fewer takers (and revenue) than if they said ‘Tell us what you’ll pay for, and if we can deliver it to you, we will accept your commission (should we consider it equitable)’.

    This is diametrically opposed to the newspaper traditionalist’s current proposition for online delivery of “You can’t read it until you’ve paid a year’s subscription, and woe betide you if you quote any of our headlines or let anyone peer over your shoulder.”

    It’s so diametrically opposite that, as Doc suggests, you should not look to the incumbent producers of intellectual work to develop this revenue model. It’s going to have to come from the people, the customer side, the public who would own the words that they pay for, pay to be produced and delivered to them.

    This is of course heresy to immortal corporations who would own the words they produce for at least a couple of centuries. That theological schism prevents them perceiving the route to their salvation. The same schism can be observed between producers and customers of copyright/patent constrained software vs free software.

    Free as in speech, not as in beer.

    There is a large demand for news. That means there’s money involved, and a bargain to be made between those who have money and those who can supply the news to them. There’s also a large demand for liberty, and no good reason why this liberty should be suspended to benefit the owners of printing presses.

    The people are taking their liberty back (whether publishers like it or not). What remains is the facility of enabling individuals to exchange their money with publishers for the publications they want and would like to commission (or reward).

    The market for copies has ended.

    The market for intellectual work has just begun.

  9. Can you give us a set of use-cases — where readers say what news they’d pay for — that are user-friendly and common?

  10. Given further research and funding I see no reason why not. However, it’s a bit ‘cart before the horse’. If one provides ‘users’ with a means to express what they want then one may discern what must self-evidently be user-friendly, and from analysis, what of those expressions are common.

    I understand that ProjectVRM includes exploration of mechanisms to enable ‘users’ to express their wants, and any prices they would put upon satisfaction thereof.

    It’s early days. I’m currently working on a very simple ‘use-case’, i.e. “I’ll pay you a penny for the next blog article you publish”. Even that could take some time establishing as a ‘user-friendly’ proposition. It may turn out to not be user-friendly at all. I have a hunch it will be. Others, as with PayChoice, have a hunch that enabling the price to be specified will be attractive. I’m not sure. There are many issues of friction and decision cost that will impact these things, let alone people becoming familiar with the whole concept of being enfranchised to bargain with vendors on more than their ‘take it or leave it’ basis.

  11. What Crosbie said. Those last two lines nail it.

    Jonathan, I can’t think of any examples of “where readers say what news they’d pay for”, much less any “that are user-friendly and common”. But to me that’s like asking for examples of the Internet when all we had were Compuserve, Prodigy and AOL.

    As we said in Cluetrain ten years ago, a seller-dominated marketplace was put in place when Industry won the Industrial Revolution. The Internet Revolution is one where everybody wins — starting with customers.

    And that’s why VRM starts with customers. It’s not a lot more complicated than that. At least as far as our ambitions go. Getting it done is a helluva lot more complicated.

    I’m far more encouraged about working with industries that welcome VRM, such as public radio here in the U.S., than with ones that don’t (yet), such as newspapers. That’s why I’m dropping out of the whole fracas around micropayments as the next big hope for VRM. And proprietary kluges like Kachingle (which gets a big kiss from Editor & Publisher here.

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