When the world wide web was created, it was designed to allow for micropayment systems because developers assumed small transactions would play an integral part in how the web functions. But today, robust solutions for micropayments have yet to materialize, especially in digital publishing, and the dominant forms of web monetization are advertising and subscriptions. Although these methods are value means of generating revenue for publishers, they are not without issue.
Generally, people don’t like advertising, and, according to Jack Marshall at ToolKits, only 19% of users in the US subscribe to a publication, and only 4% subscribe to 4-5 publications, which means 81% of users in the U.S. don’t like subscriptions, either.
The lack of micropayments and public dislike of subscriptions presents a problem: People don’t like the primary means of monetizing content, but quality content isn’t free. While micropayments in publishing could be a great addition to any publisher’s business model and revenue strategy, it hasn’t been able to break through for several reasons:
It hasn’t improved the user experience.
There’s too much friction in the adoption of the process.
The perceived value of individual publishers against larger content companies.
First and foremost, many of the solutions available today for micropayments aren’t improving the user experience. The same annoyances that existed with traditional newspaper or magazine subscriptions still exist. Users still have to create an account, put a credit card on file, and then get charged when their consumption meets some threshold.
Then, you have to remember when the subscription auto-renews, and it is not always clear how to discontinue or cancel the subscription. What’s more, just because you are paying for the service doesn’t mean you won’t get inundated with ads.
In the new world of one-click purchases, signing up for and managing a subscription requires more effort than most casual consumers are willing to commit, particularly in an environment with such fierce competition for an individual’s attention. To combat this, some payment solutions use blockchain as a means of facilitating micro-payments. However, most users either don’t care, think blockchain is a scam, or don’t understand how it works, which creates high barriers to entry for all but those who are well-versed in cryptocurrency.
The biggest obstacle to the adoption of any kind of payment in digital publishing is the perceived value of an individual publisher. Publishers are not just competing against other digital publications. They are competing against Spotify, Netflix, Disney+, and many others; all of which offer a high degree of value through variety and exclusivity of content.
While many publications claim to have variety by covering different content verticals, most fall short of content exclusivity. The most popular content categories for digital subscriptions are news and current events; arguably the most commoditized content out there.
These are topics that are covered by everyone. While editorial and opinion sections help to differentiate a publisher’s offering, this type of content has a shelf life that decreases the content’s value. Most publishers lack the kind of exclusivity that is timeless, valuable, and exciting for your average consumer.
For most, a single publication does not offer consumers enough value to justify the effort of signing up, and, despite these hurdles, many publishers continue to chase the revenue opportunities from the 19% of people who subscribe to digital publications instead of adapting to a business model that targets the 81% that don’t currently subscribe.
It makes sense for a publisher to focus on the 19% of users who subscribe to a publication, and there is no doubt there will be plenty of competition for the 4% that subscribe to more than one publication. However, it is increasingly clear that if a publisher wants to grow the business, they must look outside of their paywall gardens and meet potential readers where they are.
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