Micropayments: The Next Small Thing?

As a young journalist about to graduate from college and dive into the slightly unhinged state of this profession, it is difficult to imagine a future in which micropayments are the norm. The concept of paying a nickel per article or roughly $2 a month seems insignificant when we spend $4 on a latte at Starbucks weekly, but the underlying implications of a pay-to-play system between readers and news organizations is what concerns me most. If similar endeavors have failed in the past, why would they work now? And in a time of economic recession, will people even want to shell out these seemingly small amounts for content when there will surely be alternatives, as I imagine it impossible for every single publication to adopt this method? The system right now is definitely “broke” and it needs some fixing—but I’m not convinced that micropayments are a one-stop-shop solution to the problem.

How it Could Work
Walter Isaacson, former managing editor of TIME, tries to answer some of these questions in an article entitled, “How to Save Your Newspaper.” He believes micropayments are a viable option for the future, stating that since “news organizations are merrily giving away their news,” they should stop doing so and get users to pay for the journalism they produce and provide. He also points out that this is due to so many newspapers becoming more focused on their web components.

Though Isaacson admits to some examples in which this business model totally failed, he believes that because readership is higher than ever, readers could be inclined and willing to pay for content. He also points out that the technology necessary to make these micropayments is not too far away from being developed. With the advent of systems such as PayPal or iTunes, a “one-click system” would be so simple and user-friendly that it would make micropayments appealing to consumers, according to Isaacson.

It is important to note the distinction Isaacson makes between subscription and micropayments. He acknowledges that subscriptions are not as appealing to readers because they ultimately cost more, which is why he argues that readers who just want to pick and choose their news can do so with micropayments. Ultimately, Isaacson believes this kind of system could apply to all types of online media, from magazines and blogs to videos and even porn and that it would revolutionize the current system.

Why it Won’t Work
Michael Kinsley, founding editor of Slate Magazine and New York Times Op-Ed Contributor, makes a counterargument to Isaacson’s micropayment proposal in an article entitled, "You Can't Sell News By the Slice." His main problem with micropayments is that readers have never paid for their content before so it would definitely be a difficult first. Kinsley believes it would be impossible for every single publication to go the micropayment route, which means there will be inevitable competition. This competition also means that people will most likely go to the cheapest alternative—a publication that does not cost anything.

Beyond that hurdle, Kinsley also argues that charging $2 a month won’t resurrect or save the newspaper industry. It simply would not be enough to recover now sunk costs. Kinsley says that a few of the great papers (like the Washington Post and New York Times) will survive and that it will breed even more competition and disparity among those who charge and those who do not. Ultimately, he’s skeptical of the micropayment idea and does not see it as the end-all, be-all to the journalism’s industry’s current crisis.

My Two Cents
Like Kinsley, I too have my doubts when it comes to micropayments. Firstly, there are so many publications out there that I find it hard to believe that everyone will convert to this system. A part of me feels like some journalists would disagree with this in principle so much that they would start their own offshoot publications or blogs that would be free and attempt to provide the same high-quality journalism for free. My main problem with Isaacson is that he says “charging for content forces discipline on journalists: they must produce things that people actually value.” I believe journalists can (and currently are) producing things that people can value without having to pay for them. I do not think that by putting a nickel or dime price tag on a story that it gives it value.

Susan Merit of the Huffington Post is also admittedly skeptical. She says there are two major questions that need to be answered before entertaining the micropayments system: “1) Could the famously contentious media industry agree to all install metered gates on their web sites, forsaking bits of their ad revenue as they try to switch consumers to micro-paid content?2) Would users/readers actually want the established companies content enough to pay?” I have a hard time imagining how we will come up with the answers to these questions. Though I believe journalism does need some sort of solution to keep it thriving and surviving, I am not so sure that micropayments are our answer.