M-payments, micro payments: an opportunity for media


Having spoken on behalf of the print media industry earlier this month at the m-payment summit in London, I am returning to this important subject today in this blog post.

Readers today consume content anytime and anywhere, and the plethora of ways to do so grows by the minute. But let’s take a long view for a minute. Let’s look at the landscape they find themselves in.

The coming Internet of Things makes it a truly connected world 24/7, where we are now identified by geolocation or an IP address.

In fact, one to “watch,” so to speak, is what do we all do regarding wearables? There are many implications here for print media, mainly in engagement terms (alerts, headlines, etc.) – and then monetisation down the road sometime.

The only monetisation of such I am aware of thus far in print media around wearables is The Washington Post having Infiniti cars sponsoring its alerts. These are very early days, but I am interested in seeing how the whole mobile wallet develops in this space. M-coupons are starting to making some traction in the United States currently – bar codes on watch screens that are used in the EPOS systems in stores, etc.

News media companies realise the role interactive technologies are now playing … and that they will continue to play a big part in future business models. The trick, though, is how to monetise this new world. As print revenues decline, digital monies are not replacing them fully yet.

Mobile, for example, is seen by many as an add-on and not the premium channel it deserves to be. News media companies reach more people today than ever – through largely a print + digital offering/portfolio.

I could argue that we deserve better.

More creativity abounds now – more investment in trying new ideas, better structures, etc., with road maps, customisation, and creative advertising solutions across platforms. These all add to the mix.

And then there is data! The future winners, according to Enders Analysis, are those who have a firm grip on their audiences and where they are going … using data. That’s why many media companies are seeing data as the Holy Grail, capturing, manipulating, and exploiting their data now in this new era of Big Data.

When adding first-party data (via competitions, subscriptions, etc.) to the market and industry data that’s available freely, a powerful picture can emerge that’s attractive to advertisers.

So, it’s all simple, isn’t it?

Well, not quite. But news media is getting there. There is still much to learn, get right, and understand. And a significant piece of the jigsaw puzzle, I believe, is in the area of direct payment solutions (that is, charging for content direct to the user’s mobile phone bill).

So, where does mobile payment technology fit in?

News media are focused on developing mobile products more than anything else. But a whole range of technology companies (app stores, operators, payment companies such as Barclaycard and Visa, etc.) are going to have a big impact on how publishers make money. We are still on first base!

For instance, would giving readers the option to pay for media content through mobile phone operators give a boost to circulation sales? If someone goes into a shop and buys a carton of milk, it feels wrong to put it on your plastic card. The same could be said of picking up a daily newspaper.

Consider the logic: There are more people with mobile phones than credit cards in the world, so mobile billing could be a way to increase sales. The potential is most definitely there.

It could be argued that app stores and a whole new breed of apps (such as Uber and OpenTable – just two of many) are already doing a decent job of taking much of the pain and hassle out of paying for stuff and content on mobile. No terminals need to transact.

But for “non-app” sales, or for reaching consumers without a credit card or those who don’t want to use one, it could be a good way of tapping into users who don’t yet pay for things with a mobile device.

I feel that what’s needed is an education exercise from the tele-media industry to publishers to iron out the trust and fear factors – assuring them there is no risk – and explain of the benefits.

Another hot topic is whether or not this new way to pay would help users make mobile advertising payments. Near field communications (NFC) (now, for instance, on the iPhone 6 and 6 Plus) allows mobile users to pay for items simply by tapping bank cards on payment points.

This surely has big potential. If NFC payments do really take off, it could provide an interesting and powerful new way to track the impact of advertising on a range of purchases, particularly at point of sale.

This element has been missing for advertisers thus far, and news media companies, as “trusted” brands at the very heart of buying decisions, could be well placed to take advantage of new developments and efficiencies in the mobile retail process. Think of the e- and m-commerce and brand extension opportunities.

Education, again, is and will be key. There is still not enough knowledge (and a fear of the unknown) in media businesses and their agencies and advertisers, which keeps this from being fully explored and ultimately exploited. Curiosity is there, but perhaps there is not enough to take that curiosity to the next stage without help.

That was the message I took to the m-payments summit. Now let’s see if they listened!

One reason media businesses such as newspapers have struggled to charge for content is because they need to charge either all (i.e. pay the entire subscription fee for all the content) or nothing (which sometimes, for some of the not-so-smart-organisations, then results in many ugly, non-targeted banner ads and pop-ups everywhere).

All of the sudden, with m-payments, there is an economically viable way to charge arbitrarily small amounts of money per article, section, hour, video play, archive access, or maybe even news alert.

If micro-payments take off, then I can begin to see interesting possibilities. Media companies may start paying commenters for their input. Imagine a comment post that passes a certain number of votes, receiving a tiny fee. Maybe powerful celebrities will retweet a news brand’s promotional football tweets, thus receiving a fee linked to the number of people reached.

A Swedish payment company thinks it can “save newspapers.” Their words. That claim caught my eye of course. But there is something interesting here.

In the UK, many newspapers see circulation numbers declining when only charging less than a cup of coffee on cover price. But, payment company Klarna thinks it has built a tool that can help ease newspapers’ transition to digital, and they feel it could ultimately save the industry. Indeed!

The company thinks its one-click payments could revolutionise the way we consume media online and on mobile. It built the business around the idea of shifting payments until after you’ve bought something online, rather than before. It basically lets any retailer put the equivalent of Amazon’s “buy with one click” button on its site. Click the Klarna button, then input your e-mail address and post code. That’s it. You’ve bought your item.

The buyer then gets an e-mail asking him to fill in payment and delivery details. This method radically improves conversion rates’ – the percentage of people who actually follow through with a purchase after looking or putting it in their shopping basket.

The technology remembers your computer, smartphone, or tablet, meaning you only have to fill in payment details once. Next time you go to any enabled site, you can literally buy with one click. This has turned into a billion-dollar idea for Klarna and maybe a nuance that the direct billing industry in general might want to consider.

It has now started working with Bonnier AB, the Nordic media giant, to offer customers an easier and simpler way of accessing articles. Browsers visiting Bonnier sites can pay €1 for a day pass with one click and will soon be able to alternatively buy individual articles for small sums.

The company isn’t the first to try this. The New York Times, Wall Street Journal, The Washington Post, and News UK here in London have all recently partnered with Dutch start-up Blendle to offer micro-payments for articles. It incidentally just entered the German newspaper market on June 15.

Blendle says: “Lots of people have tried to do micro-payments but they all require you to download an app or sign up first. People don’t want to do that. If people see this complex subscription sign up, people will just go somewhere else, but if you can provide them with an instant ‘buy this article for 10p,’ they'd do it.”

Or, what if a writer programmes the ability for only 1,000 people to read a story, with the price for reading it increasing by say, one penny with each additional reader? Alternately, what if the writer of a story was willing to share a certain amount of royalty with fans who were willing to annotate and enrich the story with context, background, and trivia?

Today, the mechanisms to enable the above all involve significant programming effort and friction. But in the near future, a simple-to-use and understandable mobile payment mechanism can remove friction and make consumption, paying, and revenue-sharing all happen in the background.

Other options are:

  • Pay per issue: The moment the iPad hit the market in 2010 and fuelled the mobile app revolution, digital newsstands started popping up everywhere with every publisher in the world scrambling to get its titles up front and centre on readers’ tablets and smartphones. They provide a one-stop shop for readers willing to pay for news and offer some opportunities for publishers to count issues as audited circulation.

    But newsstands are losing favour with some publishers because they don’t offer the level of discoverability, subscriber growth, and reader convenience that publishers and consumers need.

  • Pay by time spent: There is a relatively new model being hyped that pays publishers based on reading habits of subscribers. The more time spent with a publisher’s content, the more money that publisher gets out of the “pot” collected from readers. We will watch that one …

The argument and cautions against m-payments is that the model breaks the typical monetisation dynamic by unbundling publications and selling articles by the slice to subscribers. Price per piece. This model could therefore be (argued by some) devaluing a publisher’s content. It introduces a level of “friction” in the content discovery process because readers have to decide, with each and every article they want to read, whether it’s worth the money.

On the surface, the model sounds “interesting,” but some think it might be leading publishers down the same path to pennies the music industry slid down nearly a decade ago if used in the same way.

It didn’t work for music (streaming music is cannibalising song downloads a la Spotify), it didn’t work for video, and it especially won’t work for news if the shelf life of an article has much less value to consumers than the evergreen media (i.e. those songs and movies) they consume multiple times.

That’s why, for instance, many journalists today are reportedly told to write articles without a date stamp if possible, to give the content more shelf life and “resurrectable” opportunities.

Many people are no longer interested in paying per tune or DVD; they are more interested in paying for a license to listen to any song or watch any movie on any device. The same might be true for certain media, which brings us to what could be called …

  • “Netflix for news”: Today, the most user-friendly consumption model for music, video, and news is the all-access/one-subscription model. A number of new digital magazine publishing houses are now considering some form of “Netflix for news” to their readers for a monthly fee.

    Currently, though, many offer just flat PDF-like replicas, created using off the-shelf, digital publishing solutions, and do not support frictionless discovery of content.

    They do little more than present images of a publisher’s content, which can’t be searched, shared, or enhanced with digital features. The value to users, publishers, and advertisers is limited at best.

Things need to change. But maybe seeing the opportunity for m-payments will accelerate that change. I think that a change will happen once publishers start to use push notifications better, informational e-mails for mobile screens better, creating a better experience all round such as by using data; creating tailored rich media offerings; getting closer; incorporating the concept of time, location, and context (TLC), etc.

This is indeed happening now, granted, more quickly for some than others, but it’s certainly starting to happen. Then the users see the added value and are more receptive to commercial offerings.

In many ways, I accept that, to some degree, what we are all doing here is looking at the Internet as if it was the mid-1990s and trying to predict the emergence of Facebook or Google. In the same vein, to say here in the early days of m-payments and visualise all the dominant companies and uses that are likely to emerge is, in fact, next to impossible.

What is important, though, is to drive this as a two-way street.

From the payment industry: You need education, education, education related to all things noted on your screen. Make it feel like a seamless experience for publishers and agencies to adopt, a new revenue source – this is a no brainer!

From the publishers and advertisers: Get closer, provide TLC, show a more personalised service to your audiences, enrich what you offer to your audiences, let them see the value – the value of spending time and/or money with you.

Embrace new digital, new creative ways to engage audiences. The latest creative advertising formats, for instance, can enhance the experience. Then, you can start to offer new payment methods effectively that are appreciated, not despised.

All this can happen quickly, too. We are at first base, indeed, but we can score a home run in a matter of weeks and months, not years.

There are highly skeptical audiences out there. I know from working inside The Telegraph in London when a paywall was introduced how tricky it can be to monetise audiences.

But be relevant, be contextual, be adaptive, and be closer than you’ve ever been. The rewards with monetising those audiences through payment solutions will get a whole lot easier.

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