Friday, August 20, 2010

Micropayment As A Business Model To Monetize Content Generation

Have you heard about Flattr? I have recently read an article about it and I found the idea very interesting. Indeed, I am still skeptikals sometimes on the way you may have a profitable activity out of generating content on the web. A lot of newspapers are seeing their revenues falling because of the Internet: Not only they have fewer readers which pays the actual newspaper, but the revenues they generate from their website is way too few.

Another example would probably this blog, as any other blog. I spend a lot of time looking for information, ideas, which I could share here. And writting blog posts often during the week is time consuming. Do I get any money out of it? No. Actually, it is not meant to be. I write this blog because it allows me to share my ideas and opinions with other. I have met a lot of very interesting people thanks to it, and I still do. But if you really think about it, the articles I write could easilly be worth money if I was working for a newspaper/magazine.
Now, the professional news industry need to find a way to monetize its content. If not, information might get actually of bad quality. This is the same thing for all kind of art wich is present on the web: music online sharing has resulted into a decrease of music labels revenues, whereas we have never consumed more music! I have already discussed on this blog about Ruppert Murdoch which is willing to find a way to monetize its websites.

How does it work?
The user decides an amount of money he is willing to pay each month online for contributions he would have liked. Then, contributors can get a "Flattr" button to put on their sites. Each time the user click on it, it will give a part of its money. The total amount he was willing to pay on a month will be divided by the number of times it clicked on a button, and hence will split the amount given.

My thoughts
It reminds me a little bit the system Radiohead set for their new album: It was free to download, and people could make a donation if they liked it. The concept seems great, but would it be fair? Will people actually be able to make a reasonable amount of money thanks to it? I believe it could be interesting to see how it helps bloggers or other people to go on with their activities, and also if it will make them improve the quality of their posts.

What I like about the idea, it is that the user agrees to dedicate a part of its revenues to share with people it reads. That means that at some points it considers the information it consumes has a real value, as good as the one it reads in a newspaper.

How much revenues could you get?
Thanks to the system it seems difficult to get real revenues out of it. For example, let's say you aim to get 1300 € per months thanks to it, which is the minimum wage in France. If you start with the assumption you get 2€ per users (which is the minimum amount you may get per months on Flattr, you'll need at least 1000 real fans to get a minimum revenues.

I wish this service a great success, because it will probably be a first step to a new way to monetize information. And you, what do you think about it?