Since the inception of the Internet, the path to content monetization has always been a goal that has not been easily achieved, and one that is constantly evolving.
For the individual user or small publisher, the dreaded credit card “Paywall” is not an option for various reasons. The truth is that paywalls are for very big players, large publishers and media conglomerates like the Wall Street Journal, Bloomberg, Apple or Amazon. To achieve success with a paywall, publishers and content providers need a huge following, a great deal of capital investment, and technical infrastructure that is advanced, secure and has redundant systems. More importantly, a paywall is an Internet traffic killer.
As technology continues to evolve and becomes more disruptive, more and more options are arising for small content producers to achieve a degree of monetization with less operational cost. One of the growing trends in content and social media monetization is micropayments or online tipping.
Having launched in 2010, Swedish microdonation provider Flattr is the pioneer in the online tipping space. The service requires users or tippers to sign up and fund their account with cash, which they can use to tip content creators or site publishers that place a Flattr button on their site. At the end of the month, money in a user’s account is distributed equally among the sites that the user has selected. However, Flattr takes 10% of the funds that are tipped, which is a substantial deterrent for small publishers, content producers and artists.
A competitor, tiptheweb, is a similar service but does not take a cut of the funds “donated” to content providers or web publishers. The tipping platform is a non-profit and, for its own revenue, relies on tips from users. In addition to content providers and bloggers, tiptheweb enables tipping of video content on Youtube and Vimeo, presentations on SlideShare, and software on Github. The drawbacks for tiptheweb are questions of privacy and third party payment. Ultimately, user data is retained on the tiptheweb servers, and users still have to use Paypal, Amazon and/or credit cards to add to their tiptheweb account balance.
That is the problem with using fiat currency as it always requires a third party payment provider, bank and/or credit card company. There is a reason that luminaries like Walter Isaacson, former chairman of CNN and managing editor of Time magazine, foresee digital currency technologies being the payment disruptors and monetizers for good quality content for small providers like individuals and small businesses
Isaacson wrote in Time magazine:
The innovation that will shape the coming year, I think, will be the consumer use of digital currencies, such as bitcoin and its derivatives. Companies such as ChangeTip, BitWall, BitPay, and Coinbase – as well as other digital wallets that make use of cyber currencies or loyalty-points/miles currencies – will empower creators and consumers of content and wrest some power from the Amazons, Alibabas, and Apples.
Indeed, ChangeTip permits users of digital currency to send micropayments across social media, for video content on Youtube, and through email and texting. ChangeTip even offers a tipping widget available on blogging platforms, called Tipworthy aims, enabling bloggers to be rewarded with digital currency from readers. You do not need a credit card, Paypal account or Amazon account. Since being founded in 2013, ChangeTip has grown virally, apparently achieving connections with more than 50,000 social networking accounts by the end of 2014. Nonetheless, critics of ChangeTip are still concerned about users’ privacy, as it is not clear what user data ChangeTip retains and more significantly a user might end up linking all their social media profiles unintentionally through ChangeTip. The platform is also just another third party, requiring you to set up a tip url and tip button to raise funds. Thus, it is a centralized business model utilizing the decentralized platform of bitcoin. Their business model is ultimately not sustainable. Changetip’s original plan was to finance its business with a 1% fee on all transactions that take money out of their system. This is why the company is actively pivoting its business model. In September, they added credit card support and began offering dollar tipping.
The ascending competitor to ChangeTip is Protip, which in contrast only requires a website publisher or content creator to have their bitcoin wallet address somewhere on their page. Content creators don’t have to do anything else but produce their content., ProTip brings payments directly to the browser allowing artists and content producers to be rewarded for their work. When a ProTip user pays the site a visit, the app detects the bitcoin address and tips you at the end of the week. The tip is based on the time an audience spends enjoying the content. For the content provider, there is no sign up form, and no need for a plugin or widget to be installed. Protip is platform independent, working on YouTube, Soundcloud, WordPress/Blogger, Tumblr, Twitter, Deviant Art, Flickr, Patreon and self-hosted websites. The app also enables weekly subscriptions and premium content passes for loyal users. ProTip does not collect or distribute any data from users and relatively secure in that the private keys are stored on the user’s own computer, in a datastore that only ProTip can access. At the higher level of security, the private key is encrypted with a password. Protip has completed one crowdfunding campaign on Indiegogo, and currently has another on Startjoin. The founders are not seeking funding from venture capitalist, and seem to want the platform to be as decentralized and autonomous as possible.
Venice, California startup Popchest is also a micropayments enabler but has a different model. Focusing on primarily video and audio content, Popchest is permits its content providers to get paid directly in real-time for every view. The founders of Popchest hope to relieve the frustration among artists who feel they are not getting their fair share of revenue from platforms like Youtube, which brings in $5 billion a year for Google. The platform permits video producers to add a bitcoin payment to content posted on Youtube and other video hosting websites. The founders also plan to develop Popchest for set-top devices such as Roku, Chromecast, and AppleTV. The app is web-based, built around HTML5, thus is natively mobile-friendly.
Founded in 2013, BitWall also helps publishers monetize their content and promote their website at the same time. Through a paywall, readers can tweet to get a three hour pass to content, pay for a daily site pass for three cents, or pay for a single article for one cent. Through the “Twitter-Wall”, readers can send out a tweet about the publisher to unlock three hours of site content. Readers can also opt-in to view a pop up ad for five seconds to be granted access particular content. To implement this service, content publishers need only to insert one line of code and start engaging customers. What is intriguing and worrying about BitWall is that, even after two years, the company has not worked out a pricing model for merchants. The company also started out as an bitcoin payment provider for publisher’s content but no longer mentions the digital currency on its website.
Two crowdfunding platforms, Patreon and Beacon Reader, are also worthy of note as they have become popular for monetizing different types of content. They are distinct from typical crowdfunding platforms like Kickstarter and Indiegogo while they offer recurring or continuous crowdfunding opportunities to content creators.
Patreon is popular crowdfunding platform with YouTube content creators, musicians, and comic artists. It enables patrons to donate a set amount of money every time content is created by an author or artist. The platform has had its ups and downs. Although it raised around $17.1 million and has attracted many artists, in October 2015, the site was hit with a huge cyberattack resulting in almost 15 gigabytes’ worth of password data, donation records, and source code being stolen. The breach exposed more than 2.3 million unique e-mail addresses and millions of private messages. Patreon also takes a 5% commission on pledges from followers of content creators.
Beacon Reader is similar to Patreon but it exclusively funds journalists and their projects. The platform permits readers to support and access high quality journalism. Users can browse through different authors and their projects on Beacon Reader. If they find one they like, they can buy a subscription. There are different subscription levels but the base price is $5 per month. The subscription actually permits the user to have access to the full array of Beacon content, including all authors’ works. However, the specific project of a specific writer that they support will get the “vast majority” of their payment. Writers get 85% of their subscribers’ monthly fees, while Beacon takes a 15% cut. That seems a lot. Each month, bonuses are awarded to the authors’ of the top stories. Payments from users are completed through credit card, PayPal and Amazon transactions.
At the end of the day, the most compelling platform for individual content creators, new artists or small publishers is one that facilitates revenue generation without significant costs. The risks in using Patreon and Beacon is that as a publisher you are almost captive to the platform, relying on its policies in regard to distribution of content and fees. The advantages of the digital currency oriented options for content monetization is that they are low cost. Indeed, “neutral” platforms like Protip completely eliminate third party charges, and would be particularly compelling if they remained decentralized and became entirely autonomous. The drawback is that, without mass adoption of digital currency by Internet users, publishers and content creators are significantly limiting their paying user base by relying on it alone.