micropayments as a reality check for news sites

In Digital
Media Lost the Newsstand. Micropayments Are the Obvious Way Back,
Rick Bruner makes the case for giving micropayments another try.

The internet has dramatically diversified reading patterns. In the
print era, readers subscribed to a small, fixed set of publications
constrained by geography, distribution, and cost. Today, thanks to
search, aggregators, and social sharing, readers routinely consume
journalism from dozens of sources in the course of a month, including
international and niche publications that were previously inaccessible.
This has expanded total news consumption while weakening the economic
link between any individual reader and any individual publisher. As a
result, large portions of valuable readership generate little or no
direct revenue. Micropayments convert that fragmented, currently
untapped demand into incremental revenue without undermining the
subscription base.

And—like any other payments directly from readers—micropayments would
be a multiplier for advertising, not an alternative.

In a marketplace increasingly distorted by bot activity and opaque
platform reporting, micropayment histories give publishers a powerful,
independent way to demonstrate the authenticity and engagement of their
audience, strengthening their position with advertisers and supporting
premium pricing.

The 404 Media team explains the value of a known human
audience in We
Need Your Email Address. Meanwhile, Subscription
revenue is growing at big news publishers even as traffic shrinks,
and that’s good news for legit sites—stuck in a struggle for ad budgets
with Big Tech oligarchs who want to bury us in deepfakes,
extreme right wing bullshit and AI slop until
nobody trusts anybody.

Clay Shirky’s old argument
against micropayments from 2003, based on mental transaction costs,
doesn’t work so well any more. We know that micropayments can work
because mobile games are a thing. Shirky was probably right for the
micropayments of his day, but mobile game developers have figured out
how to get people to spend money on in-app-purchases (IAP), by turning
it into a two-step process.

• exchange real money for in-game coins—which feels like you’re not
  spending, just exchanging one currency for another.

• exchange in-game coins for an in-game asset—which feels like
  you’re not spending real money.

A brilliant cognitive trick that works in all kinds of games. Of
course, it doesn’t work on everybody. Figure about
half of adults play mobile games, and about 80 percent of those make an
in-app purchase. But if the numbers for a pay by the article system
were similar, that would result in enough payment records to enable an
advertiser to tell a legit site—where somebody spends a coin every so
often—apart from an AI slop site.

So it doesn’t seem like micropayments are necessarily unworkable⁠—⁠and
with a powerful industry devoted to pushing misinformation and slop,
legit content needs every human attention metric it can get—but the
tricky part is how to introduce micropayments. Publishers look at their
subscriber metrics and realize that a lot of subscribers read few enough
stories that they would save a lot of money by canceling and using
micropayments instead.

So it might be better to introduce publisher coins as a bonus feature
for subscribers, then let them leak out to non-subscribers. Instead of
saying that you get 5 gift articles per month, say a gift article is 20
coins and you get 100 free coins a month. Then open them up to more
uses. Another good lesson from how mobile games handle IAP coins is that
they hand out a few to non-buyers to help develop the habit. As part of
a direct sold ad deal, legit sites could issue a stack of coins to legit
advertisers, to hand out to customers, event visitors, and others.

Measuring marketing is already hard enough without a determined set
of adversaries in the picture. And with Big Tech under pressure to
obfuscate and enshittify every data flow, marketers will need to look
harder for trustworthy information. Rick
Bruner again:

ROI for most advertisers is falling in inverse proportion to Big Tech
valuations going up. Advertisers are steadily paying more for less ROI,
and Google, Meta, and Amazon are laughing all the way to the
blockchain.

If there is one thing marketers have even heard about causation —
which, of course, is the ultimate point of advertising, causing
consumers to buy your product who wouldn’t have otherwise — it is that
correlation is not causation. But AI, you see, is nothing but
correlation. Very fast and very sophisticated statistical inference. The
fact remains that to truly know what is having an effect, you need to
conduct a randomized experiment: subjects assigned at random to a test
or control group, presented with an intervention where they are either
treated or not with the stimulus of interest (the ad), and measured
against the outcome of interest (incremental sales).