Are media micropayments back?

Abhishek Dadoo
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January 10, 2023
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Digital Subscriptions
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Are media micropayments back?
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This article was first published by INMA on 15th December 2022

The truth is micropayments keep coming back over the years, but they never really take off. Is it the perfect storm this time?

As CEO of Fewcents, this is my world, but surely some of you might be grappling with how to evaluate the use case for micropayments in your organisation. This is my attempt to help you cut through the chase and think through this with a principled perspective.

Let’s start off with some consensus: Users like things simple and free.

Micropayment options need to be seamless and easy for the geographic region readers are in.
Micropayment options need to be seamless and easy for the geographic region readers are in.

Hurdle 1: Readiness to pay

Given that users prefer free access, let’s first evaluate if the market is ready.

With ad-supported revenue models in online media taking a nose dive, it is clear that direct reader revenue models will become a significant revenue line item for publishers going forward. If this conjecture were not true, then audience platforms like Snapchat, Instagram, Twitter, and YouTube would not be experimenting with reader revenue models themselves.

On the other hand, most users are now conditioned to pay, but only for what they perceive as quality content. So, it’s fair to say that spammy headline publishers are going to struggle in this new world order.

Hurdle 2: Need to consume

I am not going to profess about the idea that “print is dying.” That’s a given even though print might float some boats for a while longer.

Rather, it’s important to focus our efforts on users’ appetites for digital content consumption. We also need to consider the massive fragmentation underway for digital content.

With new media and creators popping up every day, it’s a no-brainer that content fragmentation is exploding. The mobile Internet has made everyone a global citizen. It allows users to consume digital content all day and from anywhere in the world. This combination — the user appetite for content and the fact content is everywhere — gives rise to definite subscription fatigue.

Hurdle 3: Segmentation

Not all your users are potential subscribers. If they have subscribed to a similar publisher already, then the chances of them committing to your subscription are slim.

This means bite-sized access powered by micropayments has a play only if you, as a publisher, can identify who the people are who never subscribed (“never subscribers”). Some proxies for this could be users who have rejected your subscription offer before, users from international markets, or users referred via social media.

Hurdle 4: Simplicity in payments

This is an often-overlooked aspect by most publishers. “We use Stripe” is just not good enough.

Never subscribers are casual beings on your Web site. They don’t want to sign up with every publisher Web site they land on. They could be from areas where Apply Pay and Google Pay might not be popular. And, hence, pulling out their credit card is unlikely for bite-sized access. Even if they did pull out their card, it might only work for domestic consumption unless international payments are activated on the card.

Never subscribers want the option to use Venmo or other equivalent options popular in the country where they live. They want a common identity across all the sites they casually visit. They want to be able to store value in a regulated e-wallet so they can access a one-click checkout as they hop from publisher to publisher. The e-wallet ought to be regulated as we don’t want another FTX saga to play out, do we?

Hurdle 5: Simplicity in discovery

When was the last time a friend recommended a piece of content or you discovered a link on social media and you were taken to Apple News or Blendle? Never.

Users always land on a publishers’ Web site. Sure, some users might start their journey on Apple News or Blendle, but, in that case, its purely a content syndication play for publishers. In a content syndication play, you don’t own the audience. Period.

What really matters is the publishers’ ability to offer bite-sized access and micropayments on its own Web site. This is where they own their audience and have the ability to start a “paid” relationship with never subscribers and potentially convince them to stop their subscription elsewhere. As a publisher, if you keep metering your paywall, there is no incentive for users to cancel their subscriptions elsewhere.

Verdict

At Fewcents, we think it is the perfect storm for micropayments to finally take off. Of course, views are biased, but certain truths don’t go away: Users are ready to pay. Their need for content consumption is massive. Publishers have good technology to segment their never subscribers. Simplicity in payments is possible. And, finally, discovery simplicity is in the best interest of the publisher.

Abhishek Dadoo,
Co-Founder

Dushyant Khare
Co-Founder

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Abhishek Dadoo

Abhishek is a seasoned business leader and technology product manager. He has worked in management consulting with PwC and Altman Solon in Boston, USA before moving to Singapore permanently. In Singapore he has held roles in market development with Ericsson and DHL before branching out to start his own venture, Shoffr, a digital marketing solution that provides online to offline attribution for digital marketers. In 2019, Abhishek sold Shoffr to Affle, a publicly listed ad-tech company in India.

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