Last night, it was revealed that Google is working on a micropayment system for newspapers. The plan sounds like it might just save the dying industry while accelerating the death of many publications. But, it's okay. That's probably a good thing.
The plan was outlined in the search giant's eight-page response to the Newspaper Association of America's request for paid-content proposals. The news was first reported Wednesday evening by Harvard's Niemann Journalism Lab. In a nutshell the plan would charge readers one fee to read content on a bunch of different websites. Google would skim 30 percent of the top, and the websites would keep the rest. Google calls it a:
"vision of a premium content ecosystem" that includes subscriptions across multiple news sites, syndication on third-party sites, accessibility to search, and various payment options, including small fees for access to individual pieces of content (known as micropayments).
The reason the plan has a chance at succeeding where other similar efforts, such as Journalism Online , might fail is twofold: scale and ease-of-use. Journalists often lament having ever offered free content online. They argue that it's too late to start now, because, if the competition doesn't start charging -- and users don't take the initial leap by creating an account with you -- you risk losing your readers altogether.
Enter Google. The search giant is probably the only company that has the reach to introduce a new product on an all-Internet scale. According to various Web statistic-gatherers, Google owns 16 of the top 50 visited sites and accounts for almost ten percent of Internet traffic (check back for a post I've got in the works on this).
Google hopes that readers sign up for the Google account because they trust the company and they know it will probably be the only such account they'll ever have (or want) to create to read the Internet for money. Many users will undoubtedly stick with free publications, but if Google can create a low barrier to reading paid content on the web that you can't find anywhere else for free, you could expect a pay-to-read model picking up steam, and cash.
Google's proposal is fairly vague -- the "Business Model" paragraph is about three sentences long and has no numbers in it -- but the company expects to share revenue much like the iPhone App Store, where Apple skims 30 percent off the top and the developers keep the other 70. This kind of Darwinian model could be good for newspapers. It offers them more money and it forces consumers to choose to pay for what they read. When your options cost nothing, you don't have to justify your choices. When you have to pay cash, a finite good, suddenly you have to hold yourself accountable. People might read TMZ instead of The New York Times when both are free, but once they start charging, my guess is enough people would shell out the money for the Times.
Don't get me wrong, micropayments may not be the solution to the
industry's woes, but with Google on their side, it's a risk newspapers
can't afford to pass on. And, if Google doesn't succeed, it's hard to
imagine anyone else will.