Could Micropayments Fill the Revenue Gap Between Member and Nonmember?

Micropayments, a still relatively untested approach to tying content to revenue online, could benefit publishers—like associations—that are focused on niche content, experts say.

Perhaps you have a paywall for your online publication. Perhaps you give away your content for free. Is there room for something in between?

Recently, the micropayments model has started to resurface in the publishing world as a potential revenue option for digital media outlets. It’s not entirely new, but it hasn’t quite caught on like, say, the metered paywall has—even though it could potentially be valuable for organizations with unique content offerings, like associations.

Startups have tried a variety of experiments to see if users would be willing to pay for individual stories occasionally—with one notable experimenter, the Dutch startup Blendle, moving to premium subscriptions last year.

Despite challenges with micropayments, some experts still think the strategy could take off. Esther Kezia Thorpe, a British media analyst and podcaster, recently argued in a blog post for What’s New in Publishing that micropayments could yet turn a corner.

“Micropayments need to reach the point where enough people have come across them to know how to respond to them,” Thorpe said in an email. “At that point, we can get actual useful information on how they are used and where the key friction points are.”

Dominic Young, the founder of Axate, has been trying to identify those friction points. A media veteran, he founded the micropayments platform in 2017 out of concern that many publishers were being forced to make decisions that were at odds with a good reader experience.

“When you look at it from the consumer’s point of view, if it’s an ad-supported site or product, typically it actually has to be borderline hostile to the user for the publisher to be able to make money,” Young said. “And the content isn’t necessarily generated to delight the consumer. It is generated to drive data and traffic.”

Since Axate’s launch, Young has signed up numerous newspapers and digital media outlets for its wallet model, which allows users to store a certain amount of money for reading publications and use it as desired. Trade publications have expressed interest as well, he said.

Content before Membership

Micropayments could provide a revenue opportunity in cases where people have a personal or professional interest in an organization but aren’t ready to pay a yearly membership fee, Young said.

“They have a core group of members usually, in the case of associations, who are signed up, they’re paying fees every year, and they’re getting access to lots of stuff,” he said. “They also have, usually, quite a large multiple of that number who, for one reason or another, have an interest in engaging but can’t justify becoming a member. They don’t have enough of a professional dependency to pay what’s usually relatively high membership fees.”

Thorpe agreed, noting that membership or subscription strategies, while useful for raising revenue, may often capture only around 5 percent of an audience.

“That means there are another 95 percent of people who may find the content useful and interesting, but not enough to want to sign up for a full membership,” she said. “Micropayments are just one of the ways to capture this more casual audience, whether that’s asking for small voluntary donations or putting up a micro paywall around single articles or specific content pieces.”

How exactly that looks, though, is in the eye of the beholder. For a traditional newspaper, it may make sense to put micropayments on the front of every article, Young said, but for more specialized sites, the focus may be on a few high-value content pieces, such as a guide with specific how-to information or a long-form article featuring deep reporting.

“We don’t come in with an ideology that says we think we have solved everybody’s problems here,” Young said.

(Jenpol/iStock/Getty Images Plus)

Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

Got an article tip for us? Contact us and let us know!