friction – Nieman Lab https://www.niemanlab.org Tue, 02 May 2023 18:06:59 +0000 en-US hourly 1 https://wordpress.org/?v=6.2 Micropayments. Elon Musk thinks he’s got a “major win-win” for news publishers with…micropayments. https://www.niemanlab.org/2023/05/micropayments-elon-musk-thinks-hes-got-a-major-win-win-for-news-publishers-with-micropayments/ https://www.niemanlab.org/2023/05/micropayments-elon-musk-thinks-hes-got-a-major-win-win-for-news-publishers-with-micropayments/#respond Mon, 01 May 2023 18:59:12 +0000 https://www.niemanlab.org/?p=214688 One of the remarkable things about watching Elon Musk “run” Twitter is the ability to observe his learning curve in real time.

People have been running social platforms and media companies for literal decades, after all, all while Musk was busy with cars and spaceships and whatnot. A fair number of lessons have been learned! But Musk — so resolutely convinced of his own genius — has dedicated himself to making old mistakes new again, compressing a lifetime of bad ideas into six short months.1 It’s his most reliable pattern: announce a crazy new policy, preferably on a weekend; face huge blowback from users; reverse the policy, claim you were misinterpreted all along or just pretend it never happened.

So when I saw this tweet on Saturday afternoon, I wasn’t sure whether to laugh or cry.

Since embeds of his new longer-than-280-characters tweets don’t show the full text, here’s what it says:

Rolling out next month, this platform will allow media publishers to charge users on a per article basis with one click.

This enables users who would not sign up for a monthly subscription to pay a higher per article price for when they want to read an occasional article.

Should be a major win-win for both media orgs & the public.

Fiiiiiiiiiinally, Elon turns his attention to micropayments. (Pretty sure this is in the Book of Revelation somewhere.)

The idea of news publishers charging readers by the article is not a new one. At least once an hour, someone tweets about “why hasn’t anyone figured out how to let me buy one article????” Literally dozens of micropayments-for-news startups have come and gone; dozens of publishers have run tests of various models; none have gained much traction.

Even today, well into the 2020s, you can find people saying the dream is an “iTunes for news” that — as the iTunes Store did 20 years ago — allows you to buy a single song (an article) rather than the full album (a subscription). (They say this despite the fact that approximately zero people still buy MP3s that way; instead, they pay a monthly subscription fee to Spotify or Apple.)

I’ve long been a micropayments skeptic. Not because I have any philosophical issue with the idea; I’m all for publishers making money and readers consuming news. My skepticism is driven by it being a strategy that sounds appealing but works poorly in practice. Others have written about the problems with micropayments at great length, but here are, to my mind, the most significant:

Friction at the story level.

What do people do when they hit a news site’s paywall? We have some data on that question, from a Gallup/Knight Foundation survey last fall. They asked American adults: “Suppose you were trying to access a news story online and had to pay to keep reading or watching it. Which ONE of the following would you be most likely to do?”

48% said they would “try to access the information elsewhere for free from a different news outlet.” 28% would “move on to something else or to a different news story.” 7% would “try to find information about the news story on social media.” 4% would “sign up for a free trial if available.” 3% would try to “get the story through friends or family who already have access.”

A measly 1% would “pay for access to the story or outlet.”

In the overwhelming majority of cases, a person faced with the need to pay a news site money will say “no, thank you.” You can view that as an artifact of subscription models, or you can view it as evidence of how transient most news stories are in people’s information lives. It’s hard to evaluate how much an individual article is “worth” before you’ve actually consumed it — and there is always free competition available, either on the same topic or in the broader universe of “things to click on in my feed.”

Friction at the payment level.

If an individual publisher sets up their own micropayments system, getting money will require readers setting up an account, attaching a credit card, and all the usual stuff that moving money online requires. Not many people will do that to read a single news story.

So maybe they sign on to one of the many micropayment startups that want to create an industry-wide network of news sites using a common payment platform — either as part of a pan-publisher subscription or on a pay-per-article basis. Unfortunately, none of them have the scale to be appealing or the appeal to build scale. (“Just sign up with your NewzBux account!” isn’t much of a pitch to your readers if they’ve never heard of NewzBux, or InfoCents, or FactCoins, or whatever.) And the companies that might be able to start with scale (Google, Facebook) are not ones that publishers trust with their money. And whoever owns the pipes, they’ll want their 30% cut.

Most paywalls aren’t that hard.

In a digital universe where every news story is behind a hard paywall — one impenetrable to the non-paying reader — then a micropayments model might make sense. But that’s not the digital universe we live in. The number of completely paywalled sites is low and typically either hyperlocal (a county-seat weekly with no competition) or high-end (think The Information or Politico Pro). Nearly all news sites will let a random web user read a story (or two, or five) for free. It’s only after a given number of clicks that the wall goes up.

If you want to think of that as “news sites already offer micropayments for those first five articles — they’ve just set the price at $0,” be my guest. And for those times when someone really wants to read just one article, that free allotment allows all the paywall workarounds that the savvy digital news consumer knows about. (We’re all adults here; we can talk about incognito windows.) If most paywalls aren’t that hard, there’s little pressure for a paid product to get around them on a single story.

No one agrees on what micropayments are.

Is a micropayment 10 cents for one article? That was the number Elon Musk was thinking about in this video from November, when he complained that he should be able to pay 10 cents to read an especially good Philadelphia Inquirer story despite not living in Philadelphia.

If there is a sustainable price for journalism, it isn’t 10 cents an article. A large scale data analysis from Medill found that digital news subscribers don’t even visit those news sites on most days. For small local news sites, the typical subscriber visits once every three days. At larger sites, it’s once every five days. Those visits can include consuming multiple articles, of course, but the point is 10 cents an article would be a radical price reduction for most subscribers — and thus a radical revenue reduction for most publishers. Price points will have to be higher — and thus less appealing to fly-by readers.

Publishers don’t want to cannibalize subscribers.

It’s not at all unusual for a business to insist on their product being purchased in a particular quantity. Try to go to the grocery store and buy one peanut M&M, or one tablespoon of ice cream, or a single Corn Flake. They’ll look at you funny, because the businesses that manufacture those consumer goods have been structured around selling bags, pints, and boxes of them, respectively. Go ask the people at Tesla if you can buy a Roadster that’s only for the weekends — at 2/7ths of the price. The economics of information goods (like news) aren’t identical to those of physical goods, but they both require sustainable business models, and for most quality news sites, that requires paid subscriptions.

And that’s the root problem, from publishers’ point of view: If you sell subscriptions for $15 a month, but you sell individual articles at 15 cents each, you’re telling any subscriber who reads less than 100 articles a month they’re an idiot and should give you less money. There aren’t enough payment-willing fly-by customers to make up the difference for even a few lost subscribers. You’re encouraging your best customers to think of you as an occasional treat rather than a service you pay for — and to pause before every headline they click to estimate its worth in cash. It shouldn’t be surprising than “we’ll charge you $10 a month until you tell us to stop” is more appealing than “we’ll charge you 10 cents now and maybe you’ll come back again someday.”

As Tony Haile once smartly put it, news subscriptions are like gym memberships. Imagine a gym that charges $50 a month for a membership — but also lets anyone pop in for a single workout for two bucks. Why would anyone pay for a membership again? “If you would take the micropayments version of a gym membership, it would be like, ‘I can turn up and I can pay a couple of quid, and I can go into the gym whenever I want to use it.’ No gym works like that.”

All that said — these problems are not insurmountable. Smart people might come up with solutions, even if they haven’t so far. Indeed, I’ve long believed that if anyone could create a micropayment system for news that worked, there were only two real possibilities: Apple and Twitter.

With iPhones, iPads, and Macs, Apple controls the devices that most paying digital news consumers use. They have hundreds of millions of users’ credit cards already on file and attached to your identity. And with Apple Pay, they have a nearly frictionless payment platform that has already been integrated into countless apps and websites. If they decided to offer a “Read With Apple Pay” button for news sites, the technical problems of micropayments would mostly go away. (Along with 30% of publishers’ revenue, no doubt.) And Apple News+ is the closest thing to an all=news subscription that currently exists.2

Twitter, meanwhile, is the center of the digital news universe. There is no place online with more news-curious users clicking links to new-to-them news sites. And it showed interest in the subject, buying Tony Haile’s Scroll and integrating its network of ad-free news sites into Twitter Blue and teasing some sort of paywall integration on the way.

But that was the old Twitter. One of Musk’s first decisions after taking charge was killing off the remnants of Scroll — the closest thing to a foundation for a pan-publisher revenue model anyone had.

Unless you are one of the few Twitter Blue subscribers, Twitter doesn’t have your credit card number. It has no ready payment platform for publishers to integrate into their sites. Twitter would likely only be interested in a payment system that goes through Twitter, not via links that go to a publisher site from Facebook, Google, or elsewhere.

But let’s be honest: The biggest problem is Elon. What mainstream publisher would trust Elon Musk with their money right now? The guy who refuses to pay the rent on his corporate HQ? The guy who has spent the past six months dumping on the media, banning reporters, declaring their work a “relentless hatestream” from “media puppet-masters” that you “cannot rely on…for truth“? This is the guy who says he has a “major win-win” for publishers? The same guy that complains “media is a click-machine, not a truth-machine” thinks the answer is tempting people to pay with a single headline?

(Not to mention that Musk has no deadline cred remaining, and saying that micropayments will “roll out” later this month could mean this summer, late 2024, or never.)

Maybe someone will figure out micropayments for news someday. I think it’s unlikely at scale — but I could be wrong! But I am quite confident the man who has spent the past half-year destroying the news media’s favorite online space won’t be the one to do it.

  1. I believe it was Techdirt’s Mike Masnick I first saw using this metaphor for Musk, specifically around content moderation.
  2. Pro tip: Apple News+ now includes, along with roughly all the magazines, The Wall Street Journal, the L.A. Times, The Times of London, The Globe and Mail, and the metro dailies in Charlotte, Dallas, Fort Worth, Houston, Kansas City, Miami, Raleigh, Sacramento, San Antonio, San Diego, San Francisco, plus a few more. If you run into a random local-news paywall, there’s a pretty decent chance that searching for the headline in Apple News might find it. It’s now a much better product for newspapers than it was at launch.
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Snapchat’s new Discover feature could be a significant moment in the evolution of mobile news https://www.niemanlab.org/2015/01/snapchats-new-discover-feature-could-be-a-significant-moment-in-the-evolution-of-mobile-news/ https://www.niemanlab.org/2015/01/snapchats-new-discover-feature-could-be-a-significant-moment-in-the-evolution-of-mobile-news/#comments Wed, 28 Jan 2015 21:07:45 +0000 http://www.niemanlab.org/?p=105933 You may have missed it in the #snowpocalpyse that wasn’t1, but Snapchat unveiled a new feature called Discover Tuesday that puts news into the ephemeral chat app so popular among American teens and young adults:

Here’s Wired’s story on it:

At launch, Snapchat is working with ten media partners, including CNN, ESPN, and National Geographic. These companies will release a new edition of Discover content every 24 hours, featuring both videos and articles hand picked by their staffers. The goal for these media companies, of course, is to hook a new, younger audience that doesn’t often connect with traditional media.

I should confess here I am a 39-year-old man, which you can take as a pretty good indicator of my daily Snapchat usage (zero). But from playing around with Discover yesterday and today, it feels like a significant moment both for mobile news and for efforts to reach younger readers. We write a lot about how messaging and chat apps are a big area of growth for online life (and a big potential area of growth for online news). But that sometimes gets portrayed as something happening mostly outside the U.S. True, we don’t have anything as developed as, say, WeChat’s platform in China, and there may be less experimentation by news organizations on chat platforms here than elsewhere. But that doesn’t mean the shift in our audiences’ attention is any less real.

What’s impressive about Snapchat Discover? Three things:

It puts news where the audience already is.

Snapchat’s UX remains a confusing mess to me — it feels a little like that tone only teenagers can hear — but there’s no denying a lot of young people spend a tremendous amount of time in the app.

If you buy the argument that the share of consumers that regularly, purposefully seeks out news for news’ sake is relatively small — that a large portion of the audience has always encountered news through a mix of adjacencies, social vectors, habits, and accidents — it makes sense that news will have to be integrated into how people are already interacting with the broader universe of information. Putting news just a couple taps away from someone’s social life has enormous potential power. The chances of low-interest-in-news people getting some headlines and stories that way seems higher than expecting them to suddenly build a habit of opening your app every morning.

This is the same logic for news organizations being on social networks like Twitter and Facebook: Go where the audience is. And unlike those platforms, Snapchat’s Discover lets advertising come along for the ride.

It is completely mobile native.

These are not newspaper stories or TV pieces stuffed awkwardly into new containers. The “Snap” formatting — framed vertically like your phone, constructed as a single view, intermixing audiovisual elements, swipes to move between them — echoes what people see in their friends’ messages. It’s completely and utterly mobile; there is no web-native equivalent, and there likely never will be. The updated-once-a-day model makes the news contained, something you can finish. Constructing these snaps probably takes some producer a little time (I don’t know what native tools Snapchat is providing them, if any), but the effort pays off. Here are a few from CNN; in app, the first features music and animation, the second video and music, the third video of a brief looping live shot. (You can also see some of the motion graphic work in the video below by Robb Montgomery.)

snapchat-discover-cnn

The advertising feels just as native to the platform — another snap to swipe through.

It retains flexibility in form.

Each of those single-frame content teases can link to a bigger piece of content, which you access by swiping up. That content can be short or long, text or video. (The blizzard piece pictured leads to a story, the Auschwitz piece to a 1:46 video, the smart drugs piece to a 3:26 video.) Some are self-contained and don’t link to anything. The Daily Mail’s pieces link to classic Daily Mail-style long, scrolly, photo-laden stories. Yahoo News has Katie Couric voice all the teases. Vice’s section of the app includes multiple 15-minute-plus documentaries, on subject like the California drought and migrants trying to enter Europe. National Geographic has a quiz (though without any real interactivity — the answer’s just revealed by swiping up).

I’m calling this connection to a longer piece of content a “link,” but what you won’t see in here is a webview — the sort you’d see clicking a link on Twitter or Facebook and going to a publishers’ website. The content here all lives inside Snapchat. (Facebook’s dream for the web, basically. Or how Flipboard’s publishing partners appear differently in its apps.) There are obvious reasons why that could be bad news for publishers — loss of control, loss of flexibility in revenue models — but there are also obvious ways that a consistent experience across brands and stories could be appealing to users.

There are also obvious issues with the current iteration of Snapchat Discover. It’s limited to a small set of publisher partners, and it’s easy to imagine problems if and when it scales up — navigation problems, discovery problems, personalization problems. As theoretically flexible as the platform may be content-wise, putting news next to friends’ snaps would seem to encourage shorter stuff from most publishers. (Though I’d love to know how many of Vice’s longer pieces get viewed all the way through by Snapchat users.) The advertising model, while promising, is unproven — the swipe interface also makes it very easy to identify an ad and swipe it out of the way in less than a second. (Banners at least stick around while you read the story!)

But Snapchat is 100-percent worth watching for anyone involved in news — particularly those wondering how it’ll transition to phones. Last month, I wrote this piece that asked: “What will be the laid-back, low-effort experience that replaces TV news?” The Internet has been amazing for news junkies — there’s more available for us to seek out than ever before in human history. But it’s a different story for that larger group of low-effort news consumers, the ones who aren’t going to seek it out. The decline of newspapers and television news — both of which packaged civically useful news with a bunch of other stuff — has left them a little adrift, relying on what Facebook’s algorithms serve up or whatever else they can encounter via accidental osmosis.

I still don’t know what that laid-back, low-effort news experience is going to look like — but I can promise you it’ll involve content made for our phones, and Snapchat Discover feels like a step in that direction.

If you don’t believe me, ask some of Today’s Youth! John Robinson, the former editor of the Greensboro News & Record and now a lecturer at the University of North Carolina, is teaching a class on “Current Issues in Mass Communication” that asks its students to blog regularly about media. A number of them took up yesterday’s Snapchat announcement. While you shouldn’t extrapolate from these few college kids to all their demographic peers, it’s an interesting look at how some of Snapchat’s core users took to the feature.

Clay Sutton: “I just updated the app around 12:30 this afternoon, and I haven’t left it since. So far, I’ve watched an NFL season recap in 160 seconds, checked in on the wonderful weather in NYC, and went behind the scenes of a J.J. Watt/Katy Perry photo shoot. Discover seems to have something for everyone…Right now, I’m not even concerned with snapping my friends back. I’m too entertained by the fact I can get my Daily Show with Jon Stewart clips from the same place I can now watch ESPN’s Not Top 10.”

Liz Bell: “This is huge. Snapchat is adapting and showing that it’s here to stay — at least for a while. It’s not just a messaging app although it still feels personal and private (and something we can post to without our parents seeing). It gives perspectives to events — sports games, competitions, national holidays, wherever you wish you were — that you can’t get anywhere else. With Snapchat you are an insider and a contributor…Plus, it’s search engine/Facebook algorithm free. We see what they post. In the order they post it. This is different and matters. CNN’s head of social news Samantha Barry says she thinks this might be a huge step in finding how to reach millennials, hard news and all. I think she’s right.”

Emma vanBree: “It has definitely changed the game. Snapchat has the potential to be a real-time YouTube, and this app definitely capitalizes on that. It’s hard to say yet, but I think this update will really validate Snapchat as a media source and social media. I’m still amazed that they could fit all of this content into one app…Maybe having the news right here will help me to finally put some health in my media diet. But I do admit, I have only viewed the Cosmopolitan one, but here’s to hoping!”

Lauren Pershke: “To me, the introduction of Discover is a way to merge Snapchat into more of an intellectual news realm. While the majority of Snapchat’s users are under the age of 25, these users are growing up. As noted in class, there comes a time as a professional where sending selfies behind your desk is generally frowned upon and left up to the younger crowd (of this already young user base). By introducing news and entertainment sources, Snapchat is still proving itself useful to those who opt out of the selfies.”

Morgan Trachtman: “Discover will finally give Snapchat a way to make money as they will share ad revenue with their new media partners. I anticipate many more media channels knocking on their door hoping to gain a spot on the new feature…I think it’s the perfect way to get information to a younger generation that’s been too caught up in posting the perfect 10 second selfie than reading a newspaper.”

Amber Younger: “As for ads, I only ran into one. Much to my surprise I was able to slide it away immediately. Even if ads don’t become mandatory viewing in the near future, Discover’s layout paired with creative ad design could keep a user watching for a bit. The BMW ad I saw looked very much like another CNN story.”

Alexandra Arteaga: “Today I was able to watch a 5-minute National Geographic video about a couple in Panama that rescues sloths and release them back into the wild. Then I read ‘The Bachelor Recap’ post on People’s channel to catch up on everything I missed in last night’s episode. And then I read an CNN article on the Northeast’s ‘blizzard,’ which went along nicely with the “Snowpocalypse: Juno” OurStory. The fact that I was able to do all of this on one app speaks for itself.”

  1. At least for New York; we here in Boston still have a lot of shoveling to do.
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