Facebook Could Fix the News Industry With Micropayments
By JEFF JOHN ROBERTS 6:30 AM EDT
It’s a problem that’s long flummoxed media outlets, and also one that’s increasingly frustrating consumers: The inability to pay a small sum, such as 25 cents or $1, to read an article online.
Yet a breakthrough could be near, as big web platforms like Facebook and Kik are building technology that could mean a new revenue stream for news outlets and an alternative to consumers having to hand over their credit card information to read a single story.
Before explaining how Facebook could finally crack the problem of so-called “micropayments,” it’s worth noting this issue has been around almost as long as the web has. As Wired reported this year (ironically, the article is behind a metered paywall), the early world wide web anticipated such payments and even created an error code—similar to “404 Page Not Found”—called “402 Payment Required.” That 402 error code, however, is still “reserved for future use.”
My colleague John Patrick Pullen raised the same issue of micro-transactions in a Fortune article published back in 2010, asking if online media couldn’t copy the casual, social gaming industry, where players easily bought digital loot. That was nearly a decade ago, yet there’s still no easy way to pay for access to a one-off article by clicking a button in your browser.
According to Mathew Ingram of Columbia Journalism Review, the problem with micropayment technology in the early days was that it involved too many middle-men, making it unready for prime time. In an interview with Fortune, Ingram says that media companies dislike collaborating with each other, which means that no one could agree upon a common standard for consumers to pay across different sites, back in the day.
But things have changed in technology since then, most notably the arrival of blockchain has begun offering an easy way to spend and keep track of digital money. The most famous blockchain is Bitcoin but, for a bunch of reasons, it’s not the best candidate to solve the online payment problem.
Enter Facebook. The social network has been working on a not-so-secret plan, Project Libra, to build a blockchain of its own, which will come with its own currency—something that will likely be called Facebook Coin. The company is being coy on how exactly this will be distributed, but it’s a good bet every user could receive a small batch for free, and then be able to buy more coins or else earn them by doing tasks like watching ads (which, admittedly sounds like something out of a Black Mirror episode).
If this is what unfolds, it could finally solve the problem of micropayments by giving everyone something they can easily spend and, on the other end, provide online publishers with an easy way to get paid. For practical purposes, this means that a year from now, those obnoxious paywall pages will give you an option to subscribe with a credit card—or just click to pay for a one-off read. Meanwhile, websites could slide prices up and down in hopes of converting casual readers into paying subscribers.
Facebook declined to comment for this article, but Kik, recently issued its own blockchain-based coins for its millions of users to spend. According to CEO Ted Livingston, the idea of using Kik’s currency for micropayments isn’t just technologically possible—it’s a matter or time.
This suggests a time, not far off, when consumers might hold a number of online currencies that can be easily spent around the Internet—not just for news stories, but for videos or creative works like poems.
As for media companies, there’s reason to be wary, given how Facebook has previously, repeatedly burned them by promising a source of revenue, and then taking it away. Nonetheless, the prospect of getting some money rather none when a casual reader encounters their paywall should be a powerful incentive to at least try it out.
Ingram, meanwhile, says he is unsure if easy blockchain payments for news will catch on, in part because there will likely always be a free version of any given news story, and because of a “psychological friction” that impedes people paying for content.
“Someone once told me that micropayments was an idea ‘that has a lot of potential — and always will,’ meaning of course that it will never actually happen,” he says. “I would love to be proven wrong though.”
North Korea amps up currency scams to raise funds, avoid sanctions, report says By Brooke Crothers | Fox News Curated By Blockchain Life North Korea is turning to cryptocurrency scams to raise money and circumvent sanctions, a […]
Facebook a Bank? Congress Investigating Crypto Emergence Facebook a Bank? Congress Investigating Crypto Emergence Derived from an Article: By Kurt Wagner and Julie VerhageWith assistance by Austin Weinstein, Benjamin Bain, and Robert Schmidt Facebook a […]
Scamming BTC by Terror? A new scam is making the rounds that promises to disrupt countless offices and schools. The scam is simple: the scammers send an email threatening to detonate a bomb if they don’t get a certain amount of Bitcoin […]