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Content payments

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Short discussion of online payments, beginning of a longer piece.

Short discussion of online payments, beginning of a longer piece.

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  • 1. Content Payments Discussion - Micropayment Platforms Draft 26 October 2010 Kuala Lumpur, Malaysia
  • 2. 2 Agenda  Content Payments – The Problem  The Landscape – Who Plays Where?  User Cases – How to capture the paying audience?  Potential Solutions Source: Alexa, June, 2010
  • 3. 3 The Problem: Content creation online faces an ongoing crisis.  “Complex” content creation requires multiple specialized skills to produce: - Music production - Narrative video – documentaries, long-form news casts - Animation - Journalism – investigative, feature, …  Advertising alone unlikely to support continued creation of “complex”content - Low-cost publishing platforms continue to expand supply of available ad inventory - Advertising networks continue to expand; ad units increasingly commoditized - Result => Ad pricing (eCPM’s) decline  Goal to create a payment platform for consumer support of complex content as a complement to advertising  Rapid changes in distribution and payment technology; innovations in payment method (donation, purchase, rental, …) create a challenge for a single payment infrastructure Source: Google Analytics, 2010
  • 4. 4 The Landscape: Multiple payment options exist; but none are perfect Examples Donations Purchase/Rental Access - Spot.us - iTunes/iBook - FT.com - Kachingle - Amazon/Kindle - WSJ.com - Paypal - Adobe Android - Android Microfunding forcoverage plans (Spot.us) Creates instances of content on proprietary platforms: Grant access and interaction during a period Donation based on visits - Limit distribution by device (Kachingle) - Limit copies allowed Paypal Donate Button - Limit interaction allowed Revenue streams episodic Distribution limited by platform Managing access creates planning difficulty Platform costs None Must use platform functions Must tie into CMS - Site (Kachingle, Paypal) - Content package: - Site - Story/Project/Site (Spot.US) + Magazine Issue + Brand or Site + Complex Content package DescriptionIssuesTech Unitof Sale Limited micropayment options available
  • 5. 5 The Landscape: Multiple platform layers create complexity for a unified payment platform. Web Mobile Device ISP Mobile Carriers Device and Platform Vendors - WAP - Apple (iPhone/iPad) - SMS - Amazon (Kindle) - Google (Android) - WordPress - WAP Framework - ePub (Apple iBook) - Drupal - CMS - Digital Text (Amazon Kindle) - Vignette - RSS Feed - App Platforms - Internal Build - Internal Build Mobile Carrier Billing In App - Journalism Online (?) Storefront (Amazon, iTunes) - Credit Card - Credit Card - Credit Card - Paypal - Bank Draft - Retail Prepay DistributionPublishingCheck-outCash
  • 6. 6 User Cases: Multiple user cases also contribute to difficulties in building common payment platform.  User Case 1: Direct to Site - Subscriber Description: Site loyalist. Likely older demographic familiar with subscription payment options from traditional media. Model: Access model. Requires some periodic payment to allow access after N visits – “N-click free” Business Issues: Requires more complex management of access variables to maximize revenue, e.g. price, access level (N=?), duration of access, other content benefits. Other issues: balancing access versus need to generate ad inventory.  User Case 2: Search Engine Referral Description: Information interested/search focused. Likely 30 to 40 year old demographic. Accustomed to free information access through search. Model: Access model. (see above.) Business Issues: (see above)
  • 7. 7 User Cases: (continued)  User Case 3: Referral from 3rd Party Content Site Description: Content researcher, site loyalist. Could be a small user case, individuals who are more likely to follow a related link from “branded” content than going back to search engines to follow next most relevant link. Very few working content networks today – BlogBurst, Helium Model: Referral feeds, from one content website to another. Business Issues: Requires a content network of relatively unique content and services. Referral technology will need to equal or exceed search engines.  User Case 4: Social Network Referrals Description: Trusted referrals. Likely youngest demographic; accustomed to paying for some discrete content online, e.g. social games (Zynga), virtual goods (QQ), music/ringtones/wallpapers. No tradition of paying for content. Model: Personal referral fees. Viewer sees referred link, pays for access, access payment split between referrer and the content source. Business Issues: Building revenue layer on top of social networks – FaceBook and Twitter. Creating “value” for this social audience that will result in payment.
  • 8. 8 Solutions – Mobile App Search App for Complex Content: Description: Develop a mobile app for distribution through the major App platforms, iTunes and Android. The app will provide access for content from publishers for a micropayment from the consumer. Consumers can carry a sum in a “wallet” attached to the app. Elements of the Solution: 1. Search engine and feed intake platform for publisher content 2. Mobile/Tablet App to allow search, discovery and access for particular content 3. Ability to upload and hold a sum of money that will be used to pay for the individual articles accessed. 4. Allows for publisher apps to cross market to users who consistently access articles from a publisher. Revenue Streams: - Micropayments form search access -“Priority Listings” – publisher buys into top slots for some search terms - Publisher cross marketing: Allows the publishers to cross market their own apps. Comparables: - Zinio App (iPhone and iPad); NewsRack (iPhone, iPad); World Newsstand (iPhone, iPad), …
  • 9. 9 Solutions – Social Network Referrals Social Network Referrals: Description: Develop a referral network that will reward Twitter and Facebook users for referring a story to their networks as well as reward the producer of the content for the referral. Elements of the Solution: 1. Pricing mechanism for the individual articles. A dashboard content marketers can access to price and manage individual pieces of content. Or whole blocks of content. 2. API Access to link distribution and click rates. Will need to build a social tree of link referrals and click through for the referral. 3. Will need a wallet or payment mechanism that ideally crosses the major social networks – Twitter, Facebook, … [Could begin with only one of the two major servcies.] 4. Will need some kind of influencer dashboard for leaders in the referral of content Revenue Streams: - Micropayments from content referrals. Comparables: Affiliate programs like Commission Junction.

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