Are micropayments a viable way to support the news business?

break-18987_1280Jane B. Singer, City University London

Journalism is in an existential crisis: revenue to news organisations has fallen off a cliff over the past two decades and no clear business model is emerging to sustain news in the digital era.

In the latest in our series on business models for the news media, journalist and academic Jane Singer looks at the use of micropayments.

Once upon a time, the gap between the relatively low supply of something in high demand – timely and trustworthy information – generated enormous profits for news publishers. But over the past 15 years or so, the digital, social and mobile revolutions have all but obliterated that gap.

In response, publishers have scrambled for new revenue streams, and much recent attention has turned to “micropayments” – the payment of a very small amount to access a comparably small bit of content, such as a single story.

The traditional media world is one of bundled information, with a lot of diverse content in one package that aims to provide something for everyone. The digital world, though, is an unbundled one. It enables each individual to select one item at a time from among the billions of things on offer. Are we willing to pay for this content? Sometimes yes – see iTunes.

But the question for news outlets is whether personalised news can follow the lead of personalised entertainment in generating interest and – in their fondest dreams – income.

Blendle is poised to take on the US market.

So far, news micropayment initiatives are – at best – a work in progress. The most buzz has been around a Dutch service called Blendle, which claims half a million registered users in Europe and is poised to tackle the US market. Most items on Blendle, which come from diverse outlets, cost between 10 cents and 90 cents and come with a money-back guarantee: you only pay for stories you actually read – and if you then don’t like them, you can ask for your pennies back.

The slick interface appeals to fans, as does the lack of advertising (and advertising’s attendant clickbait). But others have flatly predicted the concept is doomed to fail. News consumers want to pay nothing, they say, and even a very small amount of money is not nothing.

Who pays the piper?

But perhaps the model here is not an “iTunes for journalism”, if by journalism we mean big-name branded content. Perhaps a crowdfunding site such as Kickstarter offers a better template – the ability for users to stack their coins behind ideas they want to see developed rather than existing stories they want to read.

Experiments with crowdfunded journalism have proliferated. One flavour is essentially a low-cost membership model that allows its member – or donors – to steer journalists to topics of interest. MinnPost, a non-profit site in Minnesota, has made good use of this approach. For instance, a New Americans beat, which covers the state’s immigrant and refugee communities, was launched last October based on pledges from interested donors.

In Scotland, a new investigative journalism site called The Ferret also pursues topics that its users say they want; fracking was an early example. And in the Netherlands, de Correspondent drew donations of more than a million euros in just eight days simply on the promise of delivering high-quality stories about important topics rather than “the latest hype”.

The other approach reverses the process, in a way, and is closer to the familiar crowdfunding concept – journalists propose ideas they would like to pursue and users back the ones they like. Stories that meet their funding target get written; those that don’t, don’t. Perhaps the most innovative example came from a British site called Contributoria, backed by the Guardian Media Group. Over a period of 21 months in 2014 and 2015, Contributoria published nearly 800 articles on topics from urban regeneration in Beirut to a day in the life of a bookie; its writers earned a total of £260,000 over that time, most of it built up from quite small individual payments.


However, such experiments have proved hard to sustain. Contributoria closed in October 2015, with its co-founder declaring that crowdfunding was just one piece of the puzzle. What the initiative really showed, he told, was that people have a “voracious appetite … to be part of the journalism process, including the way it gets financed”.

Perhaps that is, for now, the takeaway point on micropayments. The desire being given voice is less about paying for journalism than for having a stake in it. News organisations fervently hope that stake will be financial, but for users, “ownership” of the news seems more important than the payment involved.

As information proliferates wildly, consumers are saying they want a sense of control over it. Digital media gives them the ability to be reporters, but mostly, they seem to want to be editors: the gatekeepers who decide what news they will see by commissioning a freelance article, or steering an investigative team toward a topic, or engaging with this niche news app but not that one.

Getting the mix right

For news organisations, then, micropayments are just one option among many in a fragile and fractured digital ecosystem – something to add to the revenue mix if doing so requires only small investments of time, effort or money.

While experimentation is all to the good, the pay-off from this option seems inherently small. The vast majority of online users do not pay now for digital news and have no plans to change their ways. There’s no evidence of a massive demand from users for the ability to pay upfront to read news content – and, even if there were, the small amount of revenue generated on any given day would fluctuate considerably depending on what was on offer. This is not the most desirable funding model for organisations that need a stable financial base to support staff, infrastructure and the ongoing ability to hold the powerful to account.

The reverse option – enabling news consumers to steer the direction of journalistic investigations – seems more plausible and the various non-profit enterprises I’ve mentioned are among those offering examples of ways this might work.

But news users aren’t the only ones who like to be in control. Journalists tend to be fiercely committed to the notion of editorial independence – which is another way of saying that they like to decide for themselves what is and isn’t news. Whether they will be willing to share that control – and, if so, what they might be able to extract from users in exchange – remains to be seen.The Conversation

This article was originally published on The Conversation. Read the original article. Re-posted under a CC 4.0 license.

Many low-income students use only their phone to get online. What are they missing?

By Crystle Martin, University of California, Irvine 

For many of us, access to the Internet through a variety of means is a given. I can access the Internet through two laptops, a tablet, a smartphone and even both of my game systems, from the comfort of my living room.

However, this access is unequally distributed. Although nine out of 10 low-income families have Internet access at home, most are underconnected: that is, they have “mobile-only” access – they are able to connect to the Internet only through a smart device, such as a tablet or a smartphone.

A recent report, “Opportunity for all? Technology and learning in low income families,” shows that one-quarter of those earning below the median income and one-third of those living below poverty level accessed the Internet only through their mobile devices.

This leads to limited access: A third of families with mobile-only access quickly hit the data limits on their mobile phone plans and about a quarter have their phone service cut off for lack of payment.

So, what impact does this type of access have on youth learning?

What changes with a computer connection

My research has explored underserved youth’s use of technology to discover and participate in content related to their interests. Having access only through their mobile devices means that low-income families and youth do not have the same access to the Internet as those with other Internet connections.

One-fifth of families who access the Internet only through their mobile devices say too many family members have to share one device. This means that the amount of time each individual has to access the Internet is limited.

This can be a barrier to learning for young people. It can limit their access to resources to complete their homework, as well as create barriers for other learning. Thirty-five percent of youth who have mobile-only access look online for information about things they are interested in. But this goes up to 52 percent when young people have access to an Internet-connected computer.

When young people have access to an Internet-supported computer, it facilitates their learning.
leah, CC BY-NC-ND

When young people have their own access to the Internet, they have an opportunity to engage in connected learning – learning that is based on interest, is supported by peers and has the potential to offer better opportunities for the future.

A 2014 paper on the use of digital media as a learning tool highlights how learning around interests can be supported through online resources.

The paper tells the story of Amy, a participant in an online knitting community, Hogwarts at Ravelry, which combines both interest in knitting and the Harry Potter series. Amy finds inspiration in the vast knitting pattern library of the group and receiving support from others in the community. She begins to develop, design and write patterns of her own. And, as a teenager, she begins selling her patterns online.

Amy’s access to a stable Internet connection and her own dedication allowed her to dive deep into the activities of the community. Over time, it allowed her to become more active and engaged in knitting.

Another example of what youth can accomplish online comes from my 2014 research on a professional wrestling fan community, a set of forums where professional wrestling fans get together virtually to discuss the many facets of professional wrestling.

Maria, a professional wrestling fan, seeks out an online community because she lacks local support for her interest. Through her participation, she realizes her deep enjoyment of writing. She carries this back into her English class and the school newspaper. This eventually leads her to take creative writing as a second degree in college.

Maria spent hours on her computer carefully crafting her narratives while participating on the forum. With a mobile-only access, she would not have had the amount of time online, or the amount of bandwidth, required for this work. This is supported by the fact that only 31 percent of children with mobile-only access go online daily as compared to 51 percent of those with other Internet access.

How low-income youth get left behind

Mobile-only access to the Internet can create serious barriers for youth who want to access content and educational supports.

As part of my research, I have been conducting workshops in libraries located in low-income communities, using an online coding program that is not yet available on mobile devices. In one of the workshops, students needed to work on projects outside of the sessions.

Because of the limited technology access at home, the librarian held additional open hours so the youth participating in the workshop could work on their projects outside of the workshop hours. A few youth had access to their own computers, but the majority had only mobile access.

Young people who have computer access create may better projects.
Jeff Werner, CC BY-NC-SA

The youth with computer access at home created more complex projects. This was partly because they had more time to develop, modify and problem-solve their projects. But it was also because the coding program was available to only those with computer access. These youth also seemed to develop a deeper interest in coding potentially due to this greater level of exposure.

Need for better understanding

What becomes evident from the data from “Opportunity for all? Technology and learning in low income families” and from the examples from research is that having access to the Internet only through a phone can have an impact on young people’s access to learning opportunities.

Designers, educators and researchers need to be aware and continually create more equity through mindful decision-making.

Amanda Ochsner, a postdoctoral researcher at the University of Southern California who studies how underrepresented groups of young people engage with games and digital media, argues that when designers and developers take the time to understand young people’s digital lives, they are ultimately able to make better tools. As she said to me:

In offices where the most recent models of laptops, tablets, and iPhones are abundant, it’s far too easy for those of us who develop educational tools and technologies to misjudge the technological realities of the young people the education tools and technologies are designing for.

Just how young people access online, in other words, matters – a lot.The Conversation

This article was originally published on The Conversation. Reposted under a CC BY-ND 4.0 license.  Read the original article.