Payment barriers are here to stay, but they shut down the internet. Crypto can fix that

It wasn’t long ago that the web was like a giant market. You can come back over and over to the digital version of your favorite kiosks or explore what any random site has to offer. Much of the content was – and still is – nonsense, but the point was that it was open for all to see.

Today, the web is more like a crowded city with checkpoints in every building. You might be able to look out a few shop windows, or even be allowed to take a quick stroll, but it won’t be long until someone asks you to identify yourself and buy a monthly pass to get around. In practical terms, this means that everything from major news events to the clever story of a sports columnist on last night’s game has become difficult to read.

This is not a bad thing. After years of giving away valuable content for free — and then hopefully Facebook or The Google They’ll share a few crumbs of ad dollars – web publishers have finally gained the confidence to put it up Readers to pay for their work. This, in turn, provided a source of income that directly financed good journalism.

The problem is that readers are getting cut off from more and more of the web. Even as more people are willing to pay for their favorite websites, no one can be expected to pay a response fee for the dozens or even hundreds of paywalls they encounter over the course of a year. Even worse, many digital publishers behave like record clubs of the 1980s – dragging users into sign-up forms where resignation looks like a hostage negotiation.

The upshot is that websites are cutting off an increasing number of readers who might pay a small amount to read an article, but don’t want to engage in aggressive subscription tactics or who might simply lack a credit card in the first place. The result is that both sides lose: publishers leave money on the table while regular web surfers turn to the free websites that are often hotbeds of viral follies.

This is not a new problem. The mixed blessing of the paywall has been discussed since at least 2007 when The New York Times Posted and canceled Its oldest version, TimesSelect. The difference today is that technology has taken a huge leap forward, introducing new tools – based on block chains – that can make the web feel as open and free as it used to be while allowing publishers to earn a living.

“The Original Sin of the Web”

Julien Genestoux, a software engineer and self-described “fan of the open web,” worked at the popular blogging platform Medium in 2017 when it launched a paywall that allowed users to become “members” and access a variety of content by different authors. .

“It was impressive realizing that membership could have been a business model for the web all along,” Genestoux says, adding that failure to build a payment model was the “original sin of the web.”

He points out that the original web designers already envisioned a native payment tool. This is reflected in the presence of an error message in the browser describing a file 402 Error, which is similar to a widespread 404 error (“Page not found”) but reads “Batch not found”. But other than the 404 error, the 402 message is still “Reserved for future use”.

The existence of the 402 error page reveals that the web was supposed to have an original web payment mechanism – one that would have allowed users to pay for content without revealing too much personal information – but for whatever reason it was never made public.

Genestoux has been working hard trying to redeem this original sin with a service called Unlock. The site uses non-fungible tokens – unique digital tokens registered in the blockchain – as a way for readers to access content on various websites without the fuss of frequent credit card sign-ups.

The Unlock model relies on blockchain smart contracts to check if an NFT owner is in good standing and, if so, to give them access to participating publishers’ websites. Unlike a traditional website subscription, membership can be transferred or sold. In the meantime, publishers can split revenue from NFT sales and resale via smart contract or offline arrangement.

Genestoux believes that web users will use NFTs in the future to access bundles of content tailored to their interests – perhaps one that will allow them to read dozens of sports or entertainment sites. He adds that, along with convenience, the unauthorized nature of NFT ownership reduces the possibility of censorship. Specifically, controversial publishers such as pornographic photographers or radical political websites will be less at the mercy of payment providers such as ribbon or visa cut it off.

Fatah is not alone. A company called Coil received $250 million from Crypto company Ripple To expand a service that allows readers to pay $5 per month to “stream” content from various websites. This service is free for publishers, who get paid at a rate of 36 cents an hour per user on their sites – a small sum for sure, but it would be significant if multiplied by thousands or millions of users.

The latest company to try to use a crypto-based subscription model is news and research site The roadblockwhich encourages loyal readers to do so Buy and share tokens In exchange for full access to their content. A company called Civil try to A similar model five years ago, but the project went down In a flash — in part because readers, and even its staff, found it baffling — but The Block is likely to be better positioned to succeed given its crypto-reader base, and since public knowledge of cryptocurrencies and tokens has increased exponentially in recent years.

However, despite this massive activity of bridging crypto and media subscriptions, there is little evidence that the idea is taking off with consumers. Trade publication The Defiant conducted a detailed survey of the services available last year and is over In a gloomy headline: “Micropays for content refuse to quit and encryption doesn’t help.”

What is the problem? While it may be tempting to blame the cryptocurrency’s complexity or deceptive reputation among many consumers, the biggest obstacle to adoption lies elsewhere – with the publishers themselves.

Not a technical problem

Trevor Kaufman is CEO of Piano, a company that generated $80 million in revenue last year by providing paywall technology to hundreds of media companies, including BBCAnd the Take Crunch And the luck. He says Piano has experimented with micropayments and cryptocurrency for years, including a system where publishers can barter with each other to provide access to content for each other’s employees.

But he discovered that publishers didn’t want any part of this.

“Believe me when I tell you that there is no [Piano] Kaufman said customers around the world are saying, “Hey Trevor, it would be great if there was a micropayment option.”

He points out that there are non-coding options that can make it easier for readers to purchase individual articles – like PayPal Wallets or Apple Pay in Safari — but publishers haven’t shown any interest in adopting it.

“There are ways to make a small amount of money for short-term access, but it’s not a technical problem. The concern is that they’re going to break up sub-revenue,” Kaufman said.

He explained that many publishers are finally enjoying a large stream of revenue from subscriptions, which not only put money in their pockets but provide predictable cash flows from which they can borrow. Having finally developed a business model out of the vagaries of online advertising, they are reluctant to meddle with it.

In fact, some of the biggest paywall success stories are reluctant to even discuss small payments. no The New York Times and Dow Jones (publisher The Wall Street Journal) politely declined to be interviewed on the topic.

This reservation is understandable given that publishers are emerging from two grueling decades in which the Internet destroyed their print-based business model, and Facebook and Google took most of the advertising dollars they used to earn. But it is difficult to see how the current landscape of paywall silos, which sees a third of readers Cancel their subscriptions within 24 hourssustainable.

‘Consumers want a spotify Kaufman acknowledges – even if publishers don’t want to provide a template.

It’s worth noting that other industries, notably music and TV giants, fought hard against streaming services offering new types of content packages, but in time, they came to appreciate services like Spotify or YouTube TV. It is inevitable that one day web publishers will come up with a system that makes it easier for readers to pay for their stories across different sites, using encryption — or perhaps something else.

In the meantime, Kaufman anticipates that NFTs and other types of cryptocurrency payments probably won’t become widespread for the foreseeable future, but he remains open to them.

Learn about business models Online content is one of the most important societal challenges we face, “So the more innovation the better. “

Leave a Comment