The role of blockchain and micropayments in publishing
PEOPLE love content. Whether text, video, or audio, people want more content, better content, but free content. However, creating high-quality content takes effort and skill, and creators want to be paid for it.
In the past, content publishers paid creators by monetizing their platform using advertisements, while the high-quality content was expected to bring in web traffic. However, with the increased use of ad-blockers, remunerating creators is becoming a challenge.
According to Juniper Research, ad blockers might cost digital publishers more than US$27 billion in revenues by 2020.
Since consumers want the power to decide what they pay for, it seems that blockchain based micropayments might offer a solution. It’s something some publishers are currently experimenting with – quite successfully.
The concept of micropayments isn’t new – it basically means an e-commerce transaction involving a very small sum of money.
However, micropayments based on existing payment models have a lot of inefficiencies, making it a non-viable option for monetizing content.
For publishers, the associated fees for digital payment transactions make it expensive to scale. Brokers themselves could face bottlenecks when dealing with a high volume of payments. Blockchain is an ideal solution to cut out the middleman.
And while blockchain on its own is also prone to scaling problems, many organizations are using ‘channels’ to get around the inefficiencies in blockchain.
Instead of recording every bit of information to the blockchain – which takes up computing power and incurs hefty transaction fees – channel payments are recorded in bulk. It’s a bit like keeping a tab at the bar, where you don’t pay per drink, but only at the end.
Creating a micropayment channel means locking a particular amount of bitcoin. The sender signs the payment on the channel, and the receiver can withdraw in bulk all the payments after the channel is closed. This minimizes the number of transactions, making it cheaper and more efficient.
For content publishers, adopting a micropayment model allows users to pay for what they read or watch, instead of having to pay for a subscription for every publication, even if they only read one article.
Organizations could also offer instant micropayments, to reduce the hassle for users creating an account to make payments for every new publication they access.
There are platforms that are attempting to help publishers using a pay per article model, such as Dutch news aggregator service Blendle. Google has also announced that they are looking to make subscriptions easier for users on the Google News app.
Micropayments aren’t only limited to publishers. They can be used for other resources or services, such as pay-as-you-go WiFi for travelers who need just a few minutes of connection to access emails or WhatsApp messages.
Although micropayments are by no means perfect, they could open up better options and possibilities for publishers to foster an environment for higher quality content.