Magazines, marketers, middlemen and micropayments

Fortune Tech is reporting that digital magazine subscriptions are already falling, before the new medium has even managed to reach the mainstream. Some in the publishing world would like to blame the problem on the difficulty of marketing digital magazines when Apple refuses to share customer data with publishers. Such complaints may be put to the test if Google’s prospective subscription service for Android gives publishers access to the customer data they’ve been asking for, as the

Fortune article speculates.

How might the industry evolve if Apple, Google and the like have to compete to attract content creators by offering them customers’ data? This is an issue that goes beyond the new medium of digital magazines and calls into question the role of the device vendor as information gatekeeper.

One interesting possibility is that once creators can contact their customers they’ll deal with them directly, cutting device vendors out of future transactions and reducing their power as gatekeepers – and thus their bargaining power when trying to withold further customer data. Given the potential for companies such as Apple and Google to abuse their position as Holders of the Holy Code-Signing Keys, I see this as a good thing; it might even be a step towards the kind of ‘peer-to-peer economics’ copyright reformers have long advocated, where artists and audiences benefit by cutting out rent-seeking middlemen. But for that to happen, there needs to be an easy way for creators to squeeze the occasional drop of cash from their newly-identified customers.

Perhaps Flattr, a click-based micropayment system, can fill that niche. But I wonder whether we can’t take its core insight – minimising mental transaction costs – even further. Why do I need to click when my device already knows what I’m reading, playing, watching and listening to?

What I want to suggest isn’t a new idea – it’s just a combination of two existing ideas, Flattr and scrobbling. Creators would tag their content to indicate ownership, and the mobile device would keep track of how much time was spent on each creator’s content during the month, dividing a fixed budget among the creators at the end of the month. Mental transaction cost: zero.

The problem, of course, is that if users set their monthly budgets to zero, nobody gets paid. Will creators be willing to risk giving their work away for free in return for circumventing the middlemen and earning 100% of whatever people are willing to pay? If sales of digital magazines are anything to go by, they might not have much to lose…

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