In earlier posts, I alluded that micro-transactions to read articles online is hard. In this article, when I say micro-transactions, I mean being able to pay for articles individually on a per-read basis. In theory, these micro-transactions are the best of all worlds: no commitment from the readers, granular controls for the writers, direct monetization in line with supply and demand. However, that has not proven to be the case.
From an implementation standpoint, micro-transactions are difficult because in their simplest form, each article would require its own transaction. This is impractical because of payment fees. Every transaction has a cost - fees, processing, back and forth with financial institutions, risk etc., so doing a transaction per read has never made sense. Another method is needed: bulk transactions. But how do you do that? Per publication? It could work, but that means every publication would need to roll out its own. And that leads to unpredictable revenue. Subscriptions are preferable because they provides “reliable” recurring revenue, ideally with minimal churn. Hence we have the freemium model, or trial period, for most subscriptions. As a result of this widespread desire for subscriptions, readers are beset with subscription fatigue. Will we read this publication enough to justify it? What about that new article everybody is reading from a different publication? Do I subscribe to that too? So while it might make sense from the publications’ perspective to lean on subscriptions, it’s not being well received and there’s a real desire for alternatives.
From a UX perspective (readers being greeted with paywall), it's a critical point of friction - it begs the question, “is this article going to be worth it?” More often than not, especially with the overhead in handling that small transaction, the reader will either sigh and walk away, or scour the Internet for another way to read the article. And with AI in the mix, if they're just looking for information, they'll likely go that route. If they're familiar with the writer or publication and know what they're paying for, they may persist.
Regarding previous attempts at a micro-transaction model, the problems faced aren't insurmountable, and there have been various approaches to address them:
Donations
(Buy Me A Coffee, Patreon, Ko-Fi, Flattr)
The idea is that after reading an article, if it was worth it, some small gift/donation will be sent the authors way. This seems great, except these approaches depend on others’ goodwill. And at the end of an article, not many readers will invest the time and effort to set up an account to contribute. Good for those who do, but this model is hardly financially sustainable for writers.
Browser extension
i.e. Flattr, Google Micro-payments API
There's this one model that relies on a browser extension being installed with your bank account at the other end. It keeps track of everything you visit, and when a publication registers, it gets what it's been paid according to the visits. This is an interesting thought experiment that collapses very quickly for 2 reasons:
It's unpredictable in terms of the value per read (a finite pool of money you get a cut from), but more importantly, it relies on readers’ goodwill that they've enabled it
This browser extension tracks everything you visit. Nobody really wants that much info being shared, which is why you should be careful about the extensions you install. Spyware 101.
And, browser extensions are ultimately futile, because readers have to opt in to use them. See point 1 about donations and the overhead involved.
Blendle
Blendle was an app you had to download where could read articles on demand and would be charged at the end of the month. Unfortunately, it suffered from a few problems:
You had to download an app - this is a massive point of friction, and readers would have to completely buy in to the model for this to work.
Lack of a proper aggregator - this is something underrated IMO, especially with the open web in a state of decay (see how AI is destroying the open web)
Needed to be a substantive size to be listed - it’s good for larger, established publications, but not a lot for smaller independent blogs who need an easier way to get started
Only took off in Europe
What did it get right? The business model looks reasonable, but more importantly, they had a critical mass of publications. Point 2, the UX friction, can be accommodated if there's an appropriate number of publications so there’s enough incentive to get onboard.
Eventually Blendle succumbed to the whole subscriptions model when they were bought by Cafeyn.
Paperwall
So, what exactly is Paperwall and how does it fit into this space? It's a pay-only-for-what-you-read system where a paywall shows up on each article registered against the Paperwall network. It works by allowing publications to register their site, add a bit of code, then configure each article to accept tickets. These tickets can be purchased by readers on Paperwall, and redeemed with as few as 2 clicks to provide an interaction as streamlined as possible.
How does it address the shortcomings of the previous solutions?
It shows up before you read as a paywall. No relying on goodwill when a reader finishes reading. More aggressive, but more financially sustainable. They are annoying, but the mandated commitment is what actually deters most people.
Is not a browser extension - i.e. doesn't track your entire browsing history. A blog or publication has to register with Paperwall for it to function.
Uses boring, but modern, web best practices - paywalls are tried and true, hence their prevalence. Paperwall uses a cookie-less solution, meaning it will survive the fall of third party cookies, while still remaining as secure as possible.
Does not require downloading an app - it just takes a few clicks to get started and top up your account, like any other classic e-commerce site. It works wherever you have access to a browser.
Can seamlessly integrate into other paywall solutions - an SDK has been provided, along with a technical walkthrough so it can live alongside whatever subscription is currently in place.
Those are the technical components that separate Paperwall from previous attempts.
The biggest one though - the user friction of the paywall and deciding whether an article is worth it, has a less clear path forward. How do you know if this unknown article from this unknown writer will be worth it? If it's recommended, that's an easy answer. If you stumble across it randomly? Less clear.
There are a few elements built into the original Paperwall idea that attempt to inform what the user is getting into, which largely stem from the aggregator. People trust other people’s recommendations, hence why ratings are so important in movies, books, online purchases, etc. Trustpilot’s whole thing is providing verified ratings. So, providing meta-information through the aggregator, allowing tools like upvotes, ratings and something like Community Notes (in the works) helps provide confidence to other readers that an article is worth the purchase to read.
So those are the previous attempts at this model, and how Paperwall tries to improve. However, it is important to note that this model isn't ideal for every blog or publication. It works best for well-researched essays, opinion pieces, thoughtful long-form content, rather than brief news or light informational pieces. Readers expect “information” to be free at this point, and will go for another similar article, or reach for AI, instead of jumping through hoops to access that information.
If you're interested in trying Paperwall and seeing if it's the right fit for you, you can get started, or simply follow along.