Google (GOOG) is developing an online subscription and micropayment system that will enable online content providers to more easily charge for their content.
We’re sceptical that consumers will want to pay on a per-page basis for online content, but we’re big believers in the subscription model. Google’s planned system, which the company described in a proposal to the Newspaper Association of America (embedded below), emphasises subscriptions but enables micropayments as well.
Within the next year, we expect that hundreds of newspapers and magazines that currently give away their content for free online will start charging in one way or another. The scale and distribution of Google’s planned system could greatly facilitate that.
(Google’s system sounds similar to the planned offerings of Journalism Online, a startup launched recently by Steven Brill and Gordon Crovitz–see related story below.).
Here’s how Google describes the system in the NAA document [our comments in blue]:
• Easy Subscription Sign-up and Management for Users Plus Content
Packaging and Multiple Payment Forms for Publishers
o Single sign-on capability so users can use one login for access to premium
content and a central place to manage subscriptions and payments.
[It would be extremely helpful to users to have a single system to manage all subscriptions. It is a major drag to manage multiple subscriptions, and this acts as a barrier to signing up for more. It is also a major hassle and expense for publishers to develop, implement, and manage their own payment systems.]
o We envision the typical scenario to be where a user pays a monthly fee for
access to a wide-ranging package of premium content. One example of a
“package” might be full access to the WSJ; another “package” might include the
top 10 business publications. Google believes that there is real power and
benefit to publishers in providing these sorts of broad, multi-publication access
o For multi-publication packages, publishers will receive a revenue disbursement
that is proportional to the usage of their content in the package.
[This is tricky, but makes sense conceptually.]
o While providing an option for micropayments will be important, we do not believe
it will be the norm for accessing content. Example 1: A user has access to the
“basic” premium content package. She hears about the latest Sarah Palin article
in Vanity Fair, which is not part of her package. She can make a one-off
payment of $0.10 to read that article, which will show up on her bill as part of the
monthly payment. Example 2: A user sets aside an amount each month for
micropayments similar to the EZ-Pass model and is charged each time that pool
[Both good examples of scenarios in which a reader might actually use micropayments–as long as the system is seamless and largely invisible. If the content provider effectively has to make a “sale” every time, the system is doomed. Consumers HATE to be nickeled and dimed. If, instead, the system merely offered 500 pages for $5 a month and warned you when you were closing in on that limit, consumers might go for that.]