PayChoice

This page was born as a Knight NewsChallenge proposal, and was written to answer questions posed by the NewsChallenge folks.

Overview

PayChoice is a new business model for media: one by which readers, listeners and viewers can quickly and easily pay for the goods they use — on their own terms, as well as those of the suppliers' arcane systems.

The idea is to build a new marketplace for media — one where supply and demand can relate, converse and trasact business on mutually beneficial terms, rather than only on terms provided by thousands of different silo'd "customer relationship managemernt" (CRM) systems run entirely by the market's supply side.

PayChoice is a breed of VRM, or Vendor Relationship Management. VRM is the reciprocal of CRM or Customer Relationship Management. It provides customers with tools for engaging with vendors in ways that work for both parties.

PayChoice is proposed by ProjectVRM, a development project at the [Berkman Center for Internet and Society http://cyber.law.harvard.edu/home] at [arvard Law School http://harvard.edu]. The procject is led by [Doc Searls http://cyber.law.harvard.edu/people/dsearls], a fellow with the center.

Background

We now live in a media environment where goods previously sold directly or paid for by advertising are freely available and shared widely over the Internet. A number of factors contribute to a business and social conundrum for suppliers of those goods:

• Easy copying and sharing makes the goods freely available at growing ease and convenience
• Copying and sharing is so widespread and common that punishment for copyright and other usage violations touches only a small minority of offenders.

What we require are new business and social contracts that ease payment and stigmatize non-payment for media goods.

PayChoice will create a "buy button"-simple payment system to allow news readers, listeners and viewers to pay whatever they like, at their discretion, for whatever media products they use. For too many media the traditional business models -- subscriptions, newsstand sales, advertising and underwriting -- are not sufficient. Nor do they support full participation and involvement with their users.

PayChoice differs from other payment models (subscriptions, newsstand, tip jar) by allowing the customer to pay any amount they please, when they please, with minimum friction -- and with full choice about what they disclose about themselves. PayChoice will also support credit for referrals, requests for service, feedback and other relationship support mechanisms, all at the control of the user. For example, it can provide quick and easy ways for listeners to pay for public radio broadcasts or podcasts, for readers to pay for otherwise "free" papers or blogs, and paid request for stories or programs to be expressed and aggregated, without necessarily requiring the customer to disclose unnecessary private information, to become a "member". This will scaffold real relationships between buyers and sellers, and for supporting journalists covering what Jake Shapiro calls "microbeats."

PayChoice will also connect the sellers' CRM (Customer Relationship Management) systems with customers' VRM (Vendor Relationship Management) systems, supporting rich and participatory two-way relationships. In fact, PayChoice will by definition be a VRM system.

FAQ

Q: Who would want to use it and why?

Right now supporting otherwise "free" journalism ranges from difficult to impossible. Even the membership systems of public broadcasting exclude vast numbers of people who would contribute "if it was easy". PayChoice will make it easy for consumers of news to become customers of news. It will allow customers to pay for what they want, when they want, and to initiate actual relationships with the news organizations they pay -- on their own terms as well as those of the news organization.

Q: What potentially bigger thing might happen if everything went perfectly and the stars all aligned?

A healthy news business would arise out of direct market relationships between the producers and consumers of news. In the process, the news business would no longer be required to depend entirely on advertising, newsstand sales, subscriptions and donations because a fifth and far more accountable system would be in place. It will also for the first time provide a way for any journalist or journalistic organization in the "long tail" to find paying customers for their work.

Q: How will you be able to measure whether or not PayChoice has really made a difference?'

The primary measure would be monetary -- measurable as cash income to news producers from the consumers who, by paying, would become customers as well. We would also create goals and benchmarks for measuring social effects.

Q: What unmet need does PayChoice answer?

Participatory journalism needs a new business model. In spite of the shift of advertising from other media to digital ones, little of this money finds its way to supporting participatory journalism in "the long tail" where so much good and pioneering work is taking place.

Project PayChoice will create that model. It will also go beyond monetary support to include means for establishing working relationships between the buyers and sellers of journalistic products, so demand can find supply and vice versa.

There is also the need to address the likelihood that advertising -- the primary source of income for most journalistic enterprises -- will either be severely diminished or go away, simply because ways will be found for demand to find supply that are more efficient than the guesswork that advertising involves. PayChoice will be one way to take advantage of this inevitable shift in the marketplace.

Q: What specific, unique opportunity do you see that will make this project more successful than others trying to fill that general need?

Beyond PRX and ProjectVRM, we know of nobody else working on creating a new business model for journalism, especially at the local and regional levels. There is a widespread (and, we think, misled) faith that advertising, underwriting and public-broadcasting-model subscriptions will take care of all business. It won't. For freely available products, such as public broadcast programming, the level of support is very low -- generally around 10%. This is why PRX and ProjectVRM have taken up the challenge of increasing this percentage.

Project PayChoice would benefit here from collaboration with PRX and ProjectVRM, which are already in conversation with NPR, Public Interactive, WBUR, WGBH, WNYC and other major public broadcasting organizations. PRX has especially been a leader here and has a ready test bed for connecting thousands of professional producers, stations and interested listeners. To our knowledge, no efforts other than these are underway, anywhere. If they are, however, we'd be glad to work with them

Q: Are you working with anyone else to complete this project? If so, please give names and what they would do?

Other Berkman fellows and their projects would also be involved.

ake Shapiro is Executive Director of PRX, an online marketplace connecting independent producers and local public radio stations. Jake and PRX are already involved with ProjectVRM's work on public broadcasting monetization.

Dan Gillmor runs the Center for Citizen Media and is founding director of the Knight Center for Digital Media Entrepreneurship at Arizona State University's Walter Cronkite School of Journalism and Mass Communication. He will advise the project.

Persephone Miel is a new fellow doing hard-data research on participatory journalism. Her ongoing work will both inform and be informed by work going on with Project PayChoice.

Q: Who else is working in this area? How does your work fit into the larger context of work in this area?

The main fits are with PRX and ProjectVRM. PRX is working on creating new models for organizing, aggregating and "marketizing" relationships between demand and supply for public radio products, including journalistic works. Within Berkman, PayChoice would be a pilot VRM project. While ProjectVRM addresses the need for customer managed relations (including voluntary payments) with vendors of all kinds, Project PayChoice will focus exclusively on customer relations with journalistic organizations and individuals. ProjectVRM itself has a larger context: the VRM movement, which has grown considerably larger than what began inside the Berkman Center alone, "way back" in 2006. Project PayChoice will also draw from and support both the open source and user-centric identity management communities, as well as standards bodies.

It has been clear from the start that the VRM challenge in general requires open source development efforts. (For background on how open source fits, see Doc Searls' [chapter in O'Reilly's latest Open Sources book http://www.searls.com/doc/os2/docchapter.html].