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 â on their own terms, and not just those of suppliers' arcane systems.
The idea is to build a new marketplace for media â one where supply and demand can relate, converse and transact business on mutually beneficial terms, rather than only on terms provided by thousands of different silo'd systems, each serving to hold the customer captive.
PayChoice is a breed of VRM, or Vendor Relationship Management. VRM is the reciprocal of CRM or Customer Relationship Management. VRM provides customers with tools for engaging with vendors in ways that work for both parties. PayChoice is one of those tools. Or a set of them.
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, and has proven to be a losing proposition.
What the marketplace requires are new business and social contracts that ease payment and stigmatize non-payment for media goods. The friction involved in voluntary payment is still high, even on the Web, where one must go through complex forms even to make simple payments. There is no common and easy way either to keep track of what media (free or otherwise) we consume (see Media Logging), to determine what it might be worth, and to pay for it easily and in standard ways -- to many different suppliers. (Again, each supplier has its own system for accepting payments.)
PayChoice will create a "buy button"-simple payment system to allow 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. (Especially in the current economic environment, which is akin to an earthquake that won't stop.) Nor do they support full participation and involvement with their users.
PayChoice differs from other payment models (subscriptions, newsstand, tip jars) 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, PayChoice 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 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." It will also give deeper meaning to "membership" in non-profits. (Under the current system, "membership" means putting one's name on a pitch list for future contributions, and not much more than that.)
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.
The idea of "micro-payments" for goods on the Net has been around for a long time, and has recently been revitalized as a potential business model for journalism by an article by Walter Isaacson in Time Magazine. What ProjectVRM suggests instead is something we don't yet have, but very much need: micro-accounting for actual uses. These including reading, listening and watching.
Most of what we now call "content" is both free for the taking and worth more than $zero. How much more? We need to be able to say.
So, as currently planned, PayChoice would -
- Provide a single and easy way that consumers of âcontentâ can become customers of it. In the current system -- which isn't one -- every artist, every musical group, every public radio and TV station, has his, her or its own way of taking in contributions from those who appreciate the work. This can be arduous and time-consuming for everybody involved. What PayChoice proposes, however, is not a replacement for existing systems, but a new system that can supplement existing fund-raising systems -- one that can soak up much of today's MLOTT: Money Left On The Table.
- Provide ways for individuals to look back through their media usage histories, inform themselves about what they have been enjoying, and to determine how much it is worth to them. The Copyright Arbitration Royalty Panel (CARP), and later the Copyright Royalty Board (CRB), both came up with ârates and terms that would have been negotiated in the marketplace between a willing buyer and a willing sellerâ â language that first appeared in the 1995 Digital Performance Royalty Act (DPRA), and tweaked in 1998 by the Digital Millennium Copyright Act (DMCA), under which both the CARP and the CRB operated. The rates they came up with peaked at $.0001 per âperformanceâ (a song or recording), per listener. PayChoice creates the âwilling buyerâ that the DRPA thought wouldnât exist.
- Stigmatize non-payment for worthwhile media goods. This is where âsocialâ will finally come to be something more than yet another tech buzzmodifier.
All these require micro-accounting, not micro-payments. In fact micro-accounting can inform ordinary payments that can be made in clever new ways that should satisfy everybody with an interest in seeing artists compensated fairly for their work. An individual listener, for example, can say "I want to pay 1Â¢ for every song I hear on the radio," and "I'll send SoundExchange a lump sum of all the pennies wish to pay for songs I hear over the course of a year, along with an accounting of what artists and songs I've listened to" -- and leave dispersal of those totaled pennies up to the kind of agency that likes, and can be trusted, to do that kind of thing.
Similar systems can also be put in place for readers of newspapers, blogs and other journals.
What's important is that the control is in the hands of the individual, and that the accounting and dispersal systems work the same way for everybody.
To work, PayChoice needs to have its choices informed. For that there should be a number of tools in the Media Logging toolbox. The first we're working on is a Listen Log called ListenLog for the Public Radio Tuner.
Q: Who would want to use it and why?
Right now supporting otherwise "free" journalism ranges from difficult (setting up separate paid relationships with each journal or broadcast station, each with its own rules and procedures, with all data stored in the journal or station's system) to impossible (no means are provided at all). 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 media to become customers of media. It will allow those 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 much more healthy media business would arise out of the one that's failing -- at least economically -- right now. In the process, the media business would no longer be required to depend entirely on advertising, newsstand sales, subscriptions and donations because a new and far more accountable system would be in place. It would, for example, provide a way for any journalist or journalistic organization in the "long tail" to find paying customers for their work.
Q: Is PayChoice a micropayments model?
No. Paychoice will involve what might be called "microaccounting," however, by keeping logs and histories that inform the user about what media content he or she has consumed. This will aid in valuing that content. Users will also be able to set what might be called "microprices" on items such as songs heard on radio and other music streaming sources, such as Pandora or Last.fm. A listener could, for example, say he or she will pay 1Â¢ per song, and have payments roll over when they reach a sum large enough to make the transaction worthwhile. Willingness to pay can also be aggregated among multiple users. There are lots of ways to arrange this. But micropayments have proven problematic so far and we have no intent to visit the same problems with PayChoice.
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. Goals and benchmarks for measuring social effects would be established.
A secondary measure would be membership activities other than those surrounding transaction.
Q: What un-met need does PayChoice answer?
Media need 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, for example, participatory journalism, where so much good and pioneering work is taking place.
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 media 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 many media 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.