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6 strategies for using content monetization in your platform.

blackforestboi profile image Oliver Sauter ・5 min read

Web commerce is a huge, varied space, with creators offering a wide range of solutions. Our biggest challenge is finding a solution that helps the widest range of creators.

I worked together with @scottjenson to list the current options for content monetization that people could apply in their product, and lay out the pros and cons of each. The goal is for you to find a better, more flexible approach that can appeal to not only streamers, but 3d printers, musicians, Etsy sellers, creators on Patreon, and we hope, many many more.

This document meant to kickstart a conversation, not finish it, so we’re looking forward to your ideas so that the larger WebMonetization community can pick the most suitable model for their products. Do you see other pros and cons to the listed options, or other options overall?

Without further ado....

Network subscription

Consumers are charged a fixed price per month for accessing a range of all creators' content available to the network.

Example: Spotify

Upside:

  • Simple for the consumer. A single fixed price per month is clear and safe for the consumer, which creates the calmest most predictable UX.
  • Consumers have no decisions to make over payout.

Downside:

  • Every creator competes around the same pot of money (e.g. 3€ per consumer) which creates incentives for click-bait
  • No ability for consumers to pay more if they like and can
  • No ability for creator to set their price
  • No free market dynamics for price discovery
  • Minimal payout for most creators
  • Knowledge distribution is hindered and only accessible to those who can pay - but not as strongly as with 'Subscriptions' or 'Pay-per-Access' models.
  • Negative PR as there is a A 'gatekeeper’ role for the distributor of the funds. Likely frequent frustration, discussion, criticism of how the funds are distributed.

Creator Subscriptions

Creators can set an individual price to access all or some of their content

Examples: Substack.com, news paywall (Nytimes.com), or Patreon

Upside:

  • Creator has control over how much they are worth and want to charge
  • Reduced decision for subscriber (once every few weeks/months)
  • Chance to build long-term relationship between Creator and Consumer

Downside:

  • Consumers have to pay a long-term subscription even if just a few articles helpful/wanted
  • Consumers may forget they are subscribed and continue paying after they stop consuming.
  • Need to enter a contractual relationship with every creator individually.
  • Knowledge distribution is hindered and only accessible to those who can pay

Pay-per-access

Creators can set price for accessing individual content

Example: Academic paper paywalls, News articles, videos

Upside:

  • Creator has control over how much they are worth and want to charge
  • Even though decisions may be frequent, paying flows into the natural desire for access. People are likely to pay if they really see the value of getting access.

Downside:

  • No ability to try-and-buy
  • High frequency interaction needed, like with microdonations. Payment friction causes potential loss of engagement/long-term relationship between creator and consumer
  • Knowledge distribution is hindered and only accessible to those who can pay

Microdonations

Consumers can set a budget of what they want to allocate per month to donate and then donate to each content or creator individually
Example: Flattr, Satoshipay

Upside:

  • Consumers can pay what they want/can
  • High flexibility of who to pay, even small blogs

Downside:

  • Causes decision fatigue because of need to click for each contribution
  • No need to pay, causing a lot of people to forget or avoid paying.

Auto-distributed microdonations based on engagement

Advanced version of micro-donations where payout happens automatically based on consumer's engagement with content.
Example: Brave's Basic Attention Token, Spotify's network subscription (but without a max amount)

Upside:

  • Consumer decision reduced to: How much do I want to pay each month?
  • High flexibility of who to pay, even small blogs or curators (e.g. Twitter profiles)

Downside:

  • Potentially needs a lot of review on who to pay automatically in order to train algorithms.
  • Current solutions have low-fidelity of data to draw from (Brave: reading time, frequency)
  • No need to pay, causing people to avoid paying.

Not seen yet. Future?

These are ideas on how to get around the downsides of some of the current approaches to content monetization.

Staking-based access

Creators don't charge consumers a 'Subscription' or 'Pay-Per-Access'. Instead they require Consumers who want to access their content to have 'Auto-distributed Microdonations' enabled and having staked at least X amount into the payout pool per month. This means consumers can freely access creators’ content and won't be charged if it's not useful, but it's ensured that consumers have set aside budget for the content that they actually find useful and contribute to the health and wealth of the creator economy.

Upside:

  • Solves problem that consumers are not required NEED to pay, like with microdonations
  • Leaving openness for knowledge being freely accessible to the majority of people, while at the same time rewarding useful creators
  • Useful to consumers who just want to skim and see if the content is valuable. Potentially also very suitable as an alternative model to pay for access to non-state-funded academic papers (which otherwise should be open source).
  • Potentially an elegant way of creating non-oppressive social incentives to pay for content.

Downside:

  • If the required staked amount is too diverse, it may reduce consumer convenience (e.g. Consumer stakes 6€/month but some of the creators want you to stake 7€, others 8€ and others 9€.
  • Could cause frustrations by needing to adapt budget too often. Could be worked around by offering tier suggestions to creators (e.g. 5€ / 10€ / 15€)

Time-limited freemium

Allow someone to try out a stream/content for X seconds for free and if they like it, then start charging them. This allows people to try something out risk free.
Potentially more suitable for music, podcast and video content, than for news articles. Could apply to news articles as well in a frequency limited freemium variety where consumers get X articles to read for free, like on Medium or NYtimes.

Upside:

  • Enables a try-and-buy option

Downside:

  • Not equally suitable for all content (e.g. article vs audio/video)

Multi-tiered network subscriptions

Platforms with Network Subscriptions (e.g. Spotify) could introduce a second tier or enable creators to offer exclusive access with separate subscriptions.

Upside:

  • Creators have the ability to grow in popularity in a network and capitalise on true-fans.

Downside:

  • If creators can’t set their own price on exclusive access to some of their content and it's just another network tier, it does not solve the problem that they all compete around a fixed pot

Discussion (5)

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chrislarry profile image
Chris Lawrence

This is fantastic, thanks @blackforestboi for posting. Curious where would you slot Coil in this and what models would you like to see emerge that leverage the ILP and WM Standard?

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blackforestboi profile image
Oliver Sauter Author

Hey Chris!

I am going to write a longer post about this question soon as part of our final report on the research on options for better integration of (micro)payments with Coil/WM/ILP (with a focus of the context of our project).

In short:
Automated micropayments could work well with Coil/WM out of the box. Probably directly via the Coil API, although that would make it wallet dependent again.

My personal favourite, and for which Coil or generally crypto-based solutions are potentially a great fit, is the staking-based access. This way you can cryptographically verify that the stake/deposit has been made and that can't be withdrawn. Though I think that Coil does not support such a use case yet.
I didn't find conclusive answers if Coil could be used for ongoing subscriptions, as it does not seem to support that (yet) either. Maybe I am mistaken and haven't found the right docs. Do you know where I could read up on both of those cases?

Other unanswered questions I have, and you may be the right person to ask or help me find another person to ask, is how multi-recipient transactions could/would work with ILP and WM?
This would be necessary for example to implement use cases like platform fees (e.g. 10% of the creator revenue), or pay multiple contributor in a collection directly, instead of creating a platform dependent proprietary fund distribution mechanism.

These questions are not immediately necessary to answer in order to fullfill our current grant requirements, but they are for a subsequent proposal on extending the WM/coil integrations and to offer a wider range of monetization methods (auto-payment, subscriptions, staking-based access)

Thanks for the help!

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blackforestboi profile image
Oliver Sauter Author • Edited

Hey @chrislarry ,

we have now found the cause of our challenges, and they were burried in a misunderstanding on how the WebMonetization implementation currently works. It became clear now that the WebMonatization currently only supports a stream of payments for as long as the user is active on a page, or decided to start/stop the payment stream.

Given this I have to revisit some of my analysis on where things can be used:

  1. WM can be used for automated micropayments, but only in a very limited fashion since it basically only takes the visit duration into account. (given that the meta tag is injected right from the start and not on demand). There is no ability to influence the weight distribution of the funds, unless you are a wallet provider.
  2. One-off fixed payments are not possible unless providers like coil enable those, since also here the distribution algorithm is on the provider side.
  3. Multi-recipient payment can work quite well by using the probabilistic rev-share approach and develop a distribution algorithm service side (e.g. by determining how many items someone contributed to a Memex collection of curated papers and websites)
  4. Subscriptions are also not possible with WM right now because you can't make big 1-20+€ payments in on go (see 2.) and the wallets need to also support collecting more funds and notifying users about insufficient funds for additional subscriptions.

Would be great to know where WM has challenges to be implementing those features so the community can think/work along.

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antoniotalarico profile image
Antonio Talarico

Love this. A lot to unpack and indeed it opens a wide variety of solutions when you allow for granularization of tokens. Great read Oliver!

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toddhansen profile image
Todd Hansen

Good stuff. A lot to dig into here. But great brain food.