Grant Report #2

Project Update

The goal of this project is to establish market incentives for broad adoption of Web Monetization across the news publishing industry.

We are doing that by creating technologies for national and local news publishers to grow their business by capitalizing on the uniquely decentralized architecture and economics of the open web.

Our ambition is to provide the news publishing industry with a new decentralized reader revenue model that aligns more naturally with the open web’s decentralized design.

As described in our previous update,

“Our project is focused on developing new reader revenue models to support quality news organizations as they do the important work of journalism which is vital to healthy communities, economies and democracy.

In the initial few months of the project we focused primarily on:

1) Engaging with news media companies of all sizes to explore reader revenue concepts.

2) Working with publishers to implement foundational DML technology, enabling the creation of publisher networks that will facilitate the Web Monetization pilot.”

In this second phase, with the benefit of a growing network of participating publishers in the DML Network, and a clear understanding of market requirements for adoption of Web Monetization, our focus shifted to building the necessary technologies and enabling payment pointers before there is a scaled market opportunity waiting for publishers on the other side of the engineering and marketing work required.

Clearly, broad publisher support for Web Monetization on its own faces the classic challenge when starting a two sided marketplace from scratch. Namely, what incentive is there for publishers to do the work to support Web Monetization before there is a scaled and lucrative market of consumers with funded wallets waiting to be spent?

To address this challenge, DML integrated Web Monetization into the DML platform. On its own, the DML platform provides publishers with valuable editorial experiences driving deeper reader engagement and new advertising revenue opportunities. These inherent benefits power a growing network now reaching hundreds of publishers and millions of consumers. Through the DML network, we are positioned to support a pilot without requiring publishers to do any work before that work has its own inherent value to the publisher.

The DML platform

Building support for Web Monetization into the DML platform enabled us to run a variety of initial tests. Those tests were primarily for the purpose of determining whether the plumbing would work across an AMP based network and secondarily for the purpose of ascertaining the presence of digital wallets “in the wild” as defined by the DML Network's reach across primarily local news media publishers in North America.

Over a two week period, the test ran on approximately 135 different news websites. Users opened the DML Viewer (with Web Monetization) approximately 150,000 times during that period.

The Web Monetization enabled Viewers included primarily politics and sports related content.

The result of this test confirmed our assumptions about the current technical and market limitations for Web Monetization as a scaled payment method and revenue opportunity in this context.

Encountering specific limitations informed our view for how best to move forward. Effectively, it became clear that initial adoption by the publisher community would require more robust platform capabilities on the payment side of the solution.

Specifically, we realized that broad and rapid adoption would require DML initially to manage wallets on behalf of participating publishers. As the revenue stream becomes material, we could then more safely expect publishers to take action on their own, setting up and managing their own wallets to benefit from this new distributed reader revenue stream.

With this market requirement in mind, DML partnered with Uphold to integrate Uphold’s payment capabilities into the DML platform. This enables the DML platform to manage both the payer and payee side of the publisher relationships. The implementation will create DML managed wallets on our platform for each publisher that is enabled for Web Monetization through our platform. The publishers will be able to collect subscription and contribution funds through existing channels on their web sites and then fund a payer wallet accordingly. These funds can then be distributed to payee wallets as users engage with creator publisher content on the host publisher websites. Publishers can cash out the balance once they hit a certain threshold to their own Uphold account.

While this will be the initial mechanism leveraged by the DML platform, payee publisher wallets will also be configured with Payment Pointers to allow for browser level integration with other Web Monetization providers such as Coil.

Progress on objectives

Initially, our goal was to launch a publisher pilot in Q2, 2021. However, due to the specific technical and market challenges referenced above, we needed to take the time to build solutions before a meaningful pilot would be viable.

At this point, those solutions are built and available for a pilot program.

Key activities

Now that we have the components in place to run a meaningful pilot, we are designing the pilot program details.

The program will involve host publishers with DML powered editorial experiences embedded on their site (enabled for Web Monetization by default through the DML platform integration) and opted in for measuring audience engagement and performance. These metrics will be used to inform both a Subscription and Contribution revenue model depending on the editorial experience.

We will be using some of the grant funding to compensate publishers for participation in this program during the course of the pilot term, which we anticipate to last 6 months.

Communications and marketing

Our communications have been primarily directly with publishers as they consider participating in the upcoming pilot and with industry associations.

We anticipate broader communications as the pilot gets underway and we have results to report to the broader community.

What community support would benefit your project?

We are eager to get in touch with news media and local media publishers about the pilot! Also, we continue to benefit from reading about the progress of other grantees as those lessons all fold into our efforts as we progress.

Additional comments

In our last update, we mentioned,

“The only thing we’d like to add at this point is that it is tremendously exciting to participate in what feels like it will be a transformational moment in the developmental life cycle of the web. For too long, the web has not offered an inherent and open infrastructure for payments between parties. This effort is adding an economic layer to the web that has the potential to transform entire industries and we are very excited to be involved!”

This sentiment remains true as we progress down the path toward hopefully establishing a new and more robust market framework for quality content and creators across the digital economy.