For our grant we did research in how we could renew the business model for Micrio with Web Monetization. We like to share our results with all of you!
The product: Micrio
Before we start talking about business models, first a short introduction about what Micrio is. Micrio is a solution for telling interactive stories with ultra resolution images or video. Publishers can create interactive stories with Micrio and incorporate them in their website. So technically Micrio is a CMS & private library. The publisher creates an interactive story in the CMS & includes it with the library on a webpage. For example: the Dutch Rijksmuseum created an interactive story about their painting Nighwatch.
Micrio’s customers, the publishers, buy a subscription. The monthly fee is mainly depending on the amount of visitors and therefore higher bandwidth usage (there is an average usage of 12 MB per visitor). An extra fee is paid when the subscription limit is exceeded.
In the current business model visitors have free access to make use of the interactive story.
The current business model works for Micrio itself, but it can have an unwanted side effect for the publisher. The more visitors are attracted to the publisher’s Micrio project, the higher the monthly fee becomes. This means that the subscription costs can be unpredictable for the publisher.
If a project unexpectedly goes ‘viral’, this can even cause extra costs on top of the subscription fee. You could say that the publisher is ‘punished’ for creating awesome content!
But… Web Monetization could solve this problem!
During our research we looked into some possible business models with Web Monetization for Micrio, for example let users pay for their bandwidth usage. The summary of the research can be read here. This resulted in an updated business model.
In the updated version, publishers earn money with Web Monetization. The publisher receives a share of this revenue stream, for example 90%. This can be an extra incentive for the publisher to create high quality content & put effort into attracting visitors.
While flexible income based on visitors is an improvement for the content creator, it introduces uncertainty for the Micrio business model. Especially because Micrio is not responsible for marketing the content itself. Therefore we have chosen to add web monetization on top of the existing subscription model The combination of subscription and Web Monetization creates the situation that publishers first have to invest (the subscription costs) and possibly earn money after the break-even point. And this is also a win for Micrio, because it will receive a small share for the attracted visitors.
In our prototype we created a calculator for getting a rough estimation about those break-even points.
We talked about uncertainty for Micrio in the previous paragraph. We also see another one in the current version of the Web Monetization landscape. At the moment Coil, as the only provider, determines the price to be paid. This means that a 3rd party has a huge influence on Micro’s business model. We think this is far from ideal.
In the research we did, we saw that the average visit is 2 minutes on Micrio projects. In that time we like to be paid €0.025 for example. Currently Coil’s rate is about €0,30 per hour, which is only €0.01 in 2 minutes. Therefore we like to set the Web Monetization rate ourself.
We have some ideas about how this could work in the Web Monetization API, more about that in the next post in this serie.