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To say Twitter has had a love/hate relationship with micropayments would be putting it mildly. When Twitter first arrived on the scene, many believed that its transient nature, speed and news focus would be the perfect union for media companies and publishers. Years on, this scenario has not come about (despite many trying various experiments), which is a big issue as revenue for most media companies continues to spiral down the drain. But all this could be about to change, especially since Twitter continues to make a loss for shareholders ($132 million reported at the Q1 earnings call).
Re/Code recently sighted the elusive “buy now” button many have been craving (akin in style to the current Twitter app download ad format). This is not a deal with an existing platform like Amazon or Stripe. Instead, this is likely (it is a leak after all) selling directly to consumers. This throws up two interesting issues, namely credit card details (security, who holds them, etc.) and — the big one — exactly how frictionless will the process be. In my role working with large brands and following micropayment debacles in the media industry, one thing has become clear, simple and frictionless are the keys to success. Guess which one will be the most important for Twitter?
But micropayments have never taken off. Why should we be excited now?
There are three main reasons. One, consumers don’t particularly want to pay for content (although there are clearly more and more cases where this is happening). And two, the experience has been nothing short of garish. Considering the mobile nature of Twitter usage (around 70-80 percent of UK users and about 86 percent of users in the US access Twitter primarily through their mobile device), the experience of the transaction will be everything. If we see people putting in their credit card details on buses, Twitter will have failed. Thirdly, trust is a huge issue when it comes to payment online. I don’t foresee Twitter having a huge issue here if it implements it in a way that is clear, short and straight forward. There are other issues involved, but most tend to boil down to these three categories.
So Twitter is about to launch the Holy Grail?
Perhaps, but if history tells us anything about cross-company collaboration and big industry moves, it’s unlikely. My hypothesis is that if media companies get behind this quickly and for a sustained period, it will be able to create a new consumer behavior. Twitter is a unique entity which means this time could be different from the outset. Forget individual outlet paywalls and subscriptions per se. Let people and organizations pay for what they read. Perhaps there could be a Twitter subscription band. Or a model where readers pay to read individual writers (a great test for star journalists)? Whatever the system or model, success is — as always — dependent on the value the service offers readers. Social commerce is nothing new to Twitter. It’s been experimenting with social commerce for years, and it will continue to experiment as tastes and technologies change. But a simple issue remains constant and primary. That issue is friction. Remove friction, don’t be too obsessed with data (in the beginning), make it easy for people to pay and people will pay. It’s an exciting time if this rolls out with media in mind.
What about the data?
Good question. The other issue for media houses to contend with (which is never an easy one for anyone to stomach) will be relinquishing control of the oh-so-valuable credit card data and analytics. After all, the system is built for and by Twitter, so why should they share everything? They are a business after all. This issue will likely be the one that keeps most media companies hovering over the “go” button (deals have fallen through over a lot less). Either way, I’m sure these companies won’t be raising any banners for this likelihood as it yet again puts them in the “dumb data” bucket and at a disadvantage for the future. Although I do believe this mentality is shifting as tests are completed.
It will be interesting to see new strategies emerge for free content and locked-down content — the rise of new models and existing opportunities but in a new way (pay with a Tweet for example) all take on a new dimension when there is a built-in and understood singular system (read: iTunes). If I worked for a media house, I would be looking at this roll-out carefully, but determining my strategy now. It could be time to rethink “the penny gap.”
Didn’t Clay Shirky say something about micropayments?
Shirky believes micropayments won’t pay for all lights to be kept on, and I 100 percent agree. Twitter commerce is no panacea or replacement for a solid multichannel strategy for the media industry. But, as I have said before, it’s another step on the road to diversifying how the media industry makes money in the future. And it’s a solid (and easy) step to make without losing or conceding too much. Run towards the light and test, test, test. After all, it’s worked pretty well for Twitter’s tiny “rival” Facebook.
Paul Armstrong runs HERE/FORTH, an advisory that helps business leaders decide how to best use rapidly changing and emerging technologies. He is also the creator of@themediaisdying, a Twitter feed that charts the changing media landscape and C_NCENTRATE, a newsletter that focuses on what to do about the latest technology, media and social changes.
Photo courtesy of Shutterstock user Kheng Guan Toh.