Transact: A payment system that enables a new business model for the web
Subscriptions are great for publishers, but hardly anyone wants or can afford to subscribe to every site that has something of interest to them. But that doesn't mean publishers should give away news for free, or use metered paywalls to force people to subscribe.
Restaurants don't give occasional “customers” free food and make regulars pay, but that is what news publishers do with free articles. Yes, “samples”, but for news, that means excerpts, not full articles. Tastes, not entrees.
If people don't work around the paywalls (it's not that hard, especially since Google is now preventing publishers from detecting incognito mode), most still won't subscribe just because they used up their 3 free articles. They just leave the site.
So either readers work around paywalls, and publishers get zero reader revenue, or readers abandon the site and publishers get zero reader revenue and zero ad revenue. Paywalls leave money on the table and drive away potential subscribers.
It doesn't have to be this way, publishers can charge for individual articles. And readers don't have to leave their websites. Transact makes it simple for any publisher to charge whatever they want (as little as one cent) for access to an article, a song, a video – anything that can be offered on a website.
Transact doesn't curate or aggregate (we just do payments), and transactions only take a few seconds. Publishers keep 90% of the first dollar of a transaction, and 95% above that dollar (e.g., they keep $4.70 of a $5 charge).
Readers keep small amounts of money in their Transact account, which is like a web-based debit card. Without bank fees.
Some people say micro-payments have “never worked”, but that's not true, they haven't really been tried. When have you ever seen a message on a news or magazine site that said “you must pay 5 cents to read the rest of this article”?
TV used to be free, then when it wasn't, the quality and quantity of shows (even before you could get them on the web) increased. News used to not be free, and when it became free, the quality and quantity decreased. It's not a mystery.
While there are many sources of national news, there are not many publishers of local news in every area, because of consolidation and shutdowns. And many of the ones left have shrunk. People still want to know what is happening in their community, and will pay for it.
“Free” articles do not generate much in ad revenue per view, so even charging 5 cents for an article that might have been free will generate more revenue than ads seen by 10x as many readers.
And it's good publishers charge more for ad clicks, as that encourages readers to leave their site. But is readers leaving the site really what publishers want?
There's nothing wrong with ads, except publishers have little control over the ones that are supplied by 3rd parties, which usually end up re-drawing pages and annoying readers. A viable business model for local news publishers includes subscriptions, a la carte, and local sponsors.
Transact provides software for publishers to start using the service in minutes, and lets them charge different prices for every article. Publishers also get to decide how much of an article is free. We provide a free plug-in for WordPress, and will customize the software for any other CMS.
Transact works for all kinds of digital media, including video and audio.
But our initial goal was to help local news publishers build a sustainable business. We have a model that we would love to share with anyone who wants to report the news.
We want to make it easy for readers to try Transact, so we give them $3 in free credit, even without giving us a credit card. But they need places to spend that.
If you aren't ready to change your website, you can experiment with Postd.io, where you can offer any of your articles (or videos or podcasts) a la carte. Or Notd.io, where you can offer a subscription to a section of your publication.