Paywalls May Fail But Micropayments Can Work

One of my parents’ favourite restaurants in the North London suburb where we lived was way ahead of its time. And its core business model – derided then as now – is about to be tested by one of Britain’s finest orchestras. Who knows, it could even save the value of the written word.

Just Around The Corner had a unique price setting – you paid what you thought the meal was worth. Really. If you ate three courses and thought it was rubbish, then a few quid was all that you needed to stump up. Of course that never happened. The food was good, if unspectacular, the staff incredibly friendly, the ambience everything you could wish for in a local. So punters paid over the average because they appreciated the gesture and didn’t want to feel guilty about looking stingy.

Essentially, the restaurant was offering free food. But such was the feel-good factor that it fed its customers, it became one of Hampstead’s most desirable – and profitable – venues.

Later this year, the Halle Orchestra will try the same thing. Its classical stars will play ten short pieces at Manchester’s Bridgewater Hall and then holders of pre-booked free tickets will then be able to pay whatever they think the event was worth. The idea, said Halle’s chief executive, is to bring in a new audience by letting them ‘experience the Halle and enjoy some incredible music, but on their own terms’.

Tickets would normally sell for between £10 and £40. My bet is they’ll make double their usual returns. Because even though we love a bargain, we hate to look cheap and those that enjoy classical music or eating out or even reading intelligent journalism and literature know that nothing good should ever be free.

Free is the Pandora’s Box that media organisations so rashly opened without considering the consequences. There is a memorable line from one of Bob Dylan’s greatest songs, Brownsville Girl, and it brilliantly, if unintentionally, describes the lemming-like behaviour of too-hasty newspapers: ‘People don’t do what they believe in, they just do what’s most convenient and then they repent.’

I assume paywalls, memberships and native advertising are some sorts of repentance for free content. But there is another option, yet to be tried with any conviction which, like my local restaurant and the Halle, encourages people to pay for what is essentially free.

Micropayments. One of British media’s leading thinkers (and possibly doers, although I’ve never worked with him) is Rory Sutherland, the vice-chairman of advertising giant Ogilvy – and a brilliant Ted Talk contributor.

In a recent column in The Spectator magazine, he made a convincing case for reducing the BBC’s hated licence fee (and thereby saving the known universe) by ‘creating a payment system [that]…can microcharge. People spend more when they feel they can direct their spending. Charging in this way also helps niche content – chasing a small, passionate audience rather than a large homogenous one.’

And reading that reminded me of my £4.50 bowl of North London Vichyssoise. Was it really worth that? Do you think reading this article is worth 10p? Well maybe not that much but, honestly, a 1p payment enabled by ‘the cloud’ or whatever it is that runs the interweb these days, is not a bad reward for five minutes of your time and a morning’s work.

I’d be quite happy to pay Rory £1 to read his musings, whilst columnists like Philip Collins, Matthew Parris, Jonathan Freedland, Fay Maschler, Luke Johnson, Jenny McCartney, Matthew Norman and Gillian Tett are worth even more. To me. And that’s why micropayments work. You might not bother to read what I read, or even like what I read but, really, deep down would you object paying a tiny amount to reward the efforts of those individuals or institutions with whom you’ve formed an intellectual bond?

It still staggers me that the media world was duped into thinking free (perhaps – perhaps! – bolstered by advertising) was an acceptable business model. But one does foolish things in one’s youth and the digital media world is still in its infancy. Micropayments are a tiny but forceful means of correcting this terrible mistake – and it’s as close to free as you can get without actually being free.

Just Around The Corner has shut down by the way. A new owner came in and introduced a menu with proper prices. The times they a’ changed and the well-heeled locals didn’t like it. And that’s the trouble with Pandora’s box – closing it isn’t easy.


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