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Digital solutions for very small payments were a hot topic a decade ago, but now the subject is making a comeback in the publishing business, where a slide in print advertising and other revenue sources is pushing publishers to seek new business in digital access. This week, Piano Software Inc., a New York City-based provider of tools for online subscription management and other functions, announced a service called Piano Frictionless, which is geared to let readers avoid long-term subscription commitments and instead pay small sums to view single articles or to have access for just a matter of days.
The service has entered a beta test using Apple Pay and its biometric authentication technology to allow users to access content with small payments. An example Piano cites is $3.99 for 30 days of access. The 10-year-old company, whose clients include major publishers such as Hearst, The Wall Street Journal, and the Associated Press, hopes to have Piano Frictionless in market by early March and to ultimately add PayPal and other digital wallets in an effort to let users sidestep creating accounts or entering payment information, according to a spokesperson.
The move could be seen as a new twist on an older idea to allow publishers, music companies, and other content sellers to augment revenue with small payments for limited viewing time or smaller chunks of the product. “An impulse mini-payment on the Web does not force the creation of a new digital wallet or the ‘taxi metering’ aspects of micropayments,” says Trevor Kaufman, Piano’s chief executive, in a statement. “And just like a purchase at a physical newsstand, it is an ideal step in the customer journey towards a full subscription.”
This is far from the first time content sellers have experimented with small payments for limited access. In 2009, for example, Google Inc. hatched a plan to allow publishers to earn payments though Google Checkout for online content views. Other companies, including startups like Bitpass Inc. and Peppercoin Inc., formed in the early 2000s to crack the micropayments puzzle surrounding digital content. Both companies collapsed after a few years.
The major sticking point for these ventures was that the transaction fees attached to card payments rendered it hard to make money on payments of $5 or less. “What’s interesting about this is that the economics of micro-payments-on-cards is difficult in that interchange fees can really eat into profits,” notes Patricia Hewitt, principal at PG Research & Advisory Services, a Savannah, Ga.-based consultancy, in an email message. With respect to Piano Frictionless, she speculates,”perhaps these media companies are taking the bad with the good in order to boost circulation.”
The Piano spokesperson said the company will not add on fees. “Standard feeds of wallet-based payment methods will remain the same,” she added.
