Micropayments can help online publishers increase revenue without asking for subscription

Credit: Frank Noon/Mousetrap Media

Microtransactions have been a standard monetisation technique in the video game industry for some time now as a way to entice consumers to purchase add-on content at low prices.

Newsrooms have since pondered whether this would work as a way to increase cash flow, or roping readers into memberships or subscriptions. Some early adopters have used microtransactions as part of a blended strategy to fight ad-blocking.

Speaking at Newsrewired (6 March), Dominic Young, founder of microtransaction platform Axate, said that this model can slot into a behavioural gap in today’s news audiences.

His platform Axate uses an online wallet system which is topped up by the user and spent across various affiliated sites at prices and terms set by the publisher.

So how does it work?

Axate allows users to pay publishers small amounts, for example 20p or 30p, per each article they read. However, online spending is capped once the user has spend equivalent to a subscription amount.

Take a £1 weekly subscription for example. Once the reader has spent £1 in the same week, they can access uncapped content for free for the remainder of that period. The objective is to reward readers for engagement with the brand without locking them into a subscription from the offset and potentially putting them off altogether.

“You have to reconnect popularity of product to revenue,” Young said, adding that subscriptions can be a good model, but it can lead to an organisation relying on just a handful of paying readers and neglecting the remaining majority of casual readers.

Microtransactions instead allow publishers to cast a wider net and appeal to a broader audience, he said. Young takes issue with the term microtransactions though, saying it creates an unnecessary distinction in types of payment and another potential obstacle to getting readers to pay for content.

Every barrier matters, he argues, no matter how small, because it restricts the number of users coming back to your website and developing habits with the brand. Paywalls in particular, Young emphasised, can be damaging in this regard as they create a barrier at the first hurdle.

Removing barriers and encouraging users to sign up to several different subscription services can also encourage a more collaborative mentality among publishers, allowing them to focus on becoming more popular with the user, rather than fighting against each other.

“The easier it is to form habits, the more money you make," concluded Young.

Our next newsrewired conference is taking place on the 27 November at Reuters, London. Head to newsrewired.com for the full agenda and tickets

This article was updated on 4 September 2019 by Jacob Granger. Axate was known as Agate before rebranding

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