Making Paying for Content More Personal

Laporte: His audience will pay

Laporte: His audience will determine his salary.

In all the discussions I’ve seen of the virtues and evils of paywalls, I have yet to see any mention of the relation of paid content to social media. This is perhaps because paying for content comes off, even to its proponents, as a kind of uncool, regrettably antisocial gesture (“we don’t want to charge you, but we have to in order to survive”).

It’s not so much that money has no social role—it obviously does. But the models commonly discussed, whether subscription or micropayment, don’t quite have the give-and-take, equal-participant ethos inherent in the concept of markets as conversations. The very word paywall implies just how antisocial the concept is: “you can’t come in here unless you pay, buddy.”

It’s no surprise that most of the noise about the need for paywalls is coming from old-media behemoths like Rupert Murdoch’s News Corp.  or Mathias Dopfner’s Axel Springer. They want to set the terms of the payments, naturally, and I don’t imagine those terms will be very favorable to the content purchaser. In this model, payment doesn’t necessarily reflect what I as consumer think the content is worth, but what the provider thinks he can get for it. Can I get a refund if the article I buy is disappointing, or a discount if the site I subscribe to goes through a spell of lame or irrelevant content? Not likely (after all, paid circ sucks).

A very different model for payment has recently been proposed by new-media pioneer Leo Laporte. Laporte is the founder of the TWiT network (not related to Twitter, as he would be the first to exclaim here), a burgeoning new-media business producing podcasts and online video.

Though Laporte never erected a paywall per se, he originally intended his business to make all its money from voluntary payments. The money came in, but not at a rate sufficient to fund his plans for growth. Eventually, he started taking advertising, leading to annual revenues this year of between $1.5 million and $2.5 million.  As donations shrank proportionally as a source of revenue, Laporte began debating aloud on his programs whether he should continue to take payments from his audience.

Yesterday, he announced that he will retain the contribution model, but with an interesting twist: his pay as CEO of TWiT will now come strictly from those payments.

“Up to now I’ve been taking my pay from TWiT’s general fund (along with all the other employees). Not any more. From now on you’ll pay me directly with your contributions. I won’t take a penny out of the operating funds. Think of your contributions as a tip jar. If you like what I’m doing with TWiT I hope you’ll contribute $2 a month (or more or less depending on what TWiT is worth to you). If you are unhappy with our direction, you can cancel your contribution completely. Believe me, I’ll notice. Your contributions will have a direct impact on how TWiT is run – because they’ll have a direct impact on my personal bottom line.”

As Laporte notes, his risk is not huge—his “day job” as host of the nationally syndicated Tech Guy radio show pays well. But clearly he will have a powerful incentive to perform well in his roles as CEO and host. In keeping with the key social-media value of transparency, he will also publish the amount contributed each month.

We won’t know for quite a while how this experiment turns out, and it is not clear how replicable it is. But as a way of making paid content personal and integrating into the social-media ethos, I think it has already succeeded.