A partnership between ad-blocking software provider Adblock Plus and Swedish content-funding startup Flattr is being publicized as an altruistic way for consumers to support publishers and content creators without having to view online ads. But is an additional product — one that further distances publishers from their audience and discourages direct communication — really what the digital industry needs?
With an increase in the use of its ad-blocking software depriving online publishers of the ad revenue required to support free content, Adblock Plus has announced the development of Flattr Plus. The new product, due to be launched in beta by the end of this month, allows its customers to make a voluntary financial contribution to the publishers whose websites they engage with. (Though they can still visit those sites without making donations.)
So will publishers be lining up to sign up for Flattr Plus, and can it really provide a sustainable, ad-free content compensation solution?
Publishers — particularly large media companies — will certainly not view this feature as an olive branch from Adblock Plus to the online publishing community but rather as another way of leveraging ad blocking to participate in the revenue stream associated with publishers’ content. They are sure to see the feature as an extension of Adblock Plus’s existing strategy of whitelisting fees — which has been likened by the Interactive Advertising Bureau (IAB) to extortion — especially as Adblock Plus and Flattr are expected to keep a portion of the revenue generated from the partnership.
Following the Newspaper Association of America’s negative reaction to the Brave browser, which also offers an alternative publisher compensation scheme, there may well be a similar response to Flattr Plus.
Publishers are required to create a Flattr account in order to be paid, and sign-up rates from premium publishers are expected to be low.
In addition, it remains to be seen how publishers — particularly premium publishers — will respond to working with a company that has associations with The Pirate Bay, a site that encouraged peer-to-peer file sharing. Organizations such as Viacom, Warner Bros. and NBCUniversal were among those that joined to fight online piracy platforms such as The Pirate Bay to safeguard revenues. Now one of the original founders of The Pirate Bay, Peter Sunde, has moved on to develop Flattr.
While the announcement of Flattr Plus does raise awareness of a positive message, in that it furthers the conversation around content compensation, for premium publishers in particular, it doesn’t provide a realistic solution.
The unknown variable of Flattr Plus is whether users will make voluntary donations in return for content that requires significant investment to develop. This business model will be unlikely to resonate with premium publishers that put a lot of effort and resources into creating great content experiences.
It is hard to imagine publishers will rush to join this “tip-based” business model; you would never expect a company that provides a tangible product to commit to such an unreliable revenue method.
Think of a hotel that provides a luxury overnight stay, with a spacious suite, access to a guest lounge, and all-round top-class service, where the guest is allowed to choose how much they’d like to pay.
Before long, the service would inevitably go downhill, as the hotel would be unable to sustain the outlay for items such as staff wages and expenses to maintain the property and to ensure the continuation of great service.
When it comes to solutions, we expect the large majority of premium publishers will choose to enter into a direct dialogue with their audiences via “choice moments,” giving their users a choice on how they pay for content vs. accepting the gratuities bestowed upon them by ad-block users.
When presented with a choice, users can regain control over their experience with the respective publisher, and choose to move forward with a compensation model that makes sense to both the publisher and the consumer. This could be a traditional ad-supported model, a customized ad experience, micropayments, or for some, a Spotify or Netflix-style subscription service.
While some incremental friction may be introduced as publishers implement these new types of content compensation schemes, this dialogue is necessary to move toward the explicit value exchange between consumers and media owners and ensure the long-term sustainability of online content.
The growth of ad-block usage highlights a clear need to adapt the way online content is funded, but taking the conversation around monetization out of publishers’ hands is not the answer.
Consumer choice will be at the heart of any viable solution, and Flattr Plus has elements of this, but for premium publishers, any long-term solution will require direct dialogue with their users about the appropriate form and level of compensation.