A successful micro payment solution, a way someone could give 30 pence to read a web page, has been a dream of web content publishers like the Economist, FT and so on since the dawn of the web.
Usually it has failed as a concept due to two factors:
- high relative transaction costs (PayPal) who wants to pay a bank 20 pence to handover 30 pence?
- people spend too much time thinking about the purchase – most people apply the same due diligence to all purchases they make, only varying slightly depending on the purchase price (if you are the type of person that buys the first suitable chocolate bar you see in a shop, you’re probably going to buy the first suitable house you see).
i.e. there is high relative thinking time cost to a micro-payment – 5 mins to buy a CD wirth £15 is okay but spending 2 mins to buy a blog article for 30p is a waste of time
But, in social media, like the rest of the web, there is still a demand by content producers (now singleton bloggers) to monetise their content. Charging a monthly subscription (the solution favoured by the traditional media brands) isn’t going to work as they simply don’t have enough content to warrant it. A newspaper provides thousands of content items a day, a blogger struggles to produce one a day.
The tool lets you create a tip fund (like £2) and then quickly give 50p here and there to bloggers when you appreciate their posts. If you haven’t got a fund together you can just pledge a tip until you have paid in enough to your fund. According to Reinier Zwitserloot, from Tip it, about 75% of pledges are already paid up and the average tip is 50p or $1.
So who is using it? Well, take up is about 50% bloggers and 50% donation drives and service requests (like competitor service chipin). They are moving into providing the service for music artist pages, remember last year’s Radiohead tip jar approach to releasing an album.
So, tipping is being used on the social web. However is it the finished product?
For me to leave a tip, I really need the social pressure as when leaving a restaurant with friends (a cynic might say the real customers to whom I want to demonstrate my generosity ;o).
Tipping on the web might work if my friends can see I’ve been to a site (mybloglog, facebook connect) but forgot to leave a tip… so for tipping to work on the social web we need to mash-up tipit with facebook connect.
Toby just read your blog and left a tip of 50p…. that might encourage others to do the same.