Ever since the web was spun, the dream of publishers has been to extract money directly from readers’ wallets, preferably with every click they make. With very few exceptions this hasn’t worked, and even when it does work you have to wonder what opportunities are being missed along the way. After all, everything we read (including this column) demands from us that most precious commodity of all — our time. The price of a newspaper covers the cost of getting it into your hand, and once you pay your ISP bill, web pages cost nothing to deliver.
Still, there are plenty of people continuing to tilt at that windmill, some of them well-funded. And there is information worth paying for. Rare data the reader can turn into cash is well worth paying for.
Qpass Inc. of Seattle offers a model for handling payments on such files. It provides payment processing, and also customer service and merchandising tools, in exchange for a commission on the money it collects. It officially launched last month with five sellers — Morningstar, The Journal, The U.S. Department of Commerce, Corbis and IDG’s The Industry Standard. The fate of the technology shouldn’t depend on the fate of these five sellers (selling The Standard makes no sense to me) but the Clueless might see it that way.
Qpass’ vice president for marketing, Cornelius Willis (a former Microsoft spokesman) called me the other day and we talked about it. Qpass is privately held and doesn’t like discussing numbers, but Willis did say using it costs a publisher more than he’d pay for a mere credit card transaction. (On the Internet, merchants pay an account set-up fee, a transaction fee of about 50 cents (set against a monthly minimum) and a 2-5 percent discount to the bank for handling the money.) “Our pricing scales,” Willis added.
Currently the lowest-priced file it’s selling is a U.S. Department of Commerce report with a $1 charge, but Willis said another merchant is ready to go with a 75 cent offering. “We’re competitive at any price point. We’re not providing just payment processing, but customer service, merchandising tools, and the maintenance of the infrastructure. The average price of a file bought through Qpass is $5-6. The average purchase going through the network is $9.50.
What’s new is that Qpass can handle affiliate marketing. In the first deal of this type Morningstar is the merchant, Bloomberg the affiliate. Qpass doesn’t get involved in those agreements, but whatever the terms, “We implement the deal. We have a set of tools to let us code that relationship so all the parties get their remittance.” Setting up the system on a site costs in the low five figures, Willis said. Obviously this won’t work for everyone. Previous attempts to do what Qpass does failed, Willis said, because they only offered payment processing. Qpass is a “full solution that gets publishers and web developers into business.”
Willis is confident that Qpass will grow quickly. “Ten sites last month took home 85 percent of all Internet ad revenue, and that percentage is going up. What that means is the vast majority of publishers, even very large publishers, don’t have a viable business on the Internet, not one that can fund innovation. They’ve got to figure out a revenue stream.”
Your Clue isn’t that Qpass is the answer to your web publishing problems. But if you do offer truly valuable data that is also rare and/or time-sensitive, it could be part of the solution.