Business Models, Strategies, Issues and Trends
5 Microfunding and micropayments
5Microfunding and micropayments Summary The world’s appetite for news and information remains ravenous. Each day millions of people worldwide read free content in the online edition of quality papers like The Guardian and The New York Times – many times more than the number who read the print edition. The Pew Research Center found a tipping point occurred in 2008: More people in the US got their news online for free than paid for it by buying newspapers and magazines. News organizations are now urgently looking at ways to get people paying again – either by charging for online content or by less direct ways such as crowd-funding, in which they receive small amounts of money from a large number of contributors. The money allows those organizations to produce quality journalism, and re-invest the profits into the next project. Crowd-funding is a form of micro-financing. In the context of journalism it is deceptively simple: A broker, which might be a media organization, gathers contributions from a large number of small investors. It uses that money to produce a specific form of reportage, such as a documentary or a piece of investigation journalism. Once the story is sold, the investors get their money back or it is re-invested to fund another piece of journalism. The financial model takes its name from crowd-sourcing: a way to use a large public, via the Internet, as an information resource. Many enterprises have used crowd-sourcing for research and development to design T-shirts, or supply stock photographs, or...
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