Strategy

Media: Flattr turns popularity into revenue

A new micropayment system aims to turn online popularity into real revenue.

With the viral popularity of Facebook’s ‘like’ button, or Pandora’s ‘thumbs up, thumbs down’ music-rating system, giving virtual praise is all the online rage. The creators of Flattr, the latest in online micro-payment programs, want users to put their money where their thumbs are.

‘We think people are willing to pay for stuff on the Internet, as long as it’s on their terms,’ wrote one of the co-founders, Linus Olsson, in an e-mail. ‘Information should be free, but everyone should also have an easy way of giving something for it if they want to.’

The five 30-something Swedes who created Flattr set out to solve a problem: how can people donate small sums of money simply for online content they like? A payment site such as PayPal isn’t conducive to giving small amounts because it sends users to an external site and requires the buyers or sellers to pay 30? and a 2.9% fee on every transaction.

So in February, the group of web developers launched their own model: when users sign up, they decide on a monthly amount to put in their Flattr account. While surfing the web, they can click on any website with a Flattr button, and at the end of the month, the sum is divided evenly amongst the number of clicks and doled out to the site creators.

Montreal-born Michal Hacio doesn’t expect to receive more than a couple of euros from Flattr each month after having added the button to his website in May. He wants to help spread the idea beyond its current niche following and prefers it to using Google AdSense, which he says forces readers to stare at ad content they’re not interested in.

‘Most people signed up are techies,’ says Hacio, who spends about 48 hours a month on his website about cultivating edible fig trees in Canada. ‘If it’s going to reach the general public, there has to be more diverse content to Flattr.’

Jeff Anders, CEO of the Toronto-based online media startup the Mark, says if Flattr wants to become a viable model for content creators to make money, they need to partner with big websites such as the Huffington Post or the CBC.

‘That Flattr button has to be everywhere,’ says Anders, who started the Mark last May. ‘If there’s not enough people Flattring or not enough content to be Flatterd, nobody will make enough money.’

Flattr currently has 10,000 users, all of whom must donate a monthly rate, and the number is growing daily.

Vancouver-based software developer Nobert Papke hopes that Flattr is ‘a bit of a game changer.’ After reading about it on a social bookmarking site, he signed up and put the suggested ???2 in his account.

Papke sees Flattr as more of a tip jar than an income stream, something to help cover expenses such as bandwith. So far this month, he’s clicked on six sites, which works out to ???0.30 for each creator. ‘With Flattr, you don’t have to think in terms of money,’ he says. ‘It’s ‘I like it or I don’t like it’ and that’s a simple thing.’