The Interledger Community 🌱: David Gehring

New revenue streams for News media - Grant Report #3

David Gehring — Wed, 26 Oct 2022 04:45:21 +0000

Project Update

This two year project was focused on harnessing open technologies to power new revenue models for quality news organizations as they do the important work of journalism, which is vital to healthy communities, economies and democracy.

Starting in August 2020, the first phase of the project was dedicated to:

1) Engaging news media companies of all sizes to explore alternative decentralized revenue models.

2) Working with publishers to implement foundational DML technology, enabling the creation of publisher networks that could facilitate testing new technologies, including Web Monetization.

For the second phase of the project in 2021, we did the engineering work to build a multi-party payment system designed to incentivize content sharing across distributed networks. For the initial payment pointer platform, we partnered with UpHold to provide a flexible multi-party financial transaction platform and tested the pipes. We created DML managed accounts for each of the publishers involved in the initial trial with a plan to transfer those accounts to the actual publishers if the trial proved beneficial. See Grant Report #2

Once built and to further test the model, in January 2022, we launched the experimental payment system across the Covering Climate Collaborative, a project managed by the Local Media Association and funded by Google.

The Covering Climate Collaborative supports and amplifies the work of local newsrooms reporting on critical climate issues. At this point, the collaborative has over 20 publishers contributing content to embeddable collections through the DML curation platform and is embedded using DML distribution technology on ten local news publisher websites across the U.S.

We wanted to pick a topic-based journalism collaborative to better understand the potential economic value from multi-party payments for engagement with a specific topic that may lend itself to consumer subscription, donation revenue and corporate sponsorship models.

Additionally, collaborative journalism projects have two challenges this project directly addresses:

Limited economic sustainability beyond grant funding.
Not enough incentives for partners to share each others' content beyond grant mandates.

While hundreds of publisher websites now have DML code embedded, this limited test’s goal was to implement a payment model that would allow us to track economic activity based on user engagement across a discreet content sharing network. The level of activity would determine whether this was a model that had the potential to scale and power new and meaningful revenue streams for quality news organizations and local news publishers.

Progress on Objectives

As outlined in our original proposal, our key objectives were to establish a scalable revenue model for content syndication between national and local publishers and to empower the news publishing industry to benefit financially from Web Monetization. We were able to establish the model on the technical side by meeting our implementation objectives and on the business side with national and local publishers through a successful pilot.

In our original proposal, we were expecting a relatively straight forward implementation of web monetization, but issues on the browser side led us to modify our approach.

When we launched the test in January 2022, we set it up to receive notification from UpHold for each financial transaction.

In the first few months of the year, hardly any notifications came through and activity was low in the pilot group of publishers.

Then, in June, Graham Media Group, which owns several local TV stations in the South East, placed climate collections on their weather pages. Engagement grew exponentially due to the popularity of the weather page on local news sites for people in hurricane zones.

We also found that the economic model benefited different partners in different ways. For example, some partners provide content, but do not embed. Others embed, but provide fewer articles. This payment model rewards both ways of participating, so that niche news outlets that produce high-quality journalism but do not have a large reach can leverage the reach of mainstream partners. Likewise, those mainstream partners still benefit from their audience reading quality third-party content through the DML on-site reader experience without linking away. The outlets that participate on both sides of the marketplace benefit the most.

These findings emboldened us to develop the model further.

Key Activities

Our key activities focused on developing national and local publisher partnerships, implementing the technology needed to track and remit payments and testing the model for potential scale. We were able to complete these activities.

Based on the strength of the Climate Collection performance, showing meaningful audience engagement with the content, we then developed a plan to roll out the payment model more broadly and across more content topics.

We are now working with potential funders to support the work to scale the distribution/monetization network in 2023 using the multi-party payment model to power new revenue streams for local news publishers and contributing content creators.

As the network scales, new and sustainable funding sources across consumer payments, foundations and corporate content marketing budgets will all be leveraged to grow a new revenue model that is more aligned with the decentralized architecture of the web serving quality news organizations and content creators.

Communications and Marketing

During the test from January 2022 to date, our public communication about the project was limited. DML already had sufficient scale to measure the system's performance in a limited and controlled network.

Now that we are planning to extend the system much more broadly, we are in discussions with various funding sources to catalyze network growth through publisher engagement. With that funding, we anticipate much more business development, communications and marketing activity in the coming months.

We have shared this work with industry association staff and various foundation staff through presentations and will soon release a case study on the Covering Climate Collaborative.

What’s Next?

On top of the technical foundation built with funding from the original grant, we are now excited to grow a new and material revenue stream for local news publishers in the U.S. based on a multi-party payment system that consumers, foundations or corporate sponsors can fund.

Additional Comments

At Distributed Media Lab, we believe a multi-modal revenue model is fundamental to the future of local news media specifically and quality original independent journalism in general.

This project was an essential step in demonstrating potential economic models derived from content sharing and has helped us make a case for expanding the implementation of Web Monetization in the form we've developed.

Being more naturally aligned with the inherent disaggregated audience and economics of the open web, we believe this new multi-party payment model will serve the work of journalism, thereby empowering democracy.

And there's no time to waste!

Grant Report #2

David Gehring — Mon, 05 Jul 2021 17:50:11 +0000

Project Update

The goal of this project is to establish market incentives for broad adoption of Web Monetization across the news publishing industry.

We are doing that by creating technologies for national and local news publishers to grow their business by capitalizing on the uniquely decentralized architecture and economics of the open web.

Our ambition is to provide the news publishing industry with a new decentralized reader revenue model that aligns more naturally with the open web’s decentralized design.

As described in our previous update,

“Our project is focused on developing new reader revenue models to support quality news organizations as they do the important work of journalism which is vital to healthy communities, economies and democracy.

In the initial few months of the project we focused primarily on:

1) Engaging with news media companies of all sizes to explore reader revenue concepts.

2) Working with publishers to implement foundational DML technology, enabling the creation of publisher networks that will facilitate the Web Monetization pilot.”

In this second phase, with the benefit of a growing network of participating publishers in the DML Network, and a clear understanding of market requirements for adoption of Web Monetization, our focus shifted to building the necessary technologies and enabling payment pointers before there is a scaled market opportunity waiting for publishers on the other side of the engineering and marketing work required.

Clearly, broad publisher support for Web Monetization on its own faces the classic challenge when starting a two sided marketplace from scratch. Namely, what incentive is there for publishers to do the work to support Web Monetization before there is a scaled and lucrative market of consumers with funded wallets waiting to be spent?

To address this challenge, DML integrated Web Monetization into the DML platform. On its own, the DML platform provides publishers with valuable editorial experiences driving deeper reader engagement and new advertising revenue opportunities. These inherent benefits power a growing network now reaching hundreds of publishers and millions of consumers. Through the DML network, we are positioned to support a pilot without requiring publishers to do any work before that work has its own inherent value to the publisher.

The DML platform

Building support for Web Monetization into the DML platform enabled us to run a variety of initial tests. Those tests were primarily for the purpose of determining whether the plumbing would work across an AMP based network and secondarily for the purpose of ascertaining the presence of digital wallets “in the wild” as defined by the DML Network's reach across primarily local news media publishers in North America.

Over a two week period, the test ran on approximately 135 different news websites. Users opened the DML Viewer (with Web Monetization) approximately 150,000 times during that period.

The Web Monetization enabled Viewers included primarily politics and sports related content.

The result of this test confirmed our assumptions about the current technical and market limitations for Web Monetization as a scaled payment method and revenue opportunity in this context.

Encountering specific limitations informed our view for how best to move forward. Effectively, it became clear that initial adoption by the publisher community would require more robust platform capabilities on the payment side of the solution.

Specifically, we realized that broad and rapid adoption would require DML initially to manage wallets on behalf of participating publishers. As the revenue stream becomes material, we could then more safely expect publishers to take action on their own, setting up and managing their own wallets to benefit from this new distributed reader revenue stream.

With this market requirement in mind, DML partnered with Uphold to integrate Uphold’s payment capabilities into the DML platform. This enables the DML platform to manage both the payer and payee side of the publisher relationships. The implementation will create DML managed wallets on our platform for each publisher that is enabled for Web Monetization through our platform. The publishers will be able to collect subscription and contribution funds through existing channels on their web sites and then fund a payer wallet accordingly. These funds can then be distributed to payee wallets as users engage with creator publisher content on the host publisher websites. Publishers can cash out the balance once they hit a certain threshold to their own Uphold account.

While this will be the initial mechanism leveraged by the DML platform, payee publisher wallets will also be configured with Payment Pointers to allow for browser level integration with other Web Monetization providers such as Coil.

Progress on objectives

Initially, our goal was to launch a publisher pilot in Q2, 2021. However, due to the specific technical and market challenges referenced above, we needed to take the time to build solutions before a meaningful pilot would be viable.

At this point, those solutions are built and available for a pilot program.

Key activities

Now that we have the components in place to run a meaningful pilot, we are designing the pilot program details.

The program will involve host publishers with DML powered editorial experiences embedded on their site (enabled for Web Monetization by default through the DML platform integration) and opted in for measuring audience engagement and performance. These metrics will be used to inform both a Subscription and Contribution revenue model depending on the editorial experience.

We will be using some of the grant funding to compensate publishers for participation in this program during the course of the pilot term, which we anticipate to last 6 months.

Communications and marketing

Our communications have been primarily directly with publishers as they consider participating in the upcoming pilot and with industry associations.

We anticipate broader communications as the pilot gets underway and we have results to report to the broader community.

What community support would benefit your project?

We are eager to get in touch with news media and local media publishers about the pilot! Also, we continue to benefit from reading about the progress of other grantees as those lessons all fold into our efforts as we progress.

Additional comments

In our last update, we mentioned,

“The only thing we’d like to add at this point is that it is tremendously exciting to participate in what feels like it will be a transformational moment in the developmental life cycle of the web. For too long, the web has not offered an inherent and open infrastructure for payments between parties. This effort is adding an economic layer to the web that has the potential to transform entire industries and we are very excited to be involved!”

This sentiment remains true as we progress down the path toward hopefully establishing a new and more robust market framework for quality content and creators across the digital economy.

Grant Report #1

David Gehring — Tue, 15 Dec 2020 01:34:00 +0000

Project Update

Our project is focused on developing new reader revenue models to support quality news organizations as they do the important work of journalism which is vital to healthy communities, economies and democracy.

With financial support from Grant for the Web, Distributed Media Lab is harnessing Web Monetization to explore new revenue streams specifically designed to benefit local, national and global news organizations.

In the initial few months of the project we have been primarily focused on:

1) Engagement with news media companies of all sizes to explore reader revenue concepts.

2) Working with publishers to implement foundational DML technology, enabling the creation of publisher networks that will facilitate the Web Monetization pilot.

Progress on objectives

The goals of this project are sweeping in scope. Distributed Media Lab is working to harness Web Monetization to support distributed reader revenue streams that benefit local to global news organizations thereby providing an incentive for those media companies to drive consumer adoption of Web Monetization forming a virtuous cycle.

Foundational to this goal is establishing a coalition of publishers with aggregate scale to participate in the effort and willing to integrate the required technologies.

Over the last couple months, DML has engaged with numerous publishers from large to small briefing them on the anticipated business model and gathering their feedback. The result of these discussions has been the composition of business models enabled by Web Monetization and designed to provide a new distributed revenue stream for publishers of quality original journalism.

To support a diverse and disaggregated industry, a variety of models have emerged across consumer donation, membership and subscription revenue streams. However, while the models are diverse, the technologies required to enable them needs to be consistent.

On the technology side, we have zeroed in on the core components necessary to support the widest range of models. Included in our development is an AMP extension for Web Monetization and support for Web Monetization in the core DML distribution platform. These two components enable both sides of the market, namely the embedding publishers and the distributing publishers, to benefit from the new consumer revenue streams.

While the models have become clear through our discussions with publishers, it is still early days in the development of the core technologies and we are working toward piloting the key components in early 2021.

Key activities

Establish financial incentives to drive broad market adoption.

This year we have added several hundred publisher sites to the DML Network. This community of publishers is the foundation for creating publisher collective networks with distinct reader revenue offers powered by Web Monetization on the DML platform.

One example is our partnership with the Local Media Consortium to launch The MatchUp, a sports initiative currently rolled out to over 60 local news websites across the U.S.

Another collective we are developing is with Hothouse and Covering Climate Now to distribute a Climate Change and Environment focused collaborative, with a potential for web monetization based donations to several hundred participating publishers.

Add to the team to support engineering and expanded publisher engagement.

In the last couple months, we have hired four new team members to help grow the publisher network, support the roll out and develop core technologies.

We are still looking for more engineers, product and partnership team members!

Communications and marketing

In October, we did a Q&A at the W3C’s annual conference, discussing the use case for Web Monetization for publishers.

The rest of our communications have been primarily with publishers, associations and technology partners while we are still in the building phase of the project.

What’s next?

We are very excited about initial feedback and enthusiasm from the news media sector across large and small publishers. From here, we are continuing to focus on building the core technologies for a publisher pilot with a limited group of publishers in early 2021.

The pilot will be focused on testing the core technologies as well as analyzing the economics of reader revenue in a distributed model.

What community support would benefit your project?

We’re still early in this project, but when the time comes to roll out the pilot to participating publishers, there are a lot of ways the community can support the effort that echoes the suggestions made already by another grant recipient, Free Music Archive.

This is a nascent technology with a very new value proposition for both creators (in our case, news media publishers) and consumers. A common language that asserts definitions for describing the technology and function of Web Monetization would be very helpful. Toward that end, we’d be very interested in participating in a broader community conversation perhaps in a virtual conference, around the topic of how to best communicate broadly about Web Monetization. We realize our target audience, news publishers, is quite distinct from the individual artist or creator, and finding language that makes sense most broadly would be very helpful.

Additional comments

The only thing we’d like to add at this point is that it is tremendously exciting to participate in what feels like it will be a transformational moment in the developmental life cycle of the web. For too long, the web has not offered an inherent and open infrastructure for payments between parties. This effort is adding an economic layer to the web that has the potential to transform entire industries and we are very excited to be involved!