Co-founder of Pirate Bay’s new service to monetise online content

Flattr is a “social” micropayment service that let content creators across the web, be it musicians, writers or filmmakers, get some remuneration from the many people who appreciate their content – but don’t have an easy way to show their love. It’s similar to “Likes” on Facebook, but that every time you click the Flattr button on a site you allocate a piece of your “Flattr budget”, set aside by you to show online appreciation. See the video about it below.

Interestingly, it is created by Peter Sunde, a co-founder and former PR front man for Pirate Bay, the torrent tracker site. A “pirate” helping people to pay for online content? Kind of ironic, right? Sunde himself says it originates from the same idea, that information (in this case money) should be shared and the world should be flatter, freer and more open. “You can’t fileshare money, but if you could, it would be Flattr,” he says.

According to one blogger he has had €875.89 for the month of June 2010 from Flattr and the amount has increased steadily upwards. Plus Flattr (as in flattering someone and a flat-rate payment model) is already in use by two major German newspapers, completely unprompted: taz.de and Freitag.de.

However, for Flattr to really work it would have to reach a critical mass, i.e. become huge. The service aims to have at least a million participants by the end of 2011, but even that would represent only a tiny fraction of the internet’s 1.5 billion or so users. For comparison, PayPal has over 230m registered users, 87m of whom are active. It also needs to give its users more options to customise payments when they want to.

The Economist on Flattr: “In an essay, “The case against micropayments”, Clay Shirky of NYU summed up the main problem in three words: “users hate them”. The trouble with micropayments, he argued, is that “users want predictable and simple pricing” and, as a result, “anyone who can offer flat-rate pricing becomes the market leader”. That was back in 2000. Mr Shirky reiterated his point in another essay, “Fame vs fortune”, sparked by the launch of a micropayment system called BitPass. More recently he wrote a gloating blog post when BitPass died.

Flattr tackles the problem of Mr Shirky’s transactional mental costs in two ways. By letting users spread their monthly donation as thinly as they desire, Flattr discards the notion of per-item value. Clicking to make a donation on one item does not prevent you from clicking on others; it just shares the money out more widely. And by making payments optional, and allowing people to decide whether to click after reading a blog post or watching a video, users are not forced to guess whether their purchase will be worth the cost. Meanwhile, banking fees are minimised by accepting, for example, €24 at once instead of €2 per month.”

Imagine a world where creatives are paid according to how many flattrs they attract? It may still happen…

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