Posted by Stu at 10:22 AM
Flattr is intriguing – will it work?
I mean will it continue to grow, will people renew their subscriptions and ‘normal’ people join (by ‘normal’ I mean people who are not early adopters – people techie enough to have a PayPal account perhaps).
In case you don’t know, the principle of Flattr is that you pay monthly fee (minimum 2 Euro). Flattr take 10% of that and the remainder is divided between people you ‘Flattr’ by clicking on a Flattr button on their website. You can only receive income from Flattr is you are a paying member. So there are a couple of reasons for joining:
- You believe that you will get Flattred more than 2 Euro per month and therefore will make a profit
- You would like to pay for stuff that you currently get for free
When you factor in Flattr’s 10% cut then have need ~11% more coming in to the system than gets distributed to people joining for profit. If some of the profit seekers do not Flattr other content then their subscription goes to charity and there is a need for a greater ratio of incoming to outgoing payments.There are a couple of things that Flattr needs to do to attract and keep users:
- Attract enough donators to allow most profit seekers to at least break even – if you’re not losing money then you’ll probably stick with it
- Attract enough content providers to persuade donators that they will see enough things to Flattr to justify their 2 Euro per month – if you don’t Flattr anything then you’ll feel like it’s a waste of money (although in that case the subscription goes to charity)
That’s my personal view anyway. I could be motivated by either option. If enough sites that I care about start displaying Flattr badges then I’ll happily join and start splitting my 2 Euro (1.80 Euro net) per month. I also, with friends, have a couple of half developed content providing sites that we’d be happy to put the work and bandwidth into if we thought it wouldn’t cost us money – i.e. if we could break even or perhaps even make a bit of a profit with Flattr.
For what it is worth, I hope Flattr succeeds. The principle of easy micropayments is good and I think it could be helpful particularly to small free software projects – i.e. the ones with one or two contributors. The likes of KDE can attract larger donations and supporting members but there are many applications, artists, cartoon sites outside of KDE that I would happily give a share of 24 Euro per year. The problem is that under payment options before Flattr a typical payment of – what? – 50 cents would get swallowed up in admin fees and take a few minutes to process.
Flattr’s 10% cut looks eye wateringly high at first, but compare it to PayPal where the fee is 3.4% plus 0.20 GBP for transactions under 1500 GBP. On a micro payment of 1 GBP that would come to 23.4%. If Flattr becomes as ubiquitous as PayPal with the associated economies of scale then I hope the fees will drop.
Rationally, I would wait until I see Flattr badges around more often (to make Flattr an effective donation system for me) or until I have content that I think might generate a profit. But as I can test it for a month for 2 Euro I’ll probably just give it a go and set up an account when I have a spare minute.
Tags: Join the Game, money, offtopic, web technology
