Did a Convicted Criminal Launch the First Workable Micropayment System?

If you’ve ever felt the desire to support - monetarily - the people who create the content you love most, then you know what the online “tip jar” is for.

The problem with micropayments, which have been the next big thing since the dawn of the internet (read this Wired piece on micropayments from 1998 and weep) is that they are overly complicated. That’s why the number of times you’ve dropped change in a musician’s hat or a beggar’s cup dwarfs the number of times you’ve bothered to spend five minutes wrestling with Paypal just so you can give your favorite blogger enough change to buy a cup of coffee.

So imagine the following: every month, you put at least a couple bucks into an online account, in a sort of subscription to the whole concept of micropayments. At the end of the month, every site you flagged - each with a single Facebook-Like-style click - gets a portion of the money you dropped into your online tip jar.

It’s a system so dead-simple many are bound to think it moronic. But remember: there was a time when we all suspected that Twitter was the stupidest thing ever.

The chattering classes have been nattering about Flattr since its launch in February, in part because of its illustrious / notorious co-founder: Peter Sunde, one of the founders of the Pirate Bay, who was convicted last Spring of making copyrighted content available and is theoretically liable for a portion of the nearly US $4 million in damages resulting from the case. (Sunde asserts that the conviction will be tied up in appeals so far into the future that he may never serve time or pay damages.)

But only recently have Flattr’s first round of users revealed how much they’re making from the service. It’s not chump change, considering that the service is in private beta and doesn’t seem to be used by anyone outside the elite of the German media and blogosphere:

According to the Financial Times, Taz.de, a German newspaper, cleared €988.50 in June, while “Netzpolitik.org, which promotes “digital freedoms”, earned €576.53.” Other users reported payments in the range of a few hundred Euro for the month of May.

On the other end of the spectrum, Flattr announced on their own blog that as early as April, thousands of Flattr users were receiving at least something in the way of payments, however small.

Flattr has all the ingredients for virality built right in - like Digg, which rewards websites with its own kind of capital (pageviews), site owners have an incentive to put a Flattr button on any content that users might enjoy, which is its own advertisement for the site. In addition, anyone who wants to receive money from Flattr must be a dues-paying member. It almost sounds like a Ponzi scheme until you remember that “Flattring” more content doesn’t increase the amount of money you pay, and all but 10% of your fee (which goes to the site as a commission) goes directly to content providers.

Read more at Tech Crunch Europe.

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