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Flattr – great idea, but a big mountain to climb!

Flattr is a new service which describes itself as a social micro payment platform that lets you show love for the things you like and helps support the people who create it.

I do really like the idea of Flattr, but sadly I think it is a model that has several major barriers to success. Flattr, in a nut shell, works as follows: you pay a certain fixed amount per month (in my case about £5) – as you encounter items that you want to reward (be it a photo, a video, a blog post, a useful widget etc.) you hit their ‘Flattr’ button. At the end of each month Flattr splits your monthly payment equally between those items.

So if you Flattr 5 items, they get £1 each; Flattr 50 items, they get 10p each; Flattr 500 items in a month, and they get 1p each. Once signed up for a monthly payment, you can then get ‘Flattr-ed’ for your content.

Here is Flattr’s video which explains the concept:

Critical Mass

The first issue is critical mass: you can only Flattr someone if they use Flattr, and thus far there are precious few sites I have come across which do.

This obviously means that the sites I have ‘Flattr-ed’ have got a big chunk of my £5 pie, and to be fair Flattr is still in private beta, but eventually I will stop using the service if I can only reward a handful of sites.

The reverse is also true – how long will I be happy giving website space to Flattr buttons if no one uses them to Flattr my content?

Flattr ultimately need critical mass to make it work, and quickly – it needs sites with Flattr buttons and users with Flattr accounts!

Communism or Capitalism

Ultimately there is a fixed pot of money floating around Flattr. This means one of two things will happen:

1) Everyone will end up receiving from the Flattr pot roughly the money they put in.

2) A minority of users (the content producers) get back more than they put in and the majority (the content consumers) get less than they put in.

Option one (which judging by the top items on Flattr is quite unlikely) means that the only winner is Paypal (who charges a transaction fee on each monthly payment) – we all may as well just use Facebook ‘Like’ buttons.

Option two will only work if the majority of users are willing to be content consumers – users willing to pay (albeit a small monthly fee) for content that is available for free and to not receive money for anything they produce.

Whilst I would love to think we live in a world where this could happen, it is more likely that Flattr will end up consisting of a minority of content producers who make some money and the majority of content producers who do not – this is not a model that can last long term.

Flattr need to attract content consumers, and convince them to reward content they love (“don’t just ‘like’ something – love it!).

Will the pounds look after themselves?

Quite a few reviewers of Flattr has suggested it can replace ‘Donate’ buttons as an income source for content producers. I am not sure this is true – when I do decide to donate, usually for software I am using on a paid-for project, I will donate £5 – £15. If I only used Flattr, then it would be more like pence – of course more people will donate, but will the pence add up?

Conclusion

I would love to be a part of an internet where consumers of free content volunteer to reward their favourite content producers. Sadly I do not believe this is the case (yet?), and I think Flattr has a big mountain to climb to succeed.

In the short term I will continue to use Flattr in the hope that I am wrong – if you would like to give Flattr a try, give me a shout on Twitter (I am @daylightgambler) as I have a handful of Private Beta invites to give away!



Comments

Eileen
Reply

Really appreciate your support of the concept and giving it a try! Indeed it’s still private beta and that in itself is probably the biggest barrier to critical mass/adoption while we iron out all of the possible wrinkles and ensure that the system works as it needs to. Meanwhile…

>Flattr need to attract content consumers, and convince them to reward content they love (“don’t just ‘like’ something — love it!).

Completely agreed with you here, and I think you’d be pleasantly surprised by the early indications (we’re so excited!) regarding the number of users who don’t have their own “things” and are clearly users to flattr others. More on this as we get a larger sample size. Finally,

>I will donate £5 — £15. If I only used Flattr, then it would be more like pence — of course more people will donate, but will the pence add up?

Easiest way to resolve this is to increase your monthly Flattr amount (now maximum of €100) 😉

But in all seriousness, thanks again for your early support and spreading the word. We’re definitely all hoping to prove you wrong — and then we can all celebrate together!

daylightgambler
Reply

Hi Eileen – thanks for your positive comment.

I do truly hope it does work – and I would fascinated to see the figures, especially in terms of users who do not have any items. Personally I use Flattr more to give than receive, and it is nice to think others do the same.

I am still not sure Flattr replaces donate buttons though – I will eventually raise my monthly payment, but only if there are more sites I am flattr-ing (so the “per click” value is similar). I see it as a strong ‘like’ – I ‘like’ raspberry yoghurt (in a Facebook sense), but I would not give it any money.

I am looking forward to you proving me wrong!

Thilo
Reply

You have a very good point about flattr depending on the vast majority of users being content consumers, and being happy with their donor role, and the assessment that many people may not have realized that they are in this role (even though they signed up with the intention to generate income for their blogs) and become potentially quite disillusioned/angry after a few months.

I’d really wish their was more of a campaign going on to promote the “feeling good about donating money to great content part”. Most of what we read is about the income that some people get from flattr, very often also tallied against the “expense” of the monthly fee, even though these two should really be regarded as independent of each-other. If you feel that the monthly donation is being forced on you (in order to get income, which you later find out does not cover the “expense”), then flattr will frustrate you.

If you can read German, I am making the same argument here: http://kulturflattrate.squarespace.com/journal/2010/6/4/flattern-ist-seliger-denn-nehmen.html

(Also, if you can read German, the situation of “only a precious few sites” having adopted flattr so far is much better, it has taken off quite a bit in the German blogosphere).

daylightgambler
Reply

Hi Thilo,

Thanks for your comment – it is interesting what Eileen says about the early indications of users who give without putting any of their own items on Flattr. As we both agree, these are the users that will make Flattr work long term.

I did try having a read of your post, but sadly neither Google Translate or my school German were up to the job!

Since I wrote my post, Flattr has been featured on Tech Crunch – http://eu.techcrunch.com/2010/07/06/is-flattr-the-new-facebook-like-but-this-time-with-real-money/ (thanks @jamiei for the link).

Thilo
Reply

Actually, we may have been too pessimistic about most people’s willingness to donate via Flattr: Peter Sunde, the founder, recently mentioned in an interview that 60% of all active accounts (i.e. accounts with money in them) do not have a single Thing attached to them, which makes them pure donor accounts.

http://www.netzpolitik.org/2010/npp095-peter-sunde-uber-flattr/
(The article is in German, but the MP3 is in English)

daylightgambler
Reply

Eileen from Flattr hinted that was the case, but it is very interesting to see such a large percentage giving without expecting to receive.

Of course the statistic hides how many of those accounts were setup with funds added but are not used to Flattr anything!

There are still not many things I have come across to Flattr (so at the moment your comments are getting the bulk of my Flattrs!) that I have come across, but not ready to give up on it yet!

Anphicle
Reply

I agree with you that it only works if everybody uses it but it is spreading. WIkileaks joined ship yesterday and instantly got the most Flattrs ever. When more sites with large user bases join up especially with the new api stuff then it will fly. Currently it is smaller blogs and independent people using it. I wrote a new post on it read it! July on Flattr

Cheers.
Anphicle recently posted..Flattr- The Money &amp Me- JulyMy Profile

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