What if you could buy an article like you buy a song on iTunes? Would it encourage you to pay for more of the media you consume?
That’s the central question CoinTent CEO Bradley Ross has created his micropayment business around. The startup wants to help publishers to make money on original and high-quality content by charging consumers a small fee to view an article. Rather than pushing readers into a year-long subscription, CoinTent would let users pay $0.50 for a video or post.
The company is emerging out of beta today and announcing a $1 million seed round raise.
Content prices are determined by the publisher, and CoinTent facilitates the micropayment transaction in exchange for a slice of revenues. For example, for publishers of a certain size charging $2.00 an article, CoinTent would take 20 percent of the sale.
Prior to launching CoinTent, Ross was a product manager at social game maker Zynga, the company responsible for Farmville.
“During my time in the game space, I saw the shift that happened to digital, social, and mobile,” he said. “The freemium model disrupted everything.”
It’s an obvious move to want to bring the paid-content model to publishers, so you have to wonder why no one else is doing it. At least one reason is because micropayments are traditionally not cost effective. Credit card companies charge big processing fees, making a $0.50 charge more trouble than it’s worth. But CoinTent sets users up with a digital wallet where they can load up cash to spend specifically on articles as they browse content. That way, the company is paying credit card fees on larger sums.
CoinTent is currently setting deals with publishers so that its wallet can become the default way readers buy articles and subscriptions around the web. However, there’s lots of room for competition from other digital wallets, should they choose to jump into the space. PayPal especially seems primed for this kind of utility. But, for digital wallets, micropayments are small stakes — there’s much more money to be made around e-commerce and mobile commerce. That may allow CoinTent to move in on a niche market.
Foundry Group, QueensBridge Venture Partners, Mark Pincus, Donna Dubinsky, Leonard Shustek, and Andrew Tisch contributed to CoinTent’s seed round.