Flattr’s Peter Sunde seeks to end online media’s dependence on advertising

Whether it’s ads or ad blockers, publishers continue to struggle with monetising online. Tech.eu spoke with Flattr Plus (and The Pirate Bay) co-founder Peter Sunde at TNW Europe to find out about their proposed solution.

Online publishers are in a constant tussle with the ever-changing face of the web, particularly when it comes to monetising content and reliance on advertising.

Peter Sunde, a co-founder of The Pirate Bay, is now one of the co-founders of Sweden-based Flattr, a service that allows web users to donate money to content creators online.

The next step in Sunde’s plan to help publishers and creatives monetise online content and be free of advertising is Flattr Plus, a partnership between Flattr and one of online media’s biggest foes, AdBlock Plus.

The original Flattr model gave users a wallet-like system that they could fill with whatever amount of money their budgets allow for. If you land on an article or video or any kind of content you like, a click will send a small bit of money the creator’s way (provided they’ve signed up with Flattr).

Flattr Plus, which is still in beta ahead of a full launch later this year, now attempts to automate that process.

It’s a browser extension with an algorithm that claims to track how engaged you are with the content on screen, such as how long you spend on the page or if you’re scrolling up and down and to the end.

However the system could be somewhat flawed too – what if you leave a tab open or click on an article that appeared interesting but didn’t deliver (aka the dreaded clickbait)? “There’s a lot of margins for errors, that’s why we’re going for the beta phase and then we’re trying to fix all of this,” said Sunde, speaking with Tech.eu at The Next Web Europe conference in Amsterdam last week.

Ahead of its public launch in late 2016, the partnership with AdBlock Plus, which has made an undisclosed investment in the startup, gives Flattr Plus access to a potentially huge user base – AdBlock Plus recently passed 100 million active users. The next step is convincing publishers that they should sign up with Flattr Plus.

According to Sunde, a publisher doesn’t need to really do anything beyond registering and providing bank details, where Flattr will deposit the money generated from engagement in their content. The startup takes a 10% cut.

Sustaining online media without the dependence on advertising is at the heart of Flattr Plus’ agenda, explained Sunde.

As traditional media outlets contend with plummeting print sales, and closures, and new media struggles to find sustainable revenue streams, Sunde believes Flattr’s business model offers one possible solution but not a permanent fix either.

“There’s just an additional layer with additional funding,” he said on the revenue generated from “flattrs”, the money earned by creators via the extension. “For me that’s always been important that we don’t try to cannibalise things, there’s not one solution for everything. I think the only solution is to have a lot of solutions.”

Sunde, being a co-founder of The Pirate Bay, knows a thing or two about courting controversy. At the same time, Flattr’s newest business partner AdBlock Plus has not been a friend of the media industry either. Eyeo, the company behind AdBlock Plus, has faced legal action over its browser extension that hides away ads from the browsing experience. Most recently, it came out on top in a court battle against German daily Süddeutsche Zeitung.

How does Flattr hope to continue to build ties with publishers when it’s in business with a company that’s been butting heads with the media for years?

“My view of journalism is that it needs to be independent but it’s not independent when someone is paying the bills for you,” said Sunde.

“I think we all have an interest in finding a more sustainable way and I think that media has been seeing this company [AdBlock Plus] has been fucking everything up for us but as a user I think most journalists probably understand how fucking annoying ads are.”

“Flattr Plus has nothing really to do with ad blocking,” he added, reiterating the point that it doesn’t cost anything to try. “I don’t think there’s harm in testing that.”

Flattr isn’t providing any hard figures yet and its original extension does not distinguish between users that contribute money and those that receive money.

Laura Sophie Dornheim, public affairs manager at Eyeo, told Tech.eu that the main Flattr service so far has seen about 30,000 unique users receive payments through the extension, including national newspapers in Germany down to small independent artists.

However, another hurdle is the cultural shift necessary to get people to pay for content online after years of being conditioned to think most things are free.

“Why do people pay for Spotify or something else?” countered Sunde. “Why would people pay? It’s never been the issue, we have a lot of people that just want to pay so we didn’t even work on the pitch for users. All of these people want to give money but it’s hard to make someone receive the money. That was our issue.”

Sunde, Flattr, and AdBlock Plus appear to be pretty confident that they have found at least one of the many solutions needed to revolutionise how online content is consumed, supported and paid for. They expect to generate $500 million for publishers by 2017.

“I’ve been really hated by the media industry, [AdBlock Plus] are really hated by the media industry. We are the good guys trying to cooperate now to find this [solution],” he said.

“They have this massive user base that we need to get to a sustainable level because it is about volume and we have something which is good for them as well to reach the end goal of finding something better than advertisements and funding that works.”

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This post originally appeared on Tech.eu.