You might not have been following the current drama surrounding the micropayments startup Kachingle, so I’ll explain:
Kachingle is one of a couple of micropayment programs that’s sprung up in the last few years (flattr being the other one I know of that’s been moderately successful) built around the idea of users paying one flat fee per month and then splitting that among any number of sites that they desire to give an ‘attaboy!’ to each month. In theory, if you pay $5 into the service, and then give five different sites the nod that month, each one gets a dollar, less service fees the company charges. Give fifty sites a piece of your attention, and each one gets ten cents. And so on.
The thinking here is to avoid the problem that micropayments ran into back at the turn of the century, when people like Scott McCloud were theorizing how they could transform webcomics — people don’t like to think about paying in tiny increments, and the transactional hurdles of collecting lots of small payments ate up any potential profit. Merchandise and banner ads became the de facto method of making money on the internet with creative content. (Of course, the t-shirt economy has its own set of limitations.)
Uptake of these systems has been somewhat less than enthusiastic, to put it mildly. Creators are wary of the theoretically fickle distribution of money (what if all of your fans like a lot of things? That means you get very little money) and the generalized weirdness of telling people who want to give you money that they have to go though a third party instead of just taking it directly from them.
A while back, Kachingle decided that, instead of waiting around for those (silly, shortsighted) content creators to get on board with the (glorious, futuristic) plan, they’d just automatically enroll the entire internet into the system, and sort out the details later. They launched a browser plugin that allowed users of Kachingle to ‘give money’ to any site on the internet and said they’d do their level best to contact anyone who users tagged and let them know they had a check to write them.
That was about a year ago. At the same time, the New York Times was beginning to roll out plans for their paywall for articles, and Kachingle smelled a marketing opportunity. They began to publicly campaign against the paywall, and tout their system of tip-jarring individual article writers as the future of journalism. The New York Times, it turns out, was less than amused, slapping Kachingle with a flurry of cease-and-desist notices, claiming Kachingle was attempting to make money off of the New York Times’ good name. I’m not sure how that ended up, but seeing as you can’t find any mention of the New York Times on the Kachingle public leaderboard, I don’t think it went in Kachingle’s favor. (Check out how low those numbers are. Kachingle has basically no users outside of its own employees.)
Last week, as part of an attempt to drum up business, the Kachingle twitter feed began calling for its followers to list webcomic sites in its database, so that users could, ah, ‘kachingle’ them. (Yes, they use it like a verb. The semi-broken English on the feed leads me to believe that the company has someone who speaks German running the account.)
Webcomic creators reacted with horror. Many immediately contacted the company to have their webcomics blacklisted from Kachingle’s database, with others publicly denouncing the company on twitter. There are now no webcomics listed in Kachingle’s database.
To understand why Kachingle just struck out with the very people it needed to win over, imagine this scenario:
You play guitar on the street corner. You play guitar well. People leave money in the guitar case in front of you, and sometimes they buy a clever shirt you also sell with a lyric from a song you wrote that people like. It’s a living. You have a direct relationship with the people who like what you do. You’re friends with the other guitar players in the city, and you all jostle for listeners.
Then, one day, a guy in a slick suit starts walking around, telling people that if they want to give money to you or any other guitar player in the city, all they have to do is give him money, and let him know who they want to support. “We are just the middleman,” the guy in the suit says. This is “free money. And don’t worry; even if we can’t track you down to give you your share of the money, we’ll donate it to our charity.”
“But, of course, we have to cover our own costs. So 15% of the money that people give us will go into our pocket.”
“But,” you say, shocked at this brazen nonsense, “I don’t want you to do this for me. I had a good model already set up! I got paid that way, and I got to work with my customers directly. I don’t want people thinking you represent me! Stop saying you do without my permission!”
Kachingle is making a profit by representing itself as an official way to give money to something a user likes. They exploit the well-intentioned desires of users to support something they generally get access to for free — in this case, websites — to wedge themselves in and skim money off the top of a relationship that didn’t need to have a middleman attached. By claiming that they’re working in the interests of “users who are unable or unwilling to donate directly to a site” Kachingle is attempting to solve a problem that doesn’t exist. Besides, Kachingle uses Paypal to transfer all the payments around. If a user can use PayPal for Kachingle, they can use it to interact directly with a content creator — it’s a polite lie.
Kachingle isn’t a big deal now, mostly because its userbase is so obviously small. But it’s still a ridiculous concept, and deserves to be ignored and shamed on principle.