What if every ‘like’ and ‘favorite’ came with money? Flattr makes it possible

A lot of people want Flattr — or something like it — to work. Monetizing online content is a continuing problem, and micropayments may provide a solution. Flattr is probably the best-known exponent of these virtual tips, or “microdonations” as it calls them, and a few content platforms such as DailyMotion have signed up to allow their users to make pocket-money off their videos.
However, “flattring” someone has until now remained a slightly clunky business, with the content platform needing to carry a Flattr button and with the user having to remember to click it in order to reward the creator. No longer – changes revealed on Monday make it possible to flattr someone simply by clicking the “like” or “favorite” button that’s already next to their content. At launch, 8 services are supported: Twitter, Instagram, SoundCloud, Github, Flickr, Vimeo, 500px and App.net.
That’s right: this makes it possible for you to earn money just by being an awesome tweeter.

Cashing in

Let’s remind ourselves of how Flattr works: users budget a certain amount of money that they want to donate or pay each month. Let’s say User X wants to spend $10 a month. Each time User X flattrs someone, that flattr gets added to a tally, and at the end of the month the money gets divided by that number. Flattr itself takes a 10 percent cut, so, if User X flattrs people 100 times in the month, each recipient then gets 9c.
According to Flattr co-founder Linus Olsson, there have been around 1.5 million flattrs performed since the service launched three years ago. Ignoring the fact that some pay a lot and others very little, the average monthly spend per user is around €4.50 ($5.80) and the average flattr is around €0.50. From this, we can deduce that, on average, users flattr around 9 times each month – this is really not much, and it highlights the need for Flattr to make the changes it announced today.
As Olsson explained to me, it was one thing to have a button that blog proprietors could integrate into their own self-hosted site, but it’s quite another thing to handle the content spewed out on platforms such as Twitter:

“The main way of flattring before has been the button, but the problem with the button is with most content sites today it’s impossible to integrate the button. So we have been thinking how to make it simpler to flattr and possible to flattr in places where the button cannot be added.
“The logical way was to use existing like and favorite buttons, which one can argue are empty right now. Now you can make those functions worth something. We see it as giving them the value they should have.”

This integration has not involved partnering up with Twitter and the others; instead, Flattr is simply using their APIs. “That’s one reason we didn’t do this when we started three years ago — it wasn’t possible,” Olsson pointed out.

More widespread, but more subtle

The use of APIs comes with several benefits for Flattr. For a start, it gets the startup around the problem presented to it by Apple(s aapl) last year. Apple rejected a podcasting app called Instacast on the basis that it included Flattr payment functionality – this apparently broke the App Store T&Cs, because it didn’t give Apple a way to claim its 30 percent cut of all in-app payments.
Now, because Flattr’s method of tapping into the core service’s APIs obviates the need for a telltale Flattr button, Apple would have no way of knowing whether the use of an app that’s plugged into Instagram or Twitter, for example, might result in someone making money without Cupertino taking a slice.
The other problem partially solved by the API approach is that of unclaimed flattrs. A Twitter user, for instance, doesn’t have to sign up to Flattr in order to have people flattr their tweets – they do, however, have to create a Flattr account in order to get the cash. So, when they create that Flattr account, authorizing Flattr on their Twitter account will tell the system that, yes, they are the person whom User X meant to credit.
That said, there is an outstanding problem: right now Flattr has no way of automatically informing people that someone out there is trying to give them money; it’s up to the user to tell their intended recipient to sign up and claim their payment (the payment only leaves the user’s account once it is claimed).

Will it work?

As I stated above, there is a lot of goodwill behind the micropayments concept, but also a number of failed attempts to make the concept work in reality.
If you view this as a chicken-and-egg dilemma, then Flattr is very much doing the right thing. After all, you’re less likely to get into being a Flattr user if the person you want to give money to hasn’t made it super-easy to take Flattr payments. Conversely, if there aren’t scores of people using the service, there is little impetus for content platforms to incorporate the Flattr button.
In theory, quietly plugging into platforms such as Twitter and Instagram makes it a heck of a lot easier for the service to gain scale. However, it raises another issue: visibility. If there’s no Flattr button, how is the company going to educate users about the scheme? How will they know that this system is in place, allowing them to reward their favorite content producers?
Olsson reckons the imminent introduction of automated notifications for content creators will help the service spread: “First people get unclaimed flattrs, get a message about them, collect them [then] flattr others.” I’m not so sure. It’s true that the services we’re talking about didn’t sport Flattr buttons in the first place, but I can’t help but feel that some extra marketing element would be needed in order to really educate potential users about the service.