Pirate Bay founder aims to make a Flattr world by Tim Bradshaw
Can flattery really get you everywhere? Even if you’re a notorious pirate? Until last year, Peter Sunde was the scourge of record labels and film studios as one of the founders of the Pirate Bay, the “unauthorised” music and movie downloading site. Now he’s hoping to change the economics of content again with a new venture, Flattr.
Having become famous for facilitating free downloads, Mr Sunde wants to make the web pay with his combination of tip jar, micropayment scheme and Facebook’s Like button.
Mr Sunde says this isn’t as inconsistent with online piracy as it might at first appear.
“Yes, Flattr is a payment system, but it’s more a sharing system,” he says. The Pirate Bay allowed people to share files; Flattr shares out small amounts of money. “The Pirate Bay was never for making people not pay, it was for making people free to choose what to share and who they want to share it with.”
Based in Malmö, Sweden, Mr Sunde and his co-founder, Linus Olsson, want to turn the way people pay for things online on its head - or, at least, backwards.
Flattr’s Digg-style buttons can be installed on any site with minimal technical know-how. People signed up to the service are able to click them to reward the content they have enjoyed - after they’ve enjoyed it, at a price they’ve chosen.
Its 20,000-plus members are each asked to put a minimum of €2 into their account every month. That cash is then divided up every month between the bloggers, musicians, photographers or any other content creators whose Flattr button they click. An average Flattr tips the author 15c.
Some early users of Flattr buttons have already seen decent returns since February’s launch.
It’s particularly popular in Germany: Taz.de, a newspaper site, says it received €988.50 in June, and Netzpolitik.org, which promotes “digital freedoms”, earned €576.53 (25c per click) last month.
At the smaller end of the scale, one photographer, who gives away his photos for non-commercial use online, said he received €33 from 90 clicks on his two Flattr buttons. A group of American sewing bloggers are also, unexpectedly, early adopters.
Flattr itself takes a 10 per cent commission, which it says will fall as usage grows. But even so, the prepayment model allows Flattr to reduce payment processing fees, which remain a barrier to micropayment systems.
“It’s not actually micropayments, it’s nano-payments,” says Mr Sunde.
A Finnish vegan and liberal who is “very political”, he admits his motivation is as much ideological as commercial. “It’s about removing the barriers between producers and consumers. I want to get rid of that mindset so that people realise in order to create, you have to participate.”
Mr Sunde has managed to convince investors that the idea is sound, both ideologically and financially. Flattr has angel backing from Stefan Glaenzer, Last.fm’s first investor and chairman, and Eileen Burbidge, formerly of Skype. The pair run White Bear Yard, a hub for tech-startups in central London.
“When we invested, it was in Linus and Peter,” says Ms Burbidge, who says she’s unconcerned by Mr Sunde’s conviction in the Swedish courts in the Pirate Bay case (he says the appeal process will take so long he is unlikely ever to have to serve his jail sentence).
“Current micropayment methods are completely inefficient - there has to be a better way. [Flattr] is pushing the envelope from a cultural, economic and business-model perspective.”
Several commenters to this TechCrunch post question why anybody would want to pay for something that they can get for free.
But the Flattr team, ever-counterintuitive, insist the opposite is true: that there is untapped demand from people wanting to pay for things online, but who are unable to do so because the mechanism isn’t there.
“People understand the power of money,” says Mr Olsson. “If I give you money, you will be able to keep doing things that I like you doing.”
Generous people such as these have been encouraging bloggers to install Flattr buttons, often via Twitter. A developer ecosystem is already emerging, for instance producing a StumbleUpon-style Firefox add-on.
That could help Flattr get around the chicken-and-egg problem that has befallen many micropayment systems before them: not enough people pay with the new currency because not enough people accept it - because not enough people are paying with it.
Mr Sunde says he doesn’t want Flattr become too popular yet, keeping it invite-only to allow for manageable growth.
But even if his Pirate Bay experience doesn’t provide many obvious lessons in making money, it has at least prepared him for running hugely popular sites.
“These guys were in the team that was involved in carrying 48 per cent of the world’s internet traffic,” says Ms Burbidge. “They know how to scale.”
Having become famous for facilitating free downloads, Mr Sunde wants to make the web pay with his combination of tip jar, micropayment scheme and Facebook’s Like button.
Mr Sunde says this isn’t as inconsistent with online piracy as it might at first appear.
“Yes, Flattr is a payment system, but it’s more a sharing system,” he says. The Pirate Bay allowed people to share files; Flattr shares out small amounts of money. “The Pirate Bay was never for making people not pay, it was for making people free to choose what to share and who they want to share it with.”
Based in Malmö, Sweden, Mr Sunde and his co-founder, Linus Olsson, want to turn the way people pay for things online on its head - or, at least, backwards.
Flattr’s Digg-style buttons can be installed on any site with minimal technical know-how. People signed up to the service are able to click them to reward the content they have enjoyed - after they’ve enjoyed it, at a price they’ve chosen.
Its 20,000-plus members are each asked to put a minimum of €2 into their account every month. That cash is then divided up every month between the bloggers, musicians, photographers or any other content creators whose Flattr button they click. An average Flattr tips the author 15c.
Some early users of Flattr buttons have already seen decent returns since February’s launch.
It’s particularly popular in Germany: Taz.de, a newspaper site, says it received €988.50 in June, and Netzpolitik.org, which promotes “digital freedoms”, earned €576.53 (25c per click) last month.
At the smaller end of the scale, one photographer, who gives away his photos for non-commercial use online, said he received €33 from 90 clicks on his two Flattr buttons. A group of American sewing bloggers are also, unexpectedly, early adopters.
Flattr itself takes a 10 per cent commission, which it says will fall as usage grows. But even so, the prepayment model allows Flattr to reduce payment processing fees, which remain a barrier to micropayment systems.
“It’s not actually micropayments, it’s nano-payments,” says Mr Sunde.
A Finnish vegan and liberal who is “very political”, he admits his motivation is as much ideological as commercial. “It’s about removing the barriers between producers and consumers. I want to get rid of that mindset so that people realise in order to create, you have to participate.”
Mr Sunde has managed to convince investors that the idea is sound, both ideologically and financially. Flattr has angel backing from Stefan Glaenzer, Last.fm’s first investor and chairman, and Eileen Burbidge, formerly of Skype. The pair run White Bear Yard, a hub for tech-startups in central London.
“When we invested, it was in Linus and Peter,” says Ms Burbidge, who says she’s unconcerned by Mr Sunde’s conviction in the Swedish courts in the Pirate Bay case (he says the appeal process will take so long he is unlikely ever to have to serve his jail sentence).
“Current micropayment methods are completely inefficient - there has to be a better way. [Flattr] is pushing the envelope from a cultural, economic and business-model perspective.”
Several commenters to this TechCrunch post question why anybody would want to pay for something that they can get for free.
But the Flattr team, ever-counterintuitive, insist the opposite is true: that there is untapped demand from people wanting to pay for things online, but who are unable to do so because the mechanism isn’t there.
“People understand the power of money,” says Mr Olsson. “If I give you money, you will be able to keep doing things that I like you doing.”
Generous people such as these have been encouraging bloggers to install Flattr buttons, often via Twitter. A developer ecosystem is already emerging, for instance producing a StumbleUpon-style Firefox add-on.
That could help Flattr get around the chicken-and-egg problem that has befallen many micropayment systems before them: not enough people pay with the new currency because not enough people accept it - because not enough people are paying with it.
Mr Sunde says he doesn’t want Flattr become too popular yet, keeping it invite-only to allow for manageable growth.
But even if his Pirate Bay experience doesn’t provide many obvious lessons in making money, it has at least prepared him for running hugely popular sites.
“These guys were in the team that was involved in carrying 48 per cent of the world’s internet traffic,” says Ms Burbidge. “They know how to scale.”