FREE IS NOT FAIR! – Micropayments changing the game – Introducing Znak it!

When something good is up for grabs for free, somebody always loses.

Conventional wisdom holds that quality is valuable and money should follow value. This should be a sustainable business model where everybody benefits.

But if we look at what’s happening in the online world it seems like this wisdom is turned upside down: money does not follow value, at least not directly. What’s being propagated is that value comes from quantity and that quality ranks second – at best –, or that it doesn’t matter at all. Quality content creators are pushed to succumbing to the demands of Quantity. Quality and garbage get thrown into the same hat and it becomes very difficult to separate the two, essentially devaluing quality in the process.

This in turn justifies the free model that is sustained by advertising. Advertisers pay for quantity while they are dreaming about laser sharp targets within well identified segments. „It’s a known fact in advertising circles that only idiots click on ads — and yet advertisers still think that click-through rates mean something” Felix Salmon, Wired.

Money is being made but neither the advertisers nor the readers get exactly what they want!

So the vision is simple: pay for value and get the garbage for free; this is the right thing. The internet enables volume which makes it possible that you don’t have to pay a lot for value while payment does not exclude advertisers either. Win-win.

Maybe this is why paid content is such a hot topic nowadays. Gigaom for example has raised just $6M to implement a paywall system

So we looked around here in the CEE to see who are brave enough to stand up and do the right thing against the fanatism of FREE…

That’s how we found Znak it! It’s a small startup founded in 2008 and financed by the founder Greg Golebiewski, a serial entrepreneur from the Silicon Valley, and through EU funds. They have around 10 people working in Poland and Portugal doing development plus some more doing business development in London and in Sunnyvale, California.

Znak it! is a pretty complex SAAS based micro payment platform that brings users, content providers and advertisers together taking care of the technical infrastructure, the pre-paid virtual credit system, curation as well as the business model that also engages advertisers in the ecosystem. Their focus is on payments in the 5c – $2 range. Unlike Farmville cash for example, Znak it! is platform agnostic: is works everywhere.

I spoke with Greg on skype the other day who explained that they are focusing on quality content, like statistical and financial data from reputable sources, popular bloggers and publications.

They are already running projects with content providers in Latin America, Israel and Germany. The range of content currently covered varies from text, video and games.

The video play is something like youtube but it’s not user generated content. The games play from Germany shows how to monetize games without subscriptions through a community of users. There is tons of potential also in fields like education, including “how to” sites for example.

To sum it all up I asked Greg to explain how he would pitch Znak it! to Glam Media, one of the biggest success stories in online publishing.

„Glam Media allows high quality blogs capture advertising from the world’s top brands. And this is great!

However, ads are only one way of monetizing digital content. As the New york Times, the Economist or GigaOM have proven, direct user payments can be substantial additional sources of digital revenue, via paid subscriptions, or better yet, through small on-demand payments. The Znak it! premium content curation and payment platforms delivers such solutions. We facilitate payments as small as $0.5 per access to a single high-quality article or a gallery of pictures, video and audio files, etc. without putting everything behind a paywall and losing ad revenues.

In addition to that we can effectively help the huge pool of niche/specialty blogs and online publications generating less than 100,000 uniques a month, earn money.

By adding our Znak it! platform to the Glam Media line of products, Glam Media could extend its already huge reach to tens of thousandths of new publishers and millions of new users, while giving them more options, more engagement and more satisfaction from their online experience.”

Znak it!

Founded: 2008
Funds: angel, EU ($200K)
Founder: Greg Golebiewski
Locations: Portugal, Poland