As we all know, there is no such thing as a free lunch and for most content-based websites the meagre crumbs of advertising revenue have long since ceased to be enough to sustain them. And working out a satisfactory way to allow people to pay for things online has long been the Holy Grail for online content providers. The problem being that up to now there has been no equivalent of Visa or Switch in the micro-payment market, nothing that potential customers trust enough to part with their cash.
Combine that with a high level of uncertainty over just what people will pay for, be it video clips, exclusive news, research facilities or music, and the longed-for swing towards a paying culture among web users still seems a way off. While mobile operators such as Vodafone and independent companies such as Paybox are developing some interesting mobile-based models, they will take time to implement and gain the trust of users. And other options, such as dialling a premium rate phone line or buying a voucher to obtain a code, have proved unwieldy and simply too much trouble for site owner and customer alike. For sites in urgent need of revenues now, a satisfactory model looks a remote prospect.
Which is where BT comes in. In keeping with its new image as a thrusting, modernising company rather than the dawdling behemoth of old, it is hoping all that will change with the launch of BT Click & Buy in September this year. Something of a departure for the company, it is part of a concerted push to put BT at the heart of online behaviour in general, and high speed broadband access in particular. The idea being that the combination of the trusted BT brand name and a simple, user-friendly system will make it immeasurably easier for sites to charge between 50p and £5 for chunks of content, be they articles, video clips or audio tracks.
The fact that the technology, bought from German company Firstgate Internet, will be implemented and promoted on a widespread basis for the first time is likely to kick-start interest in launching paid-for content sites. In Germany, where it launched last year, more than 2,000 businesses and content suppliers have already signed up to the scheme and it has more than 500,000 registered users.
When it launches in the autumn, the system will allow web users to set up a central account. Then, when users see the BT Click & Buy symbol on a relevant site, they simply give their password and have the money charged to their account. It is up to the site in question how much to charge and how long to allow users to access content for - it could be an hour for a one-off live event or a week for an exclusive article. The account can then be paid off monthly by debit or credit card and from next year, BT also plans to offer the option to charge payments to a BT bill.
Consultancy Edengene, which advised BT on the launch of the service and pinpointed Firstgate's technology as the best available, believes there is a clear gap in the market. "There has been a lot of focus on payment for physical goods but not much on payment for content. There is a gap in the market for a trusted brand able to give consumers what they want," believes Tim Thorne, vice president of ventures at Edengene.
Content partners, quite reasonably, don't want to spend time and money integrating with unproven payment systems. According to Thorne, a priority when looking for a system was that it could be integrated in hours rather than days. "It must be really fast and intuitive," he adds. "That's where SMS-based services fall down. I don't want to be looking at a site, then have to fiddle with my mobile phone and then get a code back that I enter into the site before being able to view the content."
But the key factor that makes BT think it can succeed where others have so far failed is its own brand name. As Thorne points out, "The one thing people trust BT about is the fact that they can collect money." Users will also be able to manage their account from a central BT site and check up at any time how much they've spent and where. Neither will they have to keep logging in and out of the system - if they want to, they can just log in at the beginning of the day and hit the BT Click & Buy symbol every time they wish to purchase something. Like a credit card company, BT will make its money by taking a tiny cut of each transaction.
But there are still large question marks over whether users will actually pay for consumer content. It's all very well for the FT to charge a subscription to business users for certain parts of its site, but the real acid test - whether home users will pay up to access content - is still to come. "What you actually charge for is very important," believes Thorn. "It has to be premium content, it's no good suddenly making every page on your website chargeable. People will pay for premium content, they won't pay for something that is already free,"
According to Ian Price, chief executive of the BT Micropayments subsidiary, one of the services being trialled by women's site Handbag.com is a monthly horoscope service. The site's commercial director, Pippa Kershaw, acknowledges that getting users to pay for premium content is a priority. "We are always looking for ways to monetise our content, we know from experience with premium rate phone lines that our users are prepared to pay for our horoscopes. We believe this is our opportunity to successfully take small payments online," she says.
The system also allows for dynamic pricing so a newspaper could, for example, charge people to look at the full version of a breaking story before making it free the next day when the paper comes out. Or a sports site could provide free score updates, but charge people to look at video highlights when the event is over. An impressive list of content partners have already signed up for the trial phase.
"We've got some big brands, we've got games and music which are going to be some of the early drivers and we've also got a couple of very small dotcoms that have been waiting for something like this," explains Price. Among them are publishers such as Emap and IFG, James Brown's magazine company that owns Jack, Viz and Bizarre; music sites such as Playlouder; and sports sites such as Rivals.net, Sportinglife and Sportev, which has the exclusive online rights to rugby union highlights.
Ben Warn, commercial director of Sportinglife.com, believes that "Sports fans and punters are already comfortable using premium line tipping, commentary services and their mobiles to receive SMS updates. This is a natural extension to our business."
"I'm very excited about some of the content that these partner sites are talking about. A lot of them will be looking at streamed content," says Price. Which is also good news for BT, because if it is to deliver on its mission of supplying 5m homes with broadband internet access by 2006, then plenty of video content is likely to be key. And the only way to make money from video content is to charge for it. "It's a virtuous circle," believes Thorne. "This is something that can achieve the critical mass necessary to kick start the market."
