Copyright © 2010 by Stuart J. Whitmore
This article was revised substantially on 1 May 2011. Some comments were posted before that revision.
Do you create original work and share it online?
Many people share their original content online without requiring payment or even a simple "thanks" from the many who may download their work. This includes tens of millions of photos on Flickr released under a Creative Commons license, hundreds of thousands of photos on morgueFile.com released under that site's very generous license, tens of thousands of original sounds on the freesound project, and countless other works.
Although this is done without requiring payment, a creator might still wonder if there is a way to get paid — not a specific price, but more along the lines of a tip jar. There have been a number of online services offering "tip jar" services. The normal term for this service is "micropayment." This article is designed to give an overview of one such service called Flattr. It was originally written from the perspective of someone who is new to Flattr but not new to the concept of micropayments. To keep the article current, it was revised after Flattr changed a fundamental aspect of their service.
How It Works, In General
Here's a basic description of how Flattr works…
You start with two jars for money (or buckets, or hats, or whatever container you want to envision), and both of them are empty at first. The first jar ("outbound") is for money you give to others, and the second jar ("inbound") is for money other people give you. (Flattr calls the outbound jar "Means" and the inbound jar "Revenue" — keep that in mind if you sign up!) Originally, you had to "give some to get some," but that requirement changed in May, 2011.
Once you put some money into your outbound jar, some of it will be taken out at the end of the month to pay for your "tips." You decide how much is taken out each month, although the minimum is €2. You tip a person's content by clicking the Flattr button for that content. No matter how many people you "tip" (or "Flattr"), only the amount you choose is taken from your outbound jar at the end of the month. That amount is divided among the people you tipped. Tip one person all month, and they'll get the full amount. Tip 50 people, and each one will get 1/50th of the amount.
Other people tipping you will fill your inbound jar. If you want to move money from your inbound jar to your outbound jar, you can. Otherwise, when your inbound jar reaches the minimum payout level, you can request withdrawal of the money you've received. As a Europe-based service, all funds are in Euros, so you'll have to deal with the exchange rate if your funding source isn't also in Euros.
Often it's easiest to understand something by considering an example, so here you go!
Assume (to avoid other issues) that you sign up for Flattr on the first day of the month. You then decide to deposit €5 into your outbound jar. However, you don't want to spend all of that money in the first month, so you leave your amount to pay out each month at the default of €2. During the month, you find that Mary has a great photo you can "Flattr" and Joe has a nice short story you can "Flattr" and Pat has two videos that you want to "Flattr." You click the Flattr button for each of those. At the end of the month, Mary receives 1/4, Joe receives 1/4, and Pat receives 2/4 of your €2 — so Pat receives €1 and the other two each receive half of the remaining Euro. (Technically, there is a 10% fee on incoming Flattr revenue, so Mary, Joe, and Pat will receive a bit less than what was described in this example.)
However, you're not just interested in giving tips, you want to receive them too. So, you submit one of your original works to Flattr. It becomes wildly popular and many people "Flattr" you. The amount you actually receive will depend on how much those people had set as their monthly-payout amount and how many other people they chose to "Flattr" that month. You might get many tiny pieces of many tiny pies, adding up to, well, not much. Or you might get many large pieces of many large pies, adding up nicely. It all depends! If it's only a small amount, you might just move that money over to your outbound jar, so you can Flattr others longer before adding new money. If it's a larger amount, you might decide to pull all of it out, or maybe pull some out and move the rest to your outbound jar.
Will It Work?
As with any micropayment system, Flattr needs to become popular enough to make it worthwhile. "Critical mass" is important for many online systems (auctions, classifieds, and so on). If there aren't enough people using it, people will be hesitant to join. Some of the key obstacles for micropayment systems are simplicity, processing fee minimization, and reaching that critical mass. When this article was first written, Flattr seemed possibly viable, but certainly not a slam-dunk win. Does the above description sound simple? Probably not, although the process of "flattring" somebody is very easy. Are fees minimized? Possibly not: As of May 2011, depositing €5 via PayPal delivers only €4.48 to the outbound jar ("Means"), and there is the 10% fee on incoming revenue. There is talk of the fees being reduced "eventually" but high fees can reduce participation. And has Flattr already reached a critical mass of users? This is difficult to determine; the reach of the service is certainly different than what it was when this article was originally written. However, the big change in Flattr to not require that you "give some to get some" removed what was probably a serious obstacle for reaching critical mass. We will have to wait and see what the ultimate result will be from that change.
Your Next Step…
What you do after learning about Flattr depends on your interests. If you're a creator of original content and you'd like to enable a "tip jar" for your work, there doesn't seem to be any major reason to not sign up. The worst case scenario might just be that it doesn't work out for you and you might miss out on donations through a different service that would have worked better for you.
If you would like to be able to support people, sites, or projects that you value, you might want to go ahead and sign up and put in a small amount of money so you can learn first-hand how it works. As the number of eligible Flattr recipients is rising, there's a good chance that sites or projects you're familiar with will be eligible to receive your support through Flattr.
Or, you may want to sit back and watch to see how things develop, or go looking for additional reviews before deciding to join or not. If you do join (or have recently joined), you are — of course! — welcome to experiment with the service by clicking the Flattr button on this page!