AI has revived the micropayments dream

On this week’s People vs Algorithms, we’re discussing how the Tech Right is turning Anthropic’s safety messaging against it, what AI sovereignty means for companies and individuals, why Xbox has faltered, and the new publisher pivot to video. Follow PvA on podcast platforms and YouTube.

Speaking of YouTube, I am belatedly making my own semi-pivot to video. We wrapped up a series of video podcasts in Cannes. If you want to see my collection of linen shirts and interviews with leaders from Bloomberg Media, HSBC, People Inc, EX.CO, Spotify, Supertab, The Wall Street Journal, NBC Universal and more, check out TRB’s YouTube channel.

Today, Supertab’s Cosmin Ene on why AI will bring about a micropayments system. Plus: The promise and reality of agentic advertising.

This year at Cannes, we set up the TRB Studio in a side room at Zuma to record TRB Conversations, powered by EX.CO. We had a series of media leaders come through, with top executives from Spotify, USA Today Co, The Wall Street Journal, NBC Universal and more. You can see all the interviews on YouTube. Thanks to EX.CO for underwriting this series. Below are highlights of the second batch of conversations. See them all.

The future (not the present)  is agentic. Paul Jelinek, chief business officer at EX.CO, told me that while the programmatic ad ecosystem is agog over agents, that’s more the promise than the present reality. Small test cases are lauded, but agentic ad buying is still in its infancy. "You not only need to build these agents, but you need to figure out a go-to-market to get it into the hands of the people that matter." Watch

The agentic opportunity. Jon Roberts, chief innovation officer at People Inc and AI savant, gave me the optimistic take that agentic ad buying could greatly reduce the “ad tech tax’ publishers have long bemoaned by directly connecting buy and sell sides. “"The joy of agents is you don't need an intermediary,” Jon told me. Watch

The portal’s comeback. Rob Wilk, CRO of Yahoo, gave me the case for portals being relevant again as Yahoo hits 30. It comes down to having a deep trove of first-party data and 75% of users in a logged-in state. “We have a very complete picture of consumer behavior,” he said. Watch

Thanks to EX.CO for underwriting this series of conversation. See the full set. 

Supertab is a partner of The Rebooting. We work with companies that are building the technology infrastructure for the next generation of the media ecosystem. Learn more about Supertab’s economic infrastructure for AI. 

There’s a school of thought that the true original sin of the internet was not baking payments into the browser. Instead, the commercial web began in 1994 with a banner ad running on HotWired that asked, “"Have you ever clicked your mouse right here? You will.”

The internet became an ad-driven medium, which has been a mixed blessing. Direct payments for content were rare and usually tied up in recurring revenue subscriptions. Many micropayments schemes have been tried over the last 30 years and all have fizzled because the economics don’t work. Publishers need to squeeze more revenue out of a small group willing to pay. Recurring revenue is far more attractive than one-off payments.

The rise of AI could change that calculus. Already, over half the traffic on the internet is bots, according to Cloudflare. Moving from a platform era to an agentic era will mean the internet will likely bifurcate into one built for bots and another for humans. The bot version is an opportunity to start all over again. The sheer number of agents that are forecast to be roaming the web to retrieve information warrants micropayments getting a second look.

“Over the last 20 months, the world has changed more than the last 20 years,” said Cosmin Ene, CEO of Supertab, in a conversation we had in Cannes. “We went from building Lego structures to skyscrapers with AI. This has given birth to a new player in the web ecosystem, which is AI systems and agents. They consume crazy amounts of content and data at unprecedented scale and speed, but they don’t watch ads. If that continues, the web as we know it will die.”

That’s where micropayments enter the picture. The licensing deals big publishers are striking with AI companies are not scalable. And Big Tech focuses only on the scalable. Cosmin believes the only workable solution is to lay the groundwork for AI agents to make small payments for access to content. The all-you-can-eat nature of traditional subscriptions is a bad fit for millions of task-oriented agents. “They expect very simple, fast transactions,” Cosmin said of the bot mindset.

Supertab’s solution: focus on grounding, not training. Much of the fights to date have been over spilled milk of Ai companies using publisher content to train their models and then compete with them. But the bigger opportunity is to extract tolls on grounding, the AI term of art for when a model looks for fresh information. 

Supertab is working to create the infrastructure that allows publishers to communicate their usage rules to agents, set a price for access, and then aggregate and settle small transactions that are often less than a cent. The last part is important: Many micropayments schemes falter because the transaction costs of processing so many small payments are untenable.

"If you offer your price for your content at a price that's too high, bots, agents, AI systems are not going to buy it,” said Cosmin. “You're going to get first-hand feedback. Over time, when you lower the price and you find the right middle together, you're going to see consumption go up."

This concept is gaining steam. Cloudflare this week announced its version of a bot/agent paywall that allows publishers to charge AI models for scraping content. The Cloudflare Monetization Gateway uses stablecoins to minimize the transaction costs for the micropayments.

The underlying bet of these schemes is that a two-sided information marketplace can develop between the AI demand side and the publisher supply side, creating the right economic incentives for people to continue to create quality, reliable content. I’ve long held that it’s difficult to imagine people hitting the back button on an article page while AI is curing cancer. 

Of course, the issue comes down to whether the demand side will show up willing to transact. Jon Roberts, chief innovation officer at People Inc and my go-to source for how this will play out, has long told me that AI companies will need fresh information as much as they need compute and researcher talent. To date, however, they’ve found ways around adding an information line item to balance sheets already bleeding red. Jon pointed out to me in one of our TRB Conversations, powered by EX.CO, that unauthorized scraping by companies with “multibillion dollar valuations” proves there is demand.

"There is a market emerging and customers running agents are paying,” he said. “I like exponential uncapped growth markets. That's a fun world to be in."

I’ve detected more optimism in my discussions with publishers over how to manage this transition to an agentic era. Much remains to be worked out, and the power asymmetry remains as evidenced by the boiling over of discontent with Google. Still, there are emerging frameworks for a new economic model for information.

“I expect this to be like a third monetization model for the AI web,” said Ene. “We have precedents out there for a meaningful big revenue model, and I think AI is preparing for their YouTube moment. And publishers need to be ready."

Watch my conversation with Cosmin on YouTube or listen to the podcast.

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