Flattr, Social Media's Online Tip Jar Might Save Its Pirate

The 32-year old Swedish entrepreneur Peter Sunde, while suffering the slings and arrows of a business model condemned by the courts has created yet another social media site that actually pays starving bloggers for their content. Found guilty of online music piracy and copyright infringement and about to face a jail sentence and millions in damages, The Pirate Bay co-founder is also the master-mind behind Flattr, an altruistic site that monetizes content via the kindness of readers.

Peter SundePeter SundeIn my post, back in July, titled, "Flattr, Social Media That Comes With A Pricetag," Sunde's latest venture has a somewhat "Robin Hood" feel to it. Having stolen money (according to the courts) from the music industry, he appears to have robbed from Peter to pay Paul. In selling The Pirate Bay to Global Gaming for £4.7 million, Sunde was able to invest in his new enterprise Flattr.

In addition, investors have lined up to assist him in funding his new project without hesitation. To date, Sunde has been able to line up venture capitalist backing from Last.fm and Eileen Burbridge, formerly of Skype.

Similar to Napster before the Web site went legit, The Pirate Bay business model was based on enabling web users to access movies and music without filling the coffers of the entertainment industry. To continue with the Robin Hood analogy, Parmy Olson from Forbes Magazine categorized the two divergent Web sites as The Pirate Bay letting users "stick it to the Man - (while) Flattr lets you stick money in the little guy's wallet."

Flattr, based in Sweden and launched in August has already scaled to 50,000 users. Sunde's goal - barring the fact he may be in prison - has a target of a million by this time next year. Similar to Facebook's LIKE button, sites can embed a Flattr button on a content page. Readers can then become 'content payers,' and when and if they enjoy specific blogs, videos or Web sites, all they have to do is click the icon.

Similar to the paradigm of "paying forward," payers have to pre-fund a Flattr account monthly with a minimum of $3. Then, at month's end a payer's funds are divided among those they've flattered, and Flattr takes 10 percent of the money received by content creators.(TechDirt is one of Flattr's content producers.)

According to Olsen, some content publishers are more than content with their steady stream of income from Flattr. Tim Pritlove, who blogs and podcasts about technology from Berlin, Germany has been "tipped" approximately 1,000 euros per month from Sunde's operation.

Now, having been found guilty of copyright infringement for The Pirate Bay case, sentenced to 8 months in prison and collectively owing $6.5 million in fines with two other co-founders, Sunde might have to sell his latest brainchild to stay afloat. His other option is take more from the "tip jar" he has so nobly created.

However, with the majority of content still free on the Internet, Flattr might falter or fail outright even before it ever comes out of beta. And for both content publishers and bloggers it might be wise to monitor the progress of the early guinea pigs, like TechDirt to determine the success rate of the model over time.

With Sunde's appeal underway, the case is expected to go all the way to the Supreme Court. While appearing  relaxed in this YouTube video, Sunde stated that the trial "wasn't anymore than eating popcorn and watching a video."  Time will tell if that box of popcorn will cost this pirate 'an arm and a leg.'