The concept of micropayments for news is gaining appeal, as publishers face a new threat to their ad revenue with the rise of ad blocking.
Today, the concept will get a big endorsement when startup Blendle launches in beta in the U.S. with big-name publishers including The New York Times (which is also a backer), The Wall Street Journal, Time Inc. and The Washington Post.
Founded a year ago in the Netherlands, Blendle has a foothold there and in Germany, where it claims more than 650,000 users and publishers including Der Spiegel and Die Zeit are on board.
In the U.S., the Times, Journal, Barron’s and Time Inc. are among those testing small payments (19 to 39 cents for newspaper articles and 9 to 49 cents for magazine articles, on average, according to Blendle) for their publications on Blendle’s platform.
The Journal is expanding its relationship with Blendle after experimenting with it in the Netherlands and Germany, where the platform has strong appeal with young readers, said Katie Vanneck-Smith, chief customer officer and global managing director at parent Dow Jones. “They bring a very strong under 35-demo into the paid for audience for news. It tells me that they will [pay for content].”
The ability to reach younger readers also held appeal for Time Inc., said Scott McAllister, svp of digital marketing and revenue at Time Inc., which will test the digital replica of its flagship Time magazine on Blendle on a per-article basis, mostly for under $1. “I was happy to hear it was a young demo paying for content,” he said.
But micropayments face the same challenges they always have. It’s hard to get consumers to pay for content when there’s so much that’s readily available for free. The fundamental problem with the model is that people don’t like to be “nickle-and-dimed,” Clay Shirky wrote in a 2009 essay.
Blendle is noted for its user-friendly interface. It lets users log in with Facebook and buy articles from multiple publishers using a single account that they replenish as they go. Users can get a refund if they’re not satisfied. It helps publishers like the Journal identify potential subscribers to their own sites.
Still, skepticism about this approach has given way to the exploration of other models. Sourcepoint, a startup that provides publishers with tech to unblock blocked ads is working on a paywall product for publishers wanting to upsell ad blockers to subscribe. Long-term, though, it wants to build a Spotify-style site where people could pay a single fee to access multiple publishers’ content. The reason is, consumers have been trained to pay for online content this way, by the likes of Spotify and Netflix, said Brian Kane, a co-founder and COO of Sourcepoint. Micropayments also ignores the fact that some people may want the choice of paying in the form of watching an ad.
“We don’t think payment takes all. And we don’t think ads take all,” Kane said. “It’s very individual in how consumers pay for content.”
The reality is, publishers will have to do many different things to fix their business models, Vanneck-Smith said. “There is no silver bullet that can undo the damage that publishers have done in giving away content for free,” she said.