Scroll CEO Tony Haile: ‘We’re moving to a world where simplicity matters’
Publishers had to embrace new metrics and modes of thinking when they first made their way into digital media. In many respects, Tony Haile helped nurture that new mindset by creating the analytics tool Chartbeat, and he will be shepherding publishers toward another emerging mindset with Scroll, a product that charges users for an ad-free version of publishers’ sites, which will launch at the beginning of next year.
Haile got on the phone with Digiday to discuss the pressure publishers are under from both advertisers and subscriptions. The conversation has been condensed.
Can publishers still be captains of their own ships in 2019?
If I were to think about the dominant analogy for publishing in the next year, it would be like a peloton in the Tour de France. You’ll still see competition between publishers, but there’ll have to be a fair amount of collaboration.
Collaboration on what?
We’re moving toward a world where simplicity matters. Think about advertisers. On the one side, you’ve got Deloitte, PwC, and Accenture, and on the other, you’ve got Salesforce, Oracle and Adobe. And all of these players are making a case to the advertisers that when you’ve got 80 percent of your spend going to two places, the pipes are simplified and we can help you at the more strategic level and replace the job that the media buying agencies used to do, which was to be the last travel agent for the web.
What that means for publishers, increasingly, is when they’re trying to win on ad buys, they’re going to have to compete on that simplicity. That means you’ve got to offer ads at scale, which generally means an ad network. However, you’ve got to be able to offer non-standard ad formats, to compete with the platforms.
Different groups of publishers in Europe have been trying to do this for a while, but it hasn’t been a huge success. Doesn’t collaboration come with its own set of challenges?
One of the challenges that publishers are going to have to face in this coming year is this need for simplicity, along with the need for differentiation. A lot of people have been building up strong product teams and lots of custom technology, which might not be that different from somebody else’s, but it might prevent them from being able to join these solutions that offer simplicity. How will product managers deal with going back to being vendor managers again? There’s some real questions about how we deal with that level of simplicity at the casual fan level.
Do you think that that kind of collaboration will be enough to save the middle class of publishers?
We should be very clear that there’s no one thing that’s going to save any publisher. I think that with that middle tier of publishers, there are two things they have to work through. They have to work through how they can make their operations as lean as possible without sacrificing content and then figure out how they can plug into these collaborative opportunities.
[With subscriptions], there’s real challenges as you go beyond the top, current winners in this space. Once you go beyond the New York Times and the Washington Post and the newspapers that can get corporate credit cards, then it starts to look pretty tough.
If I was going to say the thing that would save any particular class of publishers is an understanding that optimizing the old is not going to work. We have to be trying as many new and different things as possible because it’s going to be a mix.
What do you think it is that could lead to an uptick in people paying for journalism? What else do you see continuing to fuel this?
I’d be somewhat terrified if we had to rely solely on fear in the decline of democracy. When we think about getting people to pay, there are two ways to cut the funnel. There’s a segment at the bottom of your funnel: Your most engaged. In general, it’s about two percent of your market size. The New York Times, after probably the more successful subscription drive of the last two years, is at about two percent.
Then there’s cutting vertically along the funnel, and people who care about experience. The tricky question for us over the next two years is how the hell we’re able to target both of those audiences around direct to consumer payments. it’s possible to build great consumer affinity, but going beyond that two percent is going to be hard.
You’re hoping to win by going after people who care about experience.
I’m obviously making a bet that experience matters to a broad range of casual fans, and publishers are rightly making a bet that brand affinity matters to a smaller range of super-fans that they can charge high prices to.
The more interesting question is not whether this continues or not. It’s the one metric we don’t know the answer to: Given the total pool of people who are willing to subscribe to news, media, et cetera, what is the average number of subscriptions they will have? I imagine it will be in the range of 1.0.
There’s a case to be made that there’s a user behavior of saying, “There’s enough going behind paywalls that I need to get a subscription.” And therefore, if I’m going to pick, I can either pick this magazine bundle, or I can say, “You know what, the New York Times probably has the most coverage of what’s relevant to me, so why don’t I just go with them?”
There’s a potential case where the rise of all the paywalls has as much of an impact on growth for the big players, where they convert from non-paying consumers than it does for lots of little niche audiences.
Do you worry at all that this push toward collaboration and improving the advertising ecosystem will clean the system up faster than you can capitalize on the current distaste for it with Scroll?
My bottom line is this: If we can figure out how to fund journalism, whether it’s through Scroll or something else, I’ll go to bed a happy man. If my company fails because we’ve done such a good job of cleaning up the web, then fucking fabulous.
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