From PressReader, the original ‘Netflix for news’
It’s been an interesting week here at PressReader. We’ve been running the world’s largest ‘Netflix for news’ for over a decade, so we watched Tim Cook’s Apple News+ announcement with great interest.
And I have to say, when it comes to an unlimited reading model for news and magazines, we have some differing thoughts on what the right business model looks like.
Who we are
If you’re unfamiliar with PressReader, that’s probably because we’ve been bootstrapping our growth for a number of years. So we haven’t spent tons of cash on splashy marketing. But we’ve been growing really quickly, and we’ve been profitable since 2008. Our MAUs have climbed from just 100,000 a couple years ago to more than 12 million, and we’re demolishing our previous records every month.
What we do
We run an unlimited reading platform, offering access to more than 7,000 newspapers and magazines from around the world. And we’re talking full versions of every issue, not just a selection of articles. Our publishing partners include The Guardian, The Washington Post, The Globe & Mail, the Los Angeles Times, Newsweek, Bloomberg Businessweek, Rolling Stone, Variety, GQ, Vogue, Yoga Journal — you name it. No matter what people are passionate about, there’s content for them on PressReader. We’ve spent years building relationships with publishers, from international megabrands to local news outlets, all around the world. Our goal is to build a truly sustainable business that’s profitable for publishers and loved by users.
And critically, that means finding a way to work with news publishers as well as magazine publishers.
Newspapers and magazines are different
News is a somewhat trickier model. Newspapers are a daily product. This means workflows to produce, publish and process content are different for newspapers than they are for magazines. This is true not just for publishers, but for content aggregators too. Avid readers read newspapers every day, as opposed to monthly for most magazines. For all these reasons, working with newspapers is more expensive and more complex. But unlike others who have tried and failed, we found a way.
How we pay publishers
Right now, you can buy single issues on PressReader, plus we offer an unlimited access subscription for $29.95 USD per month. It’s not cheap, we know. But this allows us to pay our publishing partners fairly. Every time someone reads a magazine or newspaper issue, we pay that publisher. Our model is based on consumption, rather than ‘time spent’ like Apple News.
Paying publishers based on time spent is interesting, but there’s an important caveat: all the spoils generally end up going to just a few players. We ran the ‘time spent’ model on our own system and found that just five publishers would take home the vast majority of revenue, leaving next to nothing for the thousands of local, regional, niche, and just not-so-huge publishers who are so vital to our media ecosystem.
And this is where we differ from others: we very much believe in the value of good content. It’s easy to say nice things about ‘quality journalism,’ but it’s quite another to put your money where your mouth is. We want our payments to publishers to reflect the value their content brought to readers. So we pay them as though someone actually purchased that issue.
The bonus is, publishers then get to count their PressReader consumption toward their audited circulation in the majority of countries around the world. For many of them, this is important. It helps them sell print advertising at better prices — because our digital editions include everything you see in print, ads and all.
The subscription economy is the real deal
The last thing we want to see in the media industry is a race to the bottom. It’s a tough, competitive world. No question, the internet upended the industry. But study after study has shown a refreshing uptick in the willingness of people to pay for news, especially amongst young people. Our own data confirm this: more than 20% of our active app subscribers this past year are under 35. That’s up from 16% the year prior, and 13% the year before that.
Faced with a deluge of low-quality, clickbait content, people have (wisely) begun to appreciate just how good journalism from trusted sources is. And they’ve also started to appreciate just how important it is to get news from a variety of perspectives, so that none of us get stuck in a ‘filter bubble’ where we only hear one side of the story. And by ‘variety of perspectives,’ I don’t just mean political perspectives. Having access to international content and coverage from a variety of countries is so valuable in the world we live in today.
This burgeoning demand opens up a huge opportunity for content aggregators who provide premium content at one simple price.
But it also means that content has to be paid for, fairly. And any business that brings content sources together needs to be underpinned by a model that is profitable and sustainable for publishers too. Without publishers, there’s no such thing as content in the first place.
Our business model
So our model is simple: we pay publishers every time someone reads their content.
And we monetize that content in two important ways:
One is the simple subscription that we talked about. (And before you ask, are we planning to drop our price any time soon? No, because we offer both newspapers and magazines, and to offer unlimited access to both and pay publishers fairly, this is the price we need to be at. Might we explore other models that essentially allow you to pay a lower monthly price for a lower consumption threshold? Sure.)
The other is by having a business sponsor PressReader access, so people get to enjoy it for ‘free.’ What does that mean? When you fly with an airline, or stay at a hotel, or (yes!) visit a library, there’s a good chance that they’re paying for you to enjoy unlimited access to PressReader. With this model, publishers get paid, people often discover new content they otherwise might never have tried, and businesses get to offer you something useful and personalized.
We’ve had huge success with this model, and it’s become an important revenue stream for PressReader. To date, our thousands of sponsored access partners include household names like British Airways, Turkish Airlines, Cathay Pacific, Air Canada, Marriott, the New York Public Library — you get the gist.
The point is this: with a little imagination and a lot of hard work, it’s possible to build a profitable, scalable future for publishing. And we believe that means combining multiple revenue streams, so you’re not relying on subscriptions or ad revenue from a single source.
Technology is everything
Of course, it’s not just about the business model. You may not love the idea of reading PDFs of newspapers and magazines on your phone. That’s why technological innovation is so important. But to build a nice-looking UI and then ask publishers to spend tons of money, time and effort preparing their content to fit your very, very custom format: well, that’s not super scalable.
Our approach has been to keep things easy for publishers, and do the heavy lifting ourselves. We built a proprietary method of automatically extracting text and images from the print editions of newspapers and magazines. What does that mean? You can just tap on an article and read it in a mobile-friendly format. You can instantly translate it in up to 18 languages. You can have it read aloud, you can share it, you can search across millions of articles — all the things you want from news content, but that normal PDFs don’t let you do.
And all we need from publishers? The regular PDF they already send to their printers. No need to hire a bunch of extra people just to support their partnership with us.
Plus, we do the hard work to keep their content secure. That means no one can write a little script and just extract an entire PDF and share it with anyone and everyone.
Going forward, there’s much still to innovate. We’re working on radically improving content recommendations, using machine learning and human curation together. We’re obsessively improving our app experience on both iOS and Android, so that finding the content you love becomes even easier. And we have a couple of other big ideas up our sleeves, naturally.
Our mission is discovery
We also strongly believe that PressReader is an important partner for publishers, but we never claim to be their savior. For good reason, publishers will always want to build direct relationships with as many of their readers as they can. We encourage them to do so. We help them to do so. In our vision of the future, many people will subscribe directly to publications they love. Others will opt for the simplicity they get from subscribing to PressReader, enjoying unlimited, seamless access to the content they want to read, all in one place. And publishers will enjoy meaningful revenue from both, because our partnership is built on a sustainable foundation.
There’s a reason so many publishers have chosen to work with us the world over. Our goal is simple: to build something that’ll last.
Join the conversation
We want to hear from you. What are your thoughts and questions? What concerns or ideas do you have about the future of the media industry? As a reader, what do you want to see?
Alex Kroogman is co-founder and CEO of PressReader.