Apr 28, 2015

8 min read

Blendle:
A radical experiment with micropayments in journalism, 365 days later

One year of journalism without subscriptions, without ads and without clickbait

Today exactly one year ago we launched our pay-per-article startup Blendle in the Netherlands. The goal: put all newspapers and magazines in the country behind one (quite sexy) paywall, and make it so easy to use that young people start paying for journalism again.

Back then most newspapers and magazines in our tiny little country assumed we wouldn’t make it until today. After so many failed attempts by publishers worldwide to make money online, a lot of them thought there was no other online future for journalism but clickbait and cat videos. Why would people pay for journalism when there is so much free stuff on the web?

But here we are. With over 250,000 users (that’s almost everybody in the Netherlands) of which the vast majority is under 35 years old, we’re proving that people do want to pay for great journalism (even though we like cat videos too). And we’re hoping that our second year will be an even crazier rollercoaster ride, with recently signed global licenses to sell The New York Times, The Wall Street Journal and The Washington Post, and many more to come.

Why weren’t — or aren’t — people paying for great journalism on the web?
For publishers, it’s a struggle for attention. And because of that, many newspapers and magazines publish their best stories for free. Free stories get you a lot of traffic, and traffic can be monetized through advertising. But more and more publishers realize they can’t build their business on that model. Income from advertising is declining, the competition of Facebook and Google is very strong, 41% of the younger people are already using ad-blocking plugins, more and more kids are browsing in incognito mode, leaving no cookies at all, and native advertising makes readers and journalists alike very uncomfortable.

As The Economist’s Tom Standage said:

“The Economist has taken the view that advertising is nice, and we’ll certainly take money where we can get it, but we’re pretty much expecting it to go away. I have nothing against advertising as a source of revenue as part of the mix, but I’m kind of amazed that people are trying to do that.”

For that reason publishers all over the world are pulling up paywalls, to diversify their sources of income. Most of them end up with one of these three models:

A paywall called “The meter”
Every month the newspaper gives away a couple of articles for free. After that, you’ll have to pay up. A screen will notify you that you’ll need to take a subscription if you want to continue reading. This is what The New York Times has been doing since 2011.
For them the model has been working reasonably well. That’s why a lot of publishers are copying this model. The thing is: it might work for a huge newspaper (like the Times) in a huge market, but it won’t for smaller papers in smaller markets. Only a small percentage of people bump to the paywall and an even smaller subset of this group takes a subscription. You need tens of millions of visitors to make this worthwhile.
The “freemium model”
The good stuff is available for free. But to see the really good stuff, you need a subscription. German newspaper Bild uses this: some articles are marked with a “Bild+”-logo, and you need to subscribe, in this case for 5 euros per month, if you want to read them.
The hard paywall
Every link you click, you’ll see something like this: Pay up now! Or leave! The best examples are the Financial Times and The Times in the United Kingdom. It works if you really, really want to read content from one of these (great) newspapers. Most people just leave the site after three seconds.

Those models have one thing in common: they all try to get people to subscribe. And that makes sense from the publisher’s perspective — if you have a lot of subscribers as a publisher, everything is awesome. But on the web, most people don’t want to be forced to buy bundles anymore. And that means that a lot of people don’t want to subscribe. Still, publishers are moving to paywalls that get ever more restricted. A pattern is starting to emerge:

Many people hate paywalls. They make us register again and again at every newspaper or magazine we want to read. And they make us pay monthly fees for entire websites, while there’s all kinds of stuff on there we don’t actually read.

So, we started thinking.

Journalism needs a great user experience

What if:
- You could read all the journalism you care for in one place
- You would only need to register once to read it all
- You would only pay for the articles you actually read
- You’d get your money back if you didn’t like the story
- No subscriptions
- No ads

That’s what we launched in The Netherlands exactly one year ago.

At the time, we used to pitch Blendle as “the iTunes of journalism”. But Blendle is not only about paying little if you don’t consume a lot. It’s also about the convenience of reading and paying with only one click. It’s about our focus on the very best user experience (with our instant refund policy being a good example). And it’s about the way we help users to find the premium journalism that they find most interesting.

Over the past 12 months we’ve proven in the Netherlands that there’s a new market for publishers, next to selling subscriptions, full issues and advertising. Without spending a single euro on marketing, we gathered over a quarter of a million users. We generate a very decent amount of money (I can’t say how much, unfortunately, only that it’s more than Apple generates for publishers) in our short existence. But more importantly: it’s money from people who weren’t paying for journalism before. My friends have never paid for music and movies, until Spotify and Netflix. And with Blendle, they’re paying for journalism, often for the first time in their lives.

These are some lessons we learned in the first year of our existence.

Micropayments for journalism can work

I might have made that point before.

But it doesn’t work for news
We don’t sell a lot of news in Blendle. People apparently don’t want to spend money on something they can get everywhere for free now. People do spend money on background pieces. Great analysis. Opinion pieces. Long interviews. Stuff like that. In other words: people don’t want to spend money on the ‘what’, they want to spend money on the ‘why’.

Our users punish clickbait by refunding

In 2015, sometimes it feels like the best example of modern journalism is Buzzfeed. Go to any journalism conference, and their logo will be on many, many slides. As a journalist today you might feel that it’s more valued to write clickbaity headlines than to write pieces of well-researched journalism. But, Buzzfeed doesn’t work if people need to pay per article.

At Blendle we see this every day. Gossip magazines, for example, get much higher refund percentages than average (some up to 50% of purchases), as some of them are basically clickbait in print. People will only pay for content they find worth their money. So in Blendle, only quality journalism starts trending.

It might actually be so that micropayments will result in better journalism. As a publisher, you have to invest in incredible journalism to be able to sell them on a per-article basis. Luckily, a lot of incredible journalism is being produced every day.

Micropayments and refunds create a great metric for quality

For 20 years, publishers have been chasing pageviews, the metric that counts the number of times people load a web page. As the CEO of analytics firm Chartbeat wrote:

“The more pageviews a site gets, the more people are reading, the more successful the site. Or so we thought. Chartbeat looked at deep user behavior across 2 billion visits across the web over the course of a month and found that most people who click don’t read. In fact, a stunning 55% spent fewer than 15 seconds actively on a page.”

More and more publishers started looking at engagement time instead of pageviews. It matters more to measure engagement in minutes and seconds then links clicked.

In The Netherlands, journalists now have access to two important extra metrics for their stories:
1. How much revenue did the stories generate in micropayments?
2. How many people asked for a refund after reading the stories?

If one goes up and one goes down, a publisher is doing great.
(On average, in only 5% of the cases a user asks for a refund.)

The revenue from micropayments is additional

One year ago, some publishers in the Netherlands were pretty scared: would the launch of Blendle result in cancelled subscriptions? Some even put questions about Blendle in their phone scripts, for when people called to cancel their subscription. We do now know for a fact that Blendle doesn’t attract their current customers, but a new group that’s currently not paying. And now we’ve figured that out, we can do some great stuff the coming year. Trying to stay ahead of the curve for micropayments in journalism. We’ll be working with publishers to integrate Blendle in their apps and websites.

Our second year will be about expanding internationally.

We’ll see if Dutch people are just crazy, or if we’re really on to something with this micropayments model. Hopefully it will grow out to become a viable alternative for the models of the past. With less reliance on advertising. And more support for great journalism.