Tech startup Blendle says it can get people to pay for journalism again
UPDATE: Since publishing this yesterday, there has been a major development in the Blendle story. According to Business Insider, three major US newspapers have signed on to offer their content — The New York Times, Wall Street Journal and The Washington Post. This will surely provide a major boon for Blendle, but the hurdles I described below are still there. The biggest feat will be getting US readers to opt in.
Blendle wants you to pay for good journalism.
It’s been described as “Spotify for Journalism,” and the same write-up said it uses a “Netflix” model, which is totally inaccurate (good job Tech Crunch).
Spotify Premium and Netflix, as you know, get users to pay a monthly fee and those users have unlimited access to the entire content library. How Blendle actually works is publishers opt-in to provide their content through the service, and Blendle’s users pay a small amount for each article they read.
So, what does that mean for the money publishers could earn through the service compared to the way they’re currently making money? It’s difficult to say, as there hasn’t been much insight into Blendle’s rev-share models just yet.
A rough comparison could paint a picture that looks something like this:
If an average newspaper CPM is around $7 (comScore), that means for each article with four viewable ad spots earns a publisher about three pennies online (and that’s before any ad partners take their cut). Blendle lets publishers charge 10 to 30 cents per article read. Whatever the pub’s cut, that’s certainly more than a few pennies.
If 5,000 people read an article with CPM-based advertising, the publisher will have earned a gross $140 for that article (4 ad placements X 5,000 readers = 20,000 impressions at a $7CMP = $140). But if the same 5,000 people spend a dime to access that article, the gross earnings (before Blendle’s cut, obviously) is $500 — and that’s more the combined daily salaries of the reporter who wrote the story and the editor who edited the story (based on industry averages).
If you’re going to use the “this for that” method to describe Blendle, it would be more-accurately described as “iTunes for Journalism.” Publishers opt-in to have their content library available through the service, and instead of having to subscribe to the entire publication (“buying the entire album”), users just pay for the articles they want to read (“songs they want to listen to”).
Is this monetization strategy the one that’s going to save the journalism industry? Hardly, especially for those in print media (which is largely what Blendle’s current crop of publishers are). Despite the growth in digital advertising, print media outlets still make a lion’s share of their revenue from print advertising (here’s some data; it’s more than a year old, but look at the overall trend and you’ll totally get the idea). That type of revenue can’t easily be replaced, and barring some “discovery of electricity” type innovation, it won’t happen overnight — and it probably won’t happen with just one revenue stream.
Another barrier to Blendle’s widespread success will be adoption — both from users and content providers. This transition was easier in the company’s home base of the Netherlands because “many publishers were not publishing content online — for fear of the impact on their businesses,” reported TechCrunch. And THAT’S the way iTunes became a thing, not primarily because it offered users the ability to pay only for the content they wanted, but because it solved also a distribution problem. Before iTunes (I’m taking piracy methods out of the conversation, because we’re talking about revenue models here), the steps one had to take to get their favorite music on a digital device (MP3 Players, back then; remember those?) were several (you remember what they were). The first step being a visit to a place where you had to purchase a physical copy of that media.
That’s the difference here, and the uphill battled that Blendle must face. In the US (and much of the rest of Europe, where it is currently striving for growth), the service only solves a revenue issue — not a distribution issue. Had newspapers never offered up their content online for free (well, on advertising-supported platforms), then US/Europe readers would see Blendle as a solution to their distribution problem. Users don’t have a “how to I pay for this” problem.
In Blendle’s world right now, however (there are reportedly about 200,000 users) there are people actually paying for journalism. That’s awesome.
So, in their mission for expansion, while Blendle might find it easier for getting publishers to opt-in (because the thinking might be, in part, “what have we got to lose?), the real difficulty will be in getting users to opt-in and offer up their payment details in return for access to the content. The biggest thing Blendle can offer users in the hopes of that would be an amazing user experience, complete with a lightning-fast and clean interface and the ability to customize the experience as much as the user wants. Those things, the Blendle creators could actually provide. It’s in their power to do so.
Oh, one awesome twist: Users can demand a refund for articles if they feel ripped off. All they have to do is leave a review of why they’re demanding their money back. Good luck surviving in that ecosystem, you creators of click-baity bullshit.
Additionally, Blendle’s model would seem to have its highest effectiveness on the day of publication. Since its users would primarily consume the headlines from the custom feeds they create, they’d be only exposed to the most recent stories. Publishers will still have to rely heavily on advertising to monetize their archives. Because of this, advertising dollars of some kind will probably always play a major role (reaching those audiences is simply too valuable for advertisers not to pay for it as well).
So while Blendle has many hurdles ahead of it, especially if it truly wants to revolutionize the way audiences consume journalism, this type of service has at least the potential to be part of the equation for the replacement of withering print advertising dollars.
What’s the most encouraging, though, is that there are young people and innovators still seeking to secure the future of quality journalism. That’s a mission worth taking on.
Read More: This startup may have found the answer for getting people to pay for journalism online (Business Insider)
Read More: Blendle Grabs $3.8M To Expand Its ‘Spotify For Journalism’ (TechCrunch)
Read More (Update): The New York Times, Wall Street Journal, and The Washington Post have signed up [rest of the super-long headline omitted] … (Business Insider)