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April 21, 2014, 9:23 a.m.
Business Models
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A money-back guarantee: How Blendle hopes to convince Dutch news readers to pay by the article

Dutch readers can buy stories from virtually any large Dutch newspaper or magazine with just one click on a wide array of platforms.

The idea came to Marten Blankesteijn as the team behind Blendle, a new Dutch newsreading platform that allows readers to pay by the article, was out for beers one Friday night: Readers should be refunded if they don’t like an article for any reason.

“When my co-founder first proposed the idea, I thought he was crazy,” Alexander Klöpping, Blendle’s co-founder told me. “After a half hour I started to understand and after an hour I thought, Yeah this really might be one of the most important parts of the product.”

Blendle takes content from 15 or so of the Netherlands’ top newspaper and magazine publishers and allows users to buy stories individually, with just a click, no matter where they were originally published. The publishers set the price and take 70 percent of the revenue while Blendle takes the other 30 percent. But Blendle needed a way to convince readers that they weren’t risking too much by, say, clicking on that overwrought trend piece about gezichtshaar. (That’s Dutch for facial hair.)

There will be a limit to how many times a user can get a refund based on a ratio of how many stories they actually pay for — so the more you spend, they more you can return. When a reader asks for a refund, Blendle always asks why they want their money back, a feature that Klöpping said has already shown some worthwhile insights. For instance, many readers thought they were paying too much for short articles. “That tells us maybe we should do something about the pricing,” Klöpping said.

Still, while Blendle thinks the return policy will increase engagement, many publishers remain skeptical. Blendle is still in beta, and Klöpping said it’s too soon to tell if the policy was actually making a difference since it had changed how the refunds worked a number of times during the beta process. (Blendle is scheduled to go fully live a week from today, on April 28.)

“We have some reservations toward that specific feature,” said Han-Menno Depeweg, digital publisher of NRC Media, which publishes NRC Handelsblad, one of the Netherland’s largest daily newspapers. “It’s one thing to give readers’ their money back if there are technical issues or something is wrong with the formatting, but it’s another if they don’t like the content,” Depeweg told me. “As a publisher, we don’t want to give back money.” (Despite its reservations, NRC Media has decided to offer the refunds.)

The publishers are also still figuring out what the proper price point is for an article. TMG Media, which publishes De Telegraaf, the largest newspaper in the Netherlands, is initially selling shorter articles for €0.10 ($0.14) and longer pieces for €0.25 ($0.35), said Bart Brouwers, the company’s head of business development.

“All the publishers are in the same boat, and I have really no clue for what would be a reasonable price for an article,” Brouwers said. “Could you ask more for a column or ask more for a feature story? And something that’s exclusive for you? Does that have more value than other articles? That’s part of the experiment.”

With a population of only 16 million, the Netherlands is a small country, but according to the European Journalism Centre, a paid newspaper is read in about half of all Dutch households, though newspaper readership has declined in recent years. Since the bottom hasn’t fallen out of the print newspaper business, publishers there have been slow to innovate in the digital space, said Klöpping. “In Holland, basically we had a situation where all newspapers were for a long time very comfortable doing their paper subscriptions,” he said.

“We have iPad apps where we can read the PDF per issue or get a subscription, but that’s really it,” Klöpping added, noting that the papers have free sites, but there is less online content and it is completely different than what you’d read in print. “There’s no metered pay walls. There’s nobody like the Guardian, putting it all online for free and making money from the advertising. That’s just not going on in Holland. They now do feel the crunch of getting smaller circulation and they do feel the pressure to be a little bit more innovative.”

The race to make Dutch journalism more digital

As a result, there’s been an explosion of attempts to innovate digitally in the Netherlands. Blendle is one of a handful of Dutch platforms — eLinea, MyJour, and Yournalist are among the others — that are attempting to bill themselves as a central place for users to read news from multiple publications. If Blendle is an iTunes for news, eLinea would be Spotify — users pay €9.99 ($13.80) per month for unlimited access to the the content it offers. Yournalist also follows the Spotify model, but it’s still in development. MyJour, similar to Blendle in that you pay by the article, also recently introduced the ability to also return articles.

Many within the Netherlands say Blendle is one of the most promising of the platforms as it’s “technically, organizationally, and marketing wise the best at this moment,” said Brouwers. He added that Klöpping, who regularly appears on Dutch television, has become the face of media entrepreneurship in the country.

Still, there’s no guarantee that Blendle, or any of the other platforms, will be successful. TMG is participating with all of them as part of a yearlong experiment, Brouwers said. The publishers need to find other forums of revenue, and they’ve decided that it’s worth seeing if any of the third-party news reading apps will take off.

“We need those partners because they’re more flexible than we are at the moment,” Brouwers said. “They’re more entrepreneurial than we are at the moment. What we see happening is that they are taking steps that we’re not capable of at this moment, which is a shame. But still, it’s the case, and that’s why really we want to give it a chance. But still, we’re not really certain if this is going to work either for us or for the resellers themselves.”

But they might not need the partners for long. A number of publishers are in the process of developing a platform called Newz that will act as a central clearinghouse for the news organizations to send their content to the third-party applications. Newz is six to nine months away from being completed, but it ultimately could pursue additional third-party applications to sell the content to or even become a consumer-facing product.

BlendleLapTop

Blendle is generating excitement in the Netherlands, however, and many are anxious to get access, said René van Zanten, director of Stimuleringsfonds voor de Pers, a government-funded body that provided Blendle with €200,000 in seed capital. Blendle has also received funding from private investors, and Blankesteijn and Klöpping “have put in a lot of money ourselves,” Klöpping said.

“Everyone is exchanging passwords to see what’s going on,” van Zanten said. Though his fund has also provided capital to other journalism startups, he said Blendle’s model of paying by the article is more likely to work than a single flat fee because news organizations would rather readers pay for a subscription to their publication.

“For most of them that’s more than 10 euros a month,” van Zanten said. “They think they will lose the subscriptions. It’s a very defensive point of view, but they’re not willing to go along with that, or they’ll only provide a few articles per day, but people will get tired of it and they’ll prefer something like Blendle where they can get anything they want.”

One of the other features that sets Blendle apart, van Zanten noted, is its social focus. In addition to sharing articles on Twitter and Facebook, readers can see what stories their friends and other people they follow are reading.

Klöpping says the group is focusing now on getting the platform off the ground in the Netherlands, but is already looking at other similar countries in Europe where they could expand. “What we’re paying attention to is countries where they have newspapers that don’t have a lot of content online for free,” he said. On a recent trip to the United States, Klöpping also met with a number of news organizations to discuss possibly having their content be available to readers in the Netherlands via Blendle. He would not disclose who he met with, but said “you can guess the big names.”

Photos courtesy Blendle.

POSTED     April 21, 2014, 9:23 a.m.
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