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March 23, 2016, 8 a.m.
Business Models
BlendleKiosk

Testing its pay-per-article model in English, Blendle launches in the United States with 20 publishers

The Wall Street Journal, Washington Post, Time, and more are now publishing on the Netherlands-based micropayment platform. Will a market awash in free content be interested?

Blendle, the Dutch platform that lets users pay by the article, launched in a limited beta in the United States on Wednesday by partnering with 20 outlets — including premium publishers like The New York Times, The Wall Street Journal, The Washington Post, The Economist, and Time. It’ll be a significant test of its ability to bring its micropayment model to a market swimming in free content.

Publishers on Blendle U.S.
The Wall Street Journal
The New York Times
The Washington Post
The Economist
The Financial Times
Time Inc.
Foreign Affairs
Newsweek
New York
Bloomberg Businessweek
Fast Company
Inc.
Game Informer
Barrons
New York Review of Books
World Politics Review
Mother Jones
The Atavist
Advertising Age
The Huffington Post’s Highline
Blendle gathers stories from its publisher partners into a common app and then lets users purchase individual articles, regardless of where they were published originally. Its initial U.S. launch will be restricted to 10,000 users, and stories will be priced between 19 cents and 39 cents for newspaper articles and 9 cents and 49 cents for magazine stories. If users are unsatisfied with a story, they can ask for a refund. Each outlet sets its own prices and keeps 70 percent of the revenue. Blendle takes the other 30 percent. That’s similar to Apple’s App Store take — fitting, given that Blendle is the closest thing to the “iTunes for news” model some people have been asking for for years.

Blendle launched in the Netherlands in 2014 and in Germany last year, and a number of English-langauge publications have been using the platform in Europe. The New York Times Co. and German publisher Axel Springer invested €3 million in the company in October 2014.

Blendle also plans to introduce additional options that will let users subscribe to individual publications. Blendle co-founder Alexander Klöpping said the company will introduce the subscription plans in Europe first, but will “bring it to the U.S. very soon.”

In the Netherlands and Germany, 650,000 people have signed up for the service. Blendle gives new users credits to try it out for free, and Klöpping said about 20 percent of users who initially sign up end up connecting a credit card to their account. He wouldn’t say how many articles have been bought, though.

It remains to be seen, of course, how the micropayment service will translate to the American market. Esquire has experimented intermittently with charging readers for single stories online, GQ has experimented with charging readers for stories if they’re using an adblocker, and last year The Winnipeg Free Press in Canada became the first North American newspaper to launch a micropayment system. Through February, the Free Press had 4,000 registered accounts, and it projected that it would generate $100,000 ($76,365 USD) from the program this year, according to its parent company’s most recent earnings report.

The German (80 million people) and Dutch (17 million) markets are smaller than the American market (319 million), and when it launched in those countries, Blendle was able to add virtually every major newspaper and magazine onto its platform. That’s not the case in the United States, where there’s much more English-language content available online for free. (A far greater percentage of publications in Europe use hard paywalls compared to stateside outlets.)

As a result, Blendle is pitching the product to American users as a way to cut through the noise of content published online to reach high-quality stories, Klöpping said. “The messaging is different,” he said. “In the United States, we put way more emphasis on the fact that we help users discover content from publications that they normally wouldn’t read so much from.”

And once users are in Blendle’s app, Klöpping said he’s confident they’d be willing to pay for stories they might be able to get for free elsewhere.

“When publications put some of their articles for free on their site, it doesn’t really impact the way people pay for it,” Klöpping said. “We don’t see a decrease in opens. It’s very logical actually: When you’re in an app and it serves you a couple of articles that are really interesting to you, a lot of people aren’t going to be bothered to Google a headline and figure out where else they can find the stories for free.”

BlendleTimeline

Blendle has editors in its Dutch office curating articles for an English-language newsletter that highlights stories on the platform, and it soon plans to hire more staffers for the English site in the Netherlands and New York. Blendle also has algorithmic recommendations, and users can also follow outlets and others on Blendle to find stories as well.

It runs German and Dutch versions of the newsletter, and it also will put together collections of stories around news events, such as this week’s attacks in Brussels.

[Translation: Are you on Blendle? We have opened a channel with only the best background stories. Interpretation is important.]

Beth Diaz, The Washington Post’s vice president of audience development and analytics, said the newsletters have been helpful in directing readers to Post stories on the European versions of Blendle. The Post, along with outlets such as The Economist and The Wall Street Journal have already been posting stories to the European versions of the site.

Diaz wouldn’t say how many Post stories had been bought on Blendle, but she said it’s been “a modest source of traffic and revenue.” In the United States, the Post is charging 19 cents per story and will send everything that’s published in its print edition, along with a few other stories, to Blendle each day.

The Post, she said, is interested in seeing how the micropayment system translates to an American audience. “My expectations are that we’re going to get a lot of great information that should help us figure out if we need to adjust our strategy in terms of our partnership with Blendle, and perhaps overall,” Diaz said.

The Wall Street Journal has also been publishing on Blendle’s European editions. Though she wouldn’t share specific figures, Dow Jones chief customer officer Katie Vanneck-Smith said that because of Blendle’s young audience — more than half of its users are under 35 — technology stories have done well on the platform while U.S. politics coverage hasn’t been as popular, though she noted that those are “starting to pick up with Trump.”

The Journal has charged for full access to its website since the web’s earliest days, and Vanneck-Smith said that Blendle was just another way for the paper to get readers to pay to access its journalism. Journal stories will cost 39 cents each.

“I definitely think that this is the next wave of paid-for propositions,” she said. “Is it the only way? No. Nothing is going to be the only way. But anything that makes it easier for customers to buy and pay for professional journalism is a good thing. Anything that takes the friction out of paying for quality journalism, we have to support as an industry.”

Time Inc. also sees the service as an opportunity to reach new readers. It’s starting by only offering Time magazine stories on the platform, but could eventually add other titles, said Scott McAllister, Time Inc.’s senior vice president of digital marketing and revenue.

It’s still deciding on its pricing structure, but McAllister said it could decide to charge more for larger features or cover stories. Everything Time publishes in print each week will be available on Blendle. Much of its print content is only available online for subscribers or users who purchase full digital replicas of the magazine. Time hopes Blendle will enable it to reach a different, younger, audience that might not purchase the magazine in those ways, McAllister said.

“It’s a different model, it’s a different type of consumer,” McAllister said. “Many of our consumers get the magazine and enjoy flipping through…This is a different model where you’re looking for very specific topics or information. Surely, there’s some sort of concentricity in terms of the two models, but our thoughts are it’s not actually a large overlap.”

Photos courtesy Blendle.

POSTED     March 23, 2016, 8 a.m.
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