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Feb. 23, 2018, 11:15 a.m.
Business Models
LINK: scroll.blog  ➚   |   Posted by: Laura Hazard Owen   |   February 23, 2018

Scroll, the news startup from former Chartbeat CEO Tony Haile that will charge $5 per month in exchange for ad-free reading across a number of sites, has signed its first partners ahead of its launch later this year, the company announced Thursday. They include The Atlantic, Fusion Media Group, Business Insider, Slate, MSNBC, The Philadelphia Inquirer, and Talking Points Memo. Gannett also signed on as a strategic investor, joining The New York Times, Axel Springer, and News Corp.

Last fall, Ken Doctor talked with Haile about how Scroll will work. Haile said at the time:

The interesting thing for me was to look at ad-blocking not so much as a problem with publishing, but as more of a consumer signal. In TV, that was what you had — you had increasing ad loads, which led to the consumer signal that was TiVo, and then led to the consumer signal that is Netflix. Music had similar kinds of frustrations, leading to SiriusXM, torrents, LimeWire, and that stuff, then leading to Spotify.

In media, you’ve had increasing ad load, increasing frustration, consumer signals, and ad-blocking leading to…what? So, the question for me was: Is there an orthogonal way to get direct consumer revenue? Not from access, but from experience.

Is there a group of people who will pay in general for an ad-free experience across X number of sites, or whatever? I kind of started with that.

Scroll does not allow people to get around paywalls on sites that have them if they aren’t already, separately, paying subscribers to those sites. Haile explained this to Doctor, too:

There is someone who isn’t a Scroll user and isn’t a Times subscriber. They get ads on 10 articles.

There is someone who is not a Scroll subscriber, but is a Times subscriber — they get ads on unlimited articles.

There is someone who is a Scroll user, but not a Times subscriber — so they get an ad-free experience on NYTimes.com, but then after 10 articles, they hit the paywall.

Then there is someone who is a Scroll user and a New York Times subscriber, and they get unlimited articles, ad-free. Those are the four quadrants that you can possibly be.

There are two things going on there: One is access, so you get more than 10 articles. The other one is experience.

The other key thing when you’re looking at this model is the thing that got people in trouble in the past has been this desire to try and merge the two. They’ve tried to do access and experience. When you try to do that, when you try to merge The New York Times’ subscription revenues as well as their advertising revenues, that’s where the economics start to really break down. We’re avoiding all of that. The New York Times, the subscription basically exists almost in an alternate universe to our ad-free experience in that context.

Scroll publisher partners will receive 70 percent of the revenue. The Wall Street Journal’s Ben Mullin explained on Thursday how that will work:

Scroll intends to pass 70 percent of its subscription revenue on to publishers, Mr. Haile said. That money is divided up among news organizations according to how much individual subscribers pay attention to each publisher, with a bonus awarded to outlets that cultivate a particularly devoted following.

If a Scroll customer spends 10 percent of her time with a specific publisher, then that outlet would receive 10 percent of that customer’s subscription fee allocated to publishers based on attention.

The revenue set aside for publishers also includes a pool of bonus money for publishers that win over a loyal audience. If an organization is responsible for 20 percent or more of a Scroll subscriber’s attention, the organization becomes eligible for a larger share of the revenue from that subscriber.

Scroll is set to launch later this year.

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