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June 10, 2019, 11:55 a.m.
Aggregation & Discovery

Micropayments-for-news pioneer Blendle is pivoting from micropayments

“I have to be honest: We are still not making a profit.”

People keep wishing for micropayments. (“Just the one article, please! I’ll pay for it!”) But micropayments keep not panning out. And just as the world says a not-particularly-teary goodbye to iTunes, the most talked-about candidate for an “iTunes for news” is undergoing a major life change of its own.

One of the more promising micropayment startups has been Blendle, the Dutch startup with millions of dollars in investments from The New York Times, Nikkei, and Axel Springer. Even last year, two more investors put $4 million into the company. But Blendle has yet to turn a profit and is now pivoting away from micropayments to premium subscriptions, cofounder Alexander Klöpping told a Dutch newspaper last week. (H/T to Dutchnews.nl, which had the news in English.)

“I can lead a team of 50 people and we have 60,000 subscribers in the Netherlands and hundreds of thousands of users who pay per article. But I have to be honest: We are still not making a profit,” Klöpping said.

He said they’re leaning on subscriptions (which launched in 2017) instead because, well, they’re more valuable than people who pay in quarters: “Premium members turn out to be much more active and read or listen to considerably more pieces. On average, they spend 22 minutes a day on Blendle, three times as many as users who pay per item. For us, of course, premium offers a much more stable source of income, which means we can continue to develop great features for our users.”

Here was Blendle’s model, back in 2014, with 130,000 registered users:

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.

Blendle expanded to Germany in 2015 and then in the U.S. with 20 publishers in closed beta: The Wall Street Journal, The New York Times, The Washington Post, The Economist, The Financial Times, Mother Jones, and others you could guess:

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…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…

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.

In all, Blendle has paid out a total 8 million euros to publishers in its five years of existence, Klöpping said. But now, “quarters per article are not going to make the difference.”

He added that the company is continuing to focus on its recently-launched audio arm, in addition to its premium subscription service, which is now adding a new selection of magazines. Individual article sales will cease in August. He announced the change with a video. (It’s in Dutch, but YouTube’s auto-translate captions can give you the gist.)

Blendle Premium’s target is 100,000 subscriptions, the level Klöpping says is needed for Blendle to reach profitability, and they’re halfway there now.

Blendle has been mostly quiet in English-language circles in recent years after it launched its U.S.-focused app, which didn’t seem to gain much traction, in 2016. In recent months, its iOS app has ranked between No. 750 and No. 1,500 in the News category of the U.S. App Store. Last year, Klöpping told a Dutch interviewer that “in retrospect, we went abroad too quickly” and that “we are not investing” in the U.S. app.

In the Netherlands, it ran into difficulties: a cofounder departed and high-profile publishers NRC and De Telegraaf pulled out of deals to be included in the premium subscription or reduced their presence in the app. (NRC was blunt about why: “Despite all our sympathy, we sincerely fear that in the medium term Blendle is not good for journalism.” It said it considered Blendle’s subscription product evidence it was “fishing in the pond of our subscribers.”) In 2017, Blendle laid off 9 of its 67 employees.

According to public records, Blendle lost €2.8 million in 2017 after losing €2.4 million in 2016. The tumult prompted headlines like “Will Blendle survive 2018?”

The company has invested heavily in audio, where it sees younger reader shifting their consumption — is the old “iTunes for news” now the “Netflix for podcasts”? — and tried things like selling individual book chapters. And now it’s stepping away from its initial calling card.

POSTED     June 10, 2019, 11:55 a.m.
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