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Q&A: Agate takes micropayments one step forward

Based in London, Agate Systems was founded in 2017 by Dominic Young to help enable better business models for media companies. His previous positions include heading up Strategy at News UK, International MD for Digital of News Corp, as well as numerous industry positions and initiatives. WNIP caught up with Dominic to learn more about Agate’s unique micropayments model.

What business problem is your company addressing?

Agate solves the news media’s pressing need for revenue streams direct from their consumers. Digital advertising revenue is falling, for a number of reasons: Google and Facebook’s duopoly on digital advertising sales, an increasing use of ad-blockers, changes to data laws, and a reliance on fickle social media platforms for site traffic. Subscriptions have not been successful enough to supplement this revenue loss.

Some publications have subscription models to generate direct consumer revenue, with a few achieving real success. However, subscriptions can prove too much of a commitment for casual readers. Converting more than a few percent of audience to a subscription is hard, even for the most successful titles.

What is your core product addressing this problem?

Agate addresses these challenges by providing publishers with a direct source of consumer revenue, and by giving readers a way to effortlessly pay for online content without commitment.

Agate is a centralised digital wallet system that lets readers pay on an article-by-article basis. Users upload money to their Agate wallet and can spend it across Agate-enabled sites. Registration is minimised to an easy, one-time process, and users don’t need to download a separate app – Agate automatically appears on the site. Pricing includes a ‘free point’: a maximum price (or number of articles) that a user reaches before being given unlimited access for the rest of a given period.

Agate works for publishers because it facilitates a more sustainable business model for them: it gives them a predictable and reliable connection between the popularity of their content, and their income. It doesn’t impose limits on market size, giving publishers reasons to encourage maximum consumption across participating sites. It works for readers because it gives them a way to access online content at low cost and without commitment, without the hassle of managing multiple subscriptions.

Can you give some examples of publishers successfully using your product/solution? 

Agate is currently live on Popbitch, The New European and Reaction. We are under NDA with dozens more in various territories with more launches imminent.

Pricing?

With Agate, publishers have full control over the prices of their product. They set the price of an article, the price cap for the ‘free point’ and the time frame of the ‘free point’ (a day, a week etc). Article prices typically range between 10p and 30p, with ‘free points’ varying with each publication. Agate’s model is revenue share – there are no up-front costs for publishers to enable it and integration is quick and simple.

What are other people doing in the space?

This is a pretty new space and we are approaching it in an innovative way.

There are some companies looking to achieve scale of customers by aggregating news articles from a range of publishers into a separate app, for which users pay a single subscription fee; others offer an ad-free viewing experience for a price; and others provide access to news using micropayments.

What makes Agate different is that its experience is centerd around the desires of the consumer, and its business model is centred around the needs of the publisher.

Subscription based, bundled digital products limit the amount of revenue available to be shared between producers: the monthly price paid by the subscriber, times by the highest number of subscribers. Agate’s business model grows the available market in revenue terms every time someone consumes something, as well as encouraging innovation and investment in content producers, which grows the size of the entire industry. It motivates publishers to be ambitious by removing limits on success.

How you do view the future?

Agate’s vision for the future of journalism goes further than simply ‘stopping the rot’. With Agate, we want to create a more substantial, competitive and sustainable future market for the news industry.

Something else to note: Agate’s system is not aimed specifically at news content. It can be applied to any online content that deserves to be paid for. We will launch across a broader range of subjects and media types, including magazines, video, podcasts and potentially even music in the next few months.

Thank you.

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