The Publisher’s Pandemic Roundtable Meets with Dominic Young
Soon everyone will be going their separate ways for holidays and vacations, but our Publisher’s Pandemic Roundtable—Joe Berger, Bo Sacks, Samir Husni, Sherin Pierce, and me—took the opportunity to get together with Dominic Young, the UK-based founder of Axate.
Dominic introduced Axate as, quite simply, the easiest way for publishers to make money from their sites. With a background in newspapers, having gotten his start at News Corp, Dominic came away with the conviction that subscriptions as a model would never take a publisher far enough. The difficulty with the subscription model, in his analysis, is that a publisher will always hit a ceiling and stop growing. With all subscription models, you sign people up in order of reluctance. Thus, over time it gets harder and harder to grow subscriptions, and everyone ends up discounting. What happens is that, as you grow your subscription numbers, your revenue goes down.
Coupled with this, publishers have found that advertising is no longer a dependable revenue stream. And there continue to be many publishers who struggle to monetize their presence online, where free content has long been an issue.
The solution, many acknowledge, is for publishers to train their audiences to pay for content. Yet, practically, that move has been difficult and chancy for many publishers. Why would that be—and what might be the solution?
Dominic: The reality that publishers are coming up against, as they work to strengthen their brands and convert their readers to paid, is that almost no one has an exclusive relationship with a single news brand.
Setting up a paywall, selling online subscriptions, asking for that kind of commitment—it’s a very high bar for readers. The psychology of spending money is interesting. You often will find people spending more in newsstand purchases, by a significant margin, than they would if they were to buy a subscription and only read the issues they wanted. That’s because newsstand purchases are spontaneous, impulsive and low cost. It’s one of the reasons subscriptions are often so low priced. The cost seems more when you make a commitment, and many people are averse to making those commitments. The value of recurring revenue makes up for the low price, of course, but it has always been the case that casual customers make up a large proportion of readers.
Online it becomes even more complex. We hear that content is king, but content changes every day—and audience choices change along with it. Almost nobody returns to the same piece of news content multiple times; if they come back it’s your brand and your product, and the promise that today’s content will satisfy them, that brings them. Or they’re a near-worthless one-and-done visitor who barely notices your brand.
Joe: So how do we make consumer payment the default position with digital media?
Dominic: Axate is designed to address these issues. We distill the complexity out of them and come down to one simple thing: a very small paywall that doesn’t demand commitment. In doing so, we take out one of the biggest barriers subscription paywalls create. We make it easy to step over through micro payments or casual payments.
Linda: That first micropayment is the first barrier, that first, say, 99 cents. Once that wall has been broken, after that every time it gets easier.
Dominic: That’s right. My theory is that anyone will buy anything as long as the cost is less than the desire. The cost includes money, and it also includes commitment and hassle. The more hassle there is, the more likely you are to omit the purchase. Axate solves that by acting as a single micro-payment source across multiple media products and making the transaction seamless and effortless. It can be spontaneous and impulsive again.
Most people’s media journeys touch on a very wide range of product. If they are constantly asked to make commitments, or even just keep registering again and again, they will give up on it. Axate registration only happens once, then works like a single sign-in on every participating site. It also gives people the option of waiving payment re-approval. Most users choose not to be asked each time if they approve a payment, because each publisher sets a limit on how much they will charge readers. The more you read the better value you get, so publishers and readers alike can focus on the product, not the payment.
Bo: Do you have an online store front for your members?
Dominic: People encounter Axate within the publisher’s own environment. For participating publishers it’s a pay-as-you-go paywall. The reader joins when they encounter it at the publisher’s paywall. Publishers can then have a widget on their site that offers genuinely useful content elsewhere.
Bo: Directing them to other sites?
Dominic: They don’t have to take that option. But in the history of the news industry, publishers never insisted we be the only one in the shop. Yet we do it all the time on the internet and wonder why only a few people ever subscribe. The truth is people will move around between brands and trying to prevent them from doing so doesn’t benefit anyone – other, perhaps, than the social media brands who fill that gap for readers.
Joe: It is remarkable how many people are Twitter followers of a brand versus the number of paid subscribers to that same brand.
Dominic: The challenge for the industry is to build up a critical mass through creating a marketplace where what benefits one will also benefit others. Building a network is hard. That’s what costs publishers so many millions of dollars. Getting to the sort of scale that social media platforms have costs billions. Nobody in the news media is big enough, or has an extensive enough product, to build that sort of scale on their own. It’s what’s kept the news media in little pockets of success with many just struggling.
But if the publishing industry starts to behave like an industry again, they already have access to a network that talks to people at population-scale every day. If, as an industry, we begin to work together, and shift our challenge from “acquiring” readers to satisfying them more and more often, we will put more and better stock in front of people. Because we’ll be monetizing activity directly, and we will only be able to do so by producing and pricing products which do not overwhelm people’s desire for them, we’ll focus a lot of our efforts on increasing that desire. With better products.
Samir: how do you distinguish between experience making, which is what a great publisher does, and just being a content provider?
Dominic: I am trying to set up a model that encourages more consumption. It then is up to the publishers to create a reader-friendly environment. Success will, and should, be about creating great and habit-forming experiences which meet user needs. Being a content provider has always been a great and important business – just think about Associated Press – but turning ephemeral pieces of content into enduring media brands is what publishers have always done. We want to create a market that doesn’t have perverse incentives that end up destroying it and which is built around the only two stakeholders who count, publishers and readers. The publisher then must offer something the customer will actually like, including the advertising.Joe: It will simplify a lot. Legacy newspapers are ridiculously difficult to use and read. Axate is a true neutral internet platform.
Dominic: It’s a foundation stone on which lots can be built. It’s the one simple thing that unlocks opportunities. It’s helpful for publishers of all sizes and all levels of digital participation. Every reader is available to every publisher – new and old – who can attract their attention. If all of your online content is free, for example, this is a great way to start charging. It’s an easy way to step into it, and allows you to start to take advantage of a network of users.
Linda: I like the simplicity of it—that it happens on the level of the publisher, making it easier for their audience to move into a paid environment.
Dominic: I am passionate about this. If we can get this rolling we can really solve things. It requires no money upfront, no investment to participate. There is no reason not to give it a try.
by Linda Ruth
This originally appeared on Bo Sacks daily newsletter and is re-published with kind permission. You can subscribe to Bo’s e-newsletter here.