There's no sustainable biz model for media worldwide: Axate's Dominic Young

Covid has proven the vulnerability of ad revenues. The problem with subscription is that it requires readers to make a commitment, says Young

Dominic Young, 52, has spent most his professional life with publishing companies (News International, News Corp). Two years ago he founded and launched Axate, a casual payment tool that is helping publishers in the UK switch to paid subscriptions. Since the Indian publishing industry is getting serious about subscription revenues, Vanita Kohli-Khandekar spoke to Young in London via Zoom. Edited excerpts:

 

What is Axate all about?

 

Axate is a way to pay for online media. Once you’ve registered and uploaded some money to your Axate “wallet”, you can use it to pay per article you access. The wallet works across different brands. Then depending on whatever price the publisher has set, from a few pence to pounds, is deducted from your wallet if you click to read a story. Again depending on the brand after a few articles, the rest of the day or week will be free. Your balance will reflect how much is left. Axate follows you (across member publications) so you only ever have to sign up once. 

 

What is the thinking behind it?

 

There is no sustainable business model for the media worldwide. Covid has proven the vulnerability of ad revenues. The problem with subscription is that it requires readers to make a commitment. And they don’t want to make multiple commitments or to pay for similar articles. Therefore, subscription works for specialists like The New York Times with high-quality, standout content. It is hard to be a reader’s number two title in a subscription-based market and harder to be number three or four. Axate offers middle ground. Most people don’t object to paying but don’t want to do it for things where the price or process is wrong. The plan has to reward you for coming back, encourage you to form a habit. But if the process is too involved or expensive then you lose the user.

 

So it is a payment system …

 

It is a casual payment tool; it creates an increasing opportunity for the media as more customers and platforms get in. Its real effects will come into play once there is a large enough network; because you can link to related articles across the media without damaging your own opportunity, making a better experience for readers. There is the question of whether people will pay. Our experience is that they will if the produce justifies the price and commitment being asked.

 

Are you working with Indian publishers?

 

We have started talking to publishers in India — to free publishers who want to move to subscription and others who want more from subscription. What happened to publishers in the UK and the US is happening to Indian publishers, later but faster. Readers move online and ad revenues don’t reliably follow them.

 

What has the experience been like?

 

Currently we have 30 British publications (using Axate). It all depends on the newspaper. If it is a free newspaper and you putting a price tag on it for the first time, then the challenge is to explain to readers what you’re doing and why it’s a good deal for them. Core readers are usually supportive and that support grows over time. Also depends on the focus of the newspaper. We work with a lot of local papers and find stories about local crime and local sporting teams get a response (people are willing to pay for these). But you need to do it cautiously. On a site with subscription there is often an uptick in subscription sign-up as well because users not ready to subscribe begin by accessing via Axate on a “pay as you go” basis.

 

Of the 30 publications you have, how many are free? How does Axate sit with an existing subscription service?

 

A majority of the publications were previously free. They needed a reader-revenue model but knew subscription wouldn’t work for them. Many are very local or specialised publications. For example, we have Popbitch (a pop music gossip site), Cornwall Reports, a specialist boxing sports site, another one focused on cricket, some local papers and magazines published by larger groups. Four-five publications use it, along with subscription. It allows readers to get to know the publication before they decide if they want to subscribe. If a subscriber cancels, you can do new things to keep them reading. For example, you could give him an Axate wallet with, say, £5 to keep reading. Some sites want to target Axate for readers unlikely to shift to subscription — diaspora readers around the world, for example.

 

What are the big learnings?

 

The inertia of the media, even though the current model is not working, is sometimes surprising. Decades of internet challenges have taken their toll on confidence and energy levels. The relevance or the acceptance of the solution is not questioned but they want to see others try it.

 

Your impressions of where the publishing world is currently.

 

Newspapers allowed the internet to determine how their relationship with customers would play out online. We don’t need to pay homage to the accepted ideology of the internet.

 

We can define it. The network effects are scary (that is evident from the internet) but the media has a huge network of its own. We should not try to reclaim the ad market or take on Google and Facebook. Instead build a product that delights users. If a network forms — of lots of publishers and consumers using the tool — everyone succeeds by pleasing the consumer.