mediaXchange 2016 Panel: Will Micropayments Go Macro?

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  • 04.19.2016

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Blendle is hoping to change micro-payments with its Spotify-like platform that encourages readers to pay a nominal fee for each article they read. The platform serves up premium content from a variety of well-known publishers while maintaining the publication’s unique brand.Alexander Klopping headshot

Blendle launched in The Netherlands two years ago with content from about 30 newspapers and magazines, said Blendle Co-founder Alexander Klöpping. The platform launched last September in Germany with more than 100 publishers and it began a U.S. beta test about two weeks ago.

“Users are willing to pay for great content,” Klöpping said during a Monday morning mediaXchange session “Pay-Per-Article: Will Micropayments Go Macro?” moderated by NAA President and CEO David Chavern.

Unlike your typical pay wall that gives away the first five or six articles and then asks readers to pay for an online subscription, Blendle gives anyone who signs up for the platform $2.50 to spend on articles. Publishers set prices for the content, which range from 10 cents and 50 cents for newspaper articles all the way up to $1 for long-form articles from newspapers and magazines. Publishers retain 70 percent of the fees for each article and, if a reader isn’t satisfied with an article, they can ask for a refund.

The difference between micropayments and a paywall, said Klöpping, is the reader gets accustom to paying for an article before reading it. About one in five users will add money to their account when their $2.50 credit runs out, he said. As soon as a reader opens an article, the micropayment is made. There are no clunky screens or prompts in between, Klöpping said.

Klöpping said there isn’t enough experimentation with micropayments in the United States. “There is still a tendency to give away everything, even the crowned jewels,” he said. “

Blendle has more than 650,000 registered users in Holland and Germany, and most are younger than 35, Klöpping said. Like Spotify, most consumers didn’t know they were missing this product until they started using it, he said. “Although you can get every song for free on YouTube, users pay for Spotify.”

One of the user benefits is the content curation. “In the sea of content, where do you find journalism?” Klöpping asks. Users don’t want to go to one particular site anymore but they still value some brands, he said. They’re also finding they can’t depend on Facebook and Twitter for in-depth news.

Blendle hires editors who go through all the magazines and newspapers on its platform to curate content, Klöpping said. A user’s newsfeed is based on what human editors select, an algorithm and what the user shares on social media.

Refunds are rare, Klöpping said, especially for quality publications such as The Wall Street Journal, which has only a 2 percent refund rate. The average refund rate is about 10 percent. Gossip magazines in Holland have about a 50 percent rate, which Klöpping attributes to click-bait headlines. “People get angry if the headline promises something they don’t deliver on,” he said.

Readers typically don’t pay for breaking news stories, Klöpping said. Opinion pieces, original reporting and long-form journalism sell best on Blendle.

Klöpping admits it takes time a build an audience, partly because Blendle doesn’t market its product to users and instead relies on users recommending it to a friend. But, it can be profitable. Last year, he said, the most popular single article in Holland made 30,000 Euros in micropayments.

It will always be a mix of subscriptions, advertising and micro-payments, but Klöpping says he is interested in discovering the perfect ratio.

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