21 April 2016
"Nobody wants to pay for news. But many people want to pay for great journalism." This is the opinion of Marten Blankesteijn, co-founder of the Dutch pay-per-story news platform, Blendle (which counts among its shareholders The New York Times and Axel Springer). The platform hasn't stopped growing since its launch. After a first expansion in Germany and the Netherlands, it is now available in the US, a media landscape that he says is vastly different from the European one.
In this interview, Marten talks about Blendle's adventure since the first launch and his expectations for the future. He also tells us what Blendle's role can be in a publisher's business plan: "For some publishers we're just a platform that brings them extra money. But more and more publishers are working together with us to make it much bigger than that."
Blendle is a news platform for premium journalism where readers pay to access individual articles from major newspapers and magazines. How is it generally doing business wise? How has it grown since its launch?
We're doing well! We're growing by double digits every month in both countries. In the Netherlands we're celebrating our second anniversary this month, so there, after 24 months of double digit growth, the revenue is pretty awesome. In Germany we have just started, so in absolute numbers it's right now lower than the Dutch revenue, but if it continues to grow like this it's going to be even better than the Dutch version.
Have the benefits in the Netherlands reached the 10% or more? When do you expect profits?
We don't aim for short-term profitability. We could be profitable, if we would just continue with a small team, but we'd rather invest heavily in all the ideas we have to monetize great journalism. Right now a big team is working on paywall technology for publishers – for Blendle we've developed a paywall with much higher conversion than the average publisher paywall, and now we've made our technology ready for integration on websites of newspapers and magazines.
The first experiments show that newspapers and magazines sell many more subscriptions [with this integration]. And we're also building whitelabel apps that publishers can use for their own brands, and our machine learners have made a recommendation engine. Like Spotify's Discover Weekly, but now for journalism. Together with publishers, we're figuring out how we can make journalism as addictive as possible, and how we can make paying for it as easy as possible. We're getting better at that every month.
Photograph courtesy of Blendle
How is the platform performing in Germany? In this article on Medium you say that it’s growing even faster there than it is at home.
Like I said – we're growing with double digits every month. Sometimes 50%, sometimes 10%, mostly somewhere in between. If that continues for a year or so – like it did in the Netherlands – it would be really nice.
When do you expect to break even in Germany and France? What are your goals?
We're not live in France yet. In Germany we don't focus too much on our costs. For example, we recently hired two people who will help us with user growth through marketing and partnerships. In the long term we expect [hiring] to be more profitable than cutting down costs right now.
Earlier in March, you launched the US version of Blendle. Can you tell us what have been the first reactions? What's different from the other versions? What has been challenging?
The American media landscape is vastly different from Europe. In America there's much more great journalism freely available but, on the other hand, most publishers are suffering from declining ad revenue and the rise of ad blockers. So, in the US we see that everyone is looking for some kind of reader revenue. Right now there's no difference between our three versions, but we're closely following the behaviour of our American users and asking them what they think of Blendle. If something should change, we'll change it.
Millennials are not an easy audience to please. What are they interested in? Are they willing to pay for news?
No, nobody wants to pay for news. But many people want to pay for great journalism: background pieces, analysis, columns, big interviews. The stuff that makes you smarter.
At the upcoming GEN Summit in Vienna you will talk about the personalisation of the news. How can this trend become an opportunity for news outlets?
There are newspapers with over 100 articles per day. Especially for younger people that's too much: it takes half an hour to even browse through all the pages. By understanding every user, you can give every person a personalised newspaper, website or newsletter. That way every reader will read more stories and spend more time with your brand, and hence stay a subscriber or become one. Of course we continue to surprise readers, because that's an important aspect of newspapers: that you regularly read about something you didn't know you were interested in.
Do you see platforms like Apple News or Facebook Instant Articles as competitors? What do you think about the rise of platforms as publishers? What are the pros and cons of this trend for news outlets?
I like everything that aims to get people to read quality journalism. Personally I hate ads, and that's the business model of Facebook and Apple, so it wouldn't be my choice. But if it generates money for publishers so they can pay more journalists, it's awesome. I don't think we're competitors, because we try to get readers to pay instead of advertisers. And I think Netflix is a bigger competitor: the more time people watch great shows, the less time they read journalism.
Photograph courtesy of Blendle
Do you think that publishers do really find an interest in the Blendle marketplace or do they consider it only a niche? Is it “just another source of income”?
It can be many things. For some publishers we're just a platform that brings them extra money. Sometimes a bit, sometimes a lot. But more and more publishers are working together with us to make it much bigger than that: we help them sell subscriptions, we make their apps, we help them with recommendations for their subscribers. Those publishers usually have the highest revenue.
Blendle always claimed that it “has been created by journalists who fervently defend quality journalism and believe that great editorial must be paid for.” Are the great journalism pieces the most popular articles on Blendle? What are the bestsellers?
In 2014, the most read article was a beautiful reportage at the crash site of the MH17 plane. Last year, it was a 6,000 word interview with a famous Dutch writer who committed suicide a couple of days after the interview. I think we made 30,000 euros with just that article. So those are examples of in-depth journalism that worked well. But of course Blendle users are humans too, so sometimes articles about health or sports or comedians do well too.
How do you select the content you offer in your newsletter? How many subscribers do you have?
Hundreds of thousands receive our newsletter with the best articles every day, and many of them open an article regularly. We have editors that read everything and make a selection and our publisher partners help us by telling us what they think their best stories are.
What's the percentage of use of the "money-back" button?
In general it's between 5 and 10%.
One of Blendle's main focuses is to give its customers a great user experience. What were your principles and guidelines in this regard? How do you refine your user experience?
We never wanted to start a company, we just wanted to have Blendle. And because nobody else was building it, we thought: let's do it ourselves. And that's what we did, we just built it to be able to use it. With everything we do, we ask ourselves: is this how we want to use it? The money-back feature is a good example. In a beta version of Blendle, and every now and then I felt screwed because I had paid for an article that I didn't like that much in the end. So then I said: I want to be able to get my money back. Publishers thought I was crazy, but they gave it a shot and now everybody agrees that it's a good thing that increases revenue, because it makes it easier to buy an article. That's what we do with every screen in Blendle.
What do you think of the European startup landscape? What advice would you give to a startupper in 2016?
Don't do it unless you're really, really motivated. Having a company sounds fun, but it's crazy. I haven't been on holiday in four years now and I work every weekend, because there's so much to do. And most of it isn't fun at all. I can motivate myself for that because I really like what we make and I really like journalism. But I see a lot of people starting a company because they think it's an easy way to make money. With that motivation I don't think you'll get anywhere.
Marten Blankestejin will speak at the sixth annual GEN Summit in Vienna, Austria, next 16 June, about The Personlisation of the news: The Netflix Effect. With him will discuss Andrew Jack from the Financial Times, Hiromi Honishi from the Asahi Shimbun and Alina Zielina from NZZ. Book your tickets here.