How Zette plans to let people access paywall news with a single monthly subscription • TechCrunch

How Zette plans to let people access paywall news with a single monthly subscription • TechCrunch

A new startup wants to help online media make money by making it easier for consumers to access paywalled content without being locked into multiple subscriptions.

Demoed as part of the Battlefield 200 cohort at TC Disrupt this week, Zette is trying to achieve something that others have tried before. Since the dawn of time (well, at least since the advent of the web), digital media companies have sought new ways to make money. While traditional newspapers and magazines’ path to monetization was relatively straight forward, insofar as they charged money for a physical product (usually filled with paid advertising), the online sphere has had to flirt with a multitude of models, from advertising and events, to — increasingly , it seems, paywalls.

But while paywalls promise clear and predictable income, it is a difficult model to scale outside the large outlets such as e.g. New York Times. People don’t want (or can’t afford) dozens of subscriptions, but that doesn’t mean they aren’t willing to pay something to access individual articles if given the opportunity to do so.

There are already subscription-based services like Apple News+ that aggregate stories from hundreds of publications, and pay-per-article options like Blendle that let publications charge microtransactions to read one-off articles. Zette sits somewhere in the middle, charging a $9.99 monthly subscription for access to 30 articles from its partner publications, though it also operates different pricing plans for those looking to purchase more credits. However, if the user does not use their credits in a given month, this will not carry over to the next month – everything will be reset.

The story so far

Zette was founded out of San Francisco in 2020 by former Forbes reporter Yehong Zhu, and after raising about $1.7 million in seed funding last year, the company is officially entering private beta this week for waitlist members, ahead of an expected public launch early next year. year. So far, Zette has signed agreements with New Scientist, Forbes, McLatchy, Boone Newspapers and Haaretz, with plans to strengthen this with “hundreds” more in the coming year.

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So how does it all work? Well, the user downloads and installs a browser extension, signs up for a Zette account and subscription, and when Zette detects a paywall on a partner site, it invites the user to unlock the article by paying a single credit.

Get into action

The company said it is also considering allowing users to roll over some of their credits, but with a time limit on when they must be used.

Perhaps the crucial point worth noting here is that, unlike something like Apple News+, rather than serving as an aggregator, Zette’s pitch to publishers is that it enables them to retain relationships with readers, given that their content remains on their own site.

“Publishers control the display and messaging of their content, unlike Apple News’ ecosystem,” Zhu said. “Readers can open an article from anywhere — Twitter, Facebook, Google, iMessage, Slack, the news sites themselves — and still use Zette to unlock the article.”

Zette will initially focus exclusively on the US market, but it has ambitions to launch in international markets as well.

“We are an American company that focuses on American readers first,” Zhu said. “We’re investing heavily in marketing and growth, especially when it comes to getting younger readers — Gen-Zs and millennials — on board.”

Business model

There might be some bugs with this type of model. The advantage of subscribing to a publication directly is that while you may not like everything in it, you will probably find some articles that you do like. With a subscription-based, pay-per-article model, you don’t know if you’re going to like it until you commit to the cause. On top of that, you may not stumble upon 30 paywall articles in any given month that you want to read. So for a monthly payment of $10, it’s possible that some subscribers simply won’t get value out of it.

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There are some elements of Blendle’s model that make more sense. There’s less pressure on the reader to consume a certain number of monthly articles, as it’s built around single microtransactions – put money in your account and use it whenever you want. But while it may be a more consumer-friendly model, it does not benefit the publication or the company behind the technology. According to Zhu, this type of business model only encourages “sporadic use rather than sustained readership,” which ultimately leads to higher churn and poor monetization.

“We also believe that consumers tend not to enjoy the experience of having to put a dollar and cent value on every article they want to read,” Zhu continued. “This makes them feel ‘nickel and dime-d’. For this reason, Zette took inspiration from video games, where you buy bundles of ‘virtual coins’ in advance for in-app purchases: we replace money with credits to distance the customer from the feeling of making a purchase. This makes each transaction low-friction, and also makes it easier to top up credits each month. We believe that a microtransaction-like experience on the front end, recurring revenue on the back end, is the best of both worlds.”

Also, while there are advantages to a traditional news subscription, vis-à-vis readers can consume everything from sports and politics in a single publication, not everyone wants to read a newspaper cover to cover.

“Traditional news subscriptions serve one audience very well: heavy readers,” Zhu said. “These are readers who hit paywalls often enough and often enough that they decide to become paying patrons of a single outlet. The majority of browsers are light readers: they browse for news, they only want to read one article at a time, so they can’t justify the cost and inconvenience of signing up for a subscription, they’re relatively brand agnostic, they’re price sensitive, and they’re largely looking for a variety of content, rather than just getting all the news from one publication.”

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In addition to the browser extension, Zette is also working on a mobile app, which should be ready when Zette opens to the public in early 2023.

For now, however, Zette said it has begun opening access to a small percentage of users from the waitlist who will have free access for the rest of this year, but in return will be tasked with providing feedback to the company on ways to improve the product.

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