Blendle, the Dutch "iTunes for news," has landed new investments from Financial Times owner Nikkei and Amsterdam-based investment fund INKEF Capital a year after its debut in the United States.
"The partnership between Nikkei and the Financial Times is one of the most exciting publishing initiatives worldwide," Blendle founder Alexander Klöpping said in a statement. "The New York Times and Axel Springer are shareholders in Blendle already, and it makes me very proud that a third innovative publisher, as well as tech investor INKEF Capital, now put their weight behind our company."
The amount of the investments was not disclosed.
Blendle launched with much fanfare in the United States last March with partners including The New York Times, Wall Street Journal and The Washington Post. Overall, there are 22 publishers available on the U.S. platform, and Blendle is working to bring more aboard, said Jessica Best, head of editorial at Blendle.
Heralded by Politico as “the Dutch tech whiz who could save journalism,” Klopping is a evangelist for micropayments, a business model whereby readers pay a small amount of money for each story they consume.
Although micropayments have caught on in Europe, where readers have grown accustomed to paying for content, Blendle’s launch in the United States regarded with some uncertainty among media business experts who noted that U.S. readers are used to consuming journalism for free.
So, how’s Blendle doing in the U.S.? A year in, Blendle says micropayment methods remain a viable business model in journalism. Currently, Blendle U.S. has over 60,000 users in comparison to the company's 1 million users worldwide.
But Blendle, like the rest of the journalism world, is looking for additional monetization strategies. Blendle Premium, a relatively new service, offers users a personalized selection of 20 articles a day for €9.99 a month.
“We debuted Blendle Premium because a subscription product was something many of our users consistently asked for," Best said. So, alongside micropayments, Blendle Premium offers those users another way to pay for content."
Once Blendle Premium has been tested in the Netherlands, Blendle will consider expanding the feature, she said.
Blendle’s decision to offer users a series of options is in line with a strategy outlined by Rasmus Kleis Nielson, director of research at the Reuters Institute of Journalism.
During a panel discussion at the European Parliament, Nielson said there are four keys to make online journalism successful: Delivering outstanding content, focusing on diverse revenue sources, using a lean cost structure and having a portfolio of different activities.
Blendle fulfils all four of these requirements to some extent: It offers a variety of different articles from different sources and provides access through different payment methods.
The lean cost structure is being provided, among other factors, by their specific micropayment system: Blendle users have a virtual wallet, which they top up, starting at $5 at a time. Each time they buy an article, the micropayment is deducted from their wallets. Blendle only pays transaction costs when a reaches a certain amount of purchases, rather than for every individual micropayment. The only factor that might still be unfulfilled: Blendle mostly offers print articles and barely any multimedia access.
But the financing of journalism through advertisement comes with a cost: “An ad-based journalism has a different customer in mind than the one that the journalist has to have at heart, which is civil society,” Rob Wijnberg, Cofounder of De Correspondent, explained during the panel discussion.
De Correspondent is a Dutch media news platform, which was launched after raising more than $1.07 million from crowdfunding in only eight days.
Ad-blockers, which are stripping publishers of revenue, also make micropayments more attractive. According to a report from BI Intelligence, Ad-blockers are used by roughly 16 percent of U.S. consumers and will keep rising.
Micropayment systems may therefore be a different way to bring in much-needed revenue. At least for Blendle, the strategy seems to pay off.
“We're really happy with the numbers from the U.S. beta, Best said. "We're building a dedicated U.S. community that wants to pay for quality journalism in a way that works for them."