Netflix for news? Now at 500,000 subscribers, Scribd is training its sights on journalism
By now, the game plan is all-too familiar: Build an enormous library of content, then charge people a small monthly fee for access to it. Spotify did it with music. Netflix did it with video. Now Scribd, a 10-year-old startup that counts more than a half-million subscribers, wants to apply that same formula to news.
This morning, Scribd announced that it has reached agreements with newspapers including The New York Times, The Wall Street Journal, The Guardian, Financial Times and newsrooms including NPR and ProPublica. The deals allow Scribd to license news content from those publishers in much the same way that Netflix buys the rights to movies, television shows and stand-up specials. Readers who pay Scribd's $8.99 per month subscription fee can then read to their heart's content on Android, iPhone and web browsers.
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The decision to license news content is based on the theory that Scribd's users are interested in finding content that's related to their interests, said Scribd CEO Trip Adler. The company's library already contains documents, books and magazines, and he thinks readers will switch between them with equal abandon so long as each title is relevant to their interests.
"We're offering news together with magazines, books and all the user-generated content," Adler said. "So the experience might be to read books, but in between the two, when you don't have enough time to read a full book, you can read a few news articles. Or maybe you can read a book but there's a news article that's applied to what you're reading."
The biggest potential flaw in the Netflix analogy, of course, is that news is ephemeral by nature, without the lasting appeal of, say, a Netflix stand-up special or the first season of "The West Wing." But Adler says Scribd is focusing on evergreen content published by news organizations, the kind that readers will come back to read time and again.
Scribd offers publishers a variety of licensing agreements, Adler said. The terms vary per news organization but include a fixed-fee license for a set of each publisher's content, or a payment each time an article is read. With $50 million in annual revenue, Adler says Scribd is in a position to funnel some of that cash back to publishers.
"It's true that people would prefer free content over paid content," Adler said. "But that's not great for the industry, because if people pay for content, that brings more money to authors and journalists. So, if we can create an ecosystem where people pay for content and that money is passed back to authors and journalists, that's the thing the world needs."
Critically, all of the reading happens within Scribd's ad-free environment, so publishers can't monetize Scribd's impressions (Adler says the company has 100 million monthly users). But he says that readers and publishers alike will benefit from this approach, which revolves around gathering together "premium content that's never been aggregated before" and building a pleasant experience around it.
Scribd isn't the only company bundling together news content from different publishers in the hopes of monetizing it en masse. The Dutch micropayments startup Blendle has also inked deals with several of the publishers Scribd has reached agreements with. But Adler says it's easier to subscribe once than it is to pay individually for dozens of articles, and he says his growing subscriber base bears that out. And other news readers, like Flipboard and Apple News, don't allow for subscriptions, he said.
"We have evidence it's working," Adler said. "We have 500,000 paying subscribers. It's growing pretty nicely. We think that by continuing to aggregate a really unique set of premium content that's never been aggregated before and build a really great product around it, we can get people to start paying for content."