Neon Tommy editor slams Blendle and micropayments on Medium; Blendle hits back

April 9, 2015
Category: Uncategorized

Medium

David Carr and Walter Isaacson have famously praised the “iTunes for news” micropayment model as an ambitious and novel way to keep publishing long-form journalism and keep the money flowing in. But Will Federman, a student at the USC Annenberg School for Communication and Journalism and the editor in chief of its website Neon Tommy, thinks it’s just another antiquated notion that is already doomed to failure.

Writing in Medium on Monday, Federman cited the example of Blendle, the Dutch startup that aggregates stories from a variety of news outlets, lets you get a glimpse of each article and offers to let you read the full story on your tablet for mere pennies. The New York Times, The Washington Post and The Wall Street Journal have all signed on to the service, leading to a lot of buzz about its potential. But Federman argued that Blendle has only managed to convince 1.2 percent of the population it serves to sign up, and that only 20 percent of those have ever actually paid money to read a story:

I’m not sure why people are excited about an overseas venture that doesn’t seem to be much more than an inconsequential revenue stream for a handful of papers with established audiences.

The sad fact, Federman continued, is that the value of an individual article in the marketplace is either zero or getting there very fast. First, consumers have to choose whether or not to pay for a story, and that alone is an inconvenience they won’t opt for while speeding through a stream of never-ending news items. In addition, most consumers won’t pay for news stories that might challenge their politics or values because it’s simply too much work to have to reconsider their preconceived notions about the world.

Finally, Federman pointed out that even iTunes isn’t what it used to be. Noting that song download revenue dropped 13 percent from 2013 to 2014, while streaming rose 28 percent, Federman claimed that the micropayment model in music is crashing:

The pay-per-song model isn’t even the preferred business model for music consumers anymore. People are no longer paying per song, they’re paying for a license to listen to every song on every device. The music industry, like the news industry, is in a free fall. Why are folks so keen on this idea again?

But Alexander Klöpping, the co-founder of Blendle, took umbrage at Federman’s suggestion that his startup is just an example of thinking that is already past its prime. The key to making micropayments work, he argued in a retort at Medium, is maximizing a reader’s convenience — by offering one platform that provides a variety of stories from a variety of sources, then making the payment process as easy as one click.

If you look at the idea of Blendle, I admit, it sounds pretty bad. Having to deal with paying for every article just sounds pretty horrible. Especially in times of Spotify. The thing is: Blendle is not about the idea. Or even the model of micro payments. It’s about the execution: offering completely frictionless micro payments.

After wryly noting that Blendle has done pretty well for having been in business for only 10 months, Klöpping claimed that with Blendle, young people who have never considered paying money for a story have suddenly discovered that they don’t mind putting down a little cash if it means they get a good read.

My friends have never paid for music and movies, until Spotify and Netflix. And with Blendle, they’re paying for journalism, often for the first time in their lives.