Publishers know that diversified revenue streams are the key to thriving in the current market—there’s more to monetization than ads. Still, the prospect of paid subscriptions leaves many a publisher wary—many can’t see themselves building and managing New York Times-style paywalls, let alone driving enough subscription revenue to justify the cost.
But subscription offerings, including to groups of publishers, have gotten more interesting—particularly when it comes to content monetization. According to The Verge, Mozilla is testing out a $5-per-month subscription package that allows for ad-free browsing (as well as audio readouts and cross-platform synchronization) of BuzzFeed, Vox Media properties, G/O Media, and more.
Powering this service is Scroll—I caught up with founder and CEO Tony Haile, whom I recognized from his Chartbeat days, to hear more about his company’s unique offering and find out just how it supposedly pays publishers more than advertising.
GAVIN DUNAWAY: Can you give us an idea of how Scroll works for the consumer? Is it a group subscription to numerous publishers for a fee?
TONY HAILE: Scroll is a membership that gives you a range of benefits, the main one being a fast, private ad-free experience on participating sites. You don’t have to change your behavior—it just automatically works across all the surfaces you consume content on.
Scroll doesn’t get you past paywalls—that’s way more of an edge case than publishers would like to think. It simply ensures that across desktop and mobile, no matter how you’re accessing these sites, you get an experience that makes it feel like the Internet was built for you, not something done to you. In return for delivering that experience, publishers make more money than if they had served ads to that user. Everyone wins.
GD: Scroll claims to pay publishers more than advertising, a bold claim. What you got to back that up?
TH: Depressingly, it’s not a bold claim at all. If you take the top 80 largest publishing conglomerates in the US, they make about $7 billion in digital advertising from around 234 million uniques. That’s an aggregated monthly average revenue per user of around $2.50. When you apply subscription mechanics to ad economics, the problem of beating opportunity cost in aggregate is easy.
The hard part is finding the right mechanism to ensure that you can beat the opportunity cost of ad revenue when you’re dealing with high RPM variance between publishers and a Pareto curve of customer value within a publisher where different cohorts might sign up at different rates.
Luckily we’ve had the opportunity to run our model against more than 60 publishers and hundreds of sites and tweak it until we got the recipe right. Every publisher right now on Scroll is easily beating their Ad ARPUs and we project at a mature network state they’ll see a consistent 40% lift.
GD: Why else will publishers be interested in working with you?
TH: If they believe the future is going to be building high brand affinity and loyalty with their customer base, then finding an economically viable way to deliver an experience that encourages loyalty and brand affinity is probably pretty important to that.
I don’t think for one second that advertising is going away or that it won’t represent a major revenue model, but it’s clear we have users who are cool with ads and users who are not. As an industry, we should probably have a business model for both.
GD: Why the team-up with Mozilla—what’s in it for them?
TH: Mozilla has been a great partner as we explore how we might best work together. They care about a user-centric open web where consumers can get the best possible web experience without compromising how we fund the journalism that is vital to a functioning democracy. That combination of mission alignment and commitment to an ever improving consumer experience is what brought the two companies together.