Making it easier for consumers to access paywalled content without being locked in to multiple subscriptions is a goal of a new startup.
Zette is trying to achieve something that has been tried before by other people. Digital media businesses have been looking for new ways to make money since the dawn of the internet. The online sphere has had to flirt with a variety of models, from advertising and events to paywalls, in order to get to the point of being able to monetize their website.
It is difficult to scale a paywall outside of the New York Times. If people are given the option to pay for individual articles, that doesn't mean they won't subscribe to more than one.
Apple News+, which bundles stories from hundreds of publications, is one of the subscription-based services. Zette charges a monthly subscription for access to 30 articles from its partner publications and is experimenting with different pricing plans for those who want to purchase more credits. Everything resets if the user doesn't consume their credits in a month.
Zette was founded out of San Francisco in 2020 by former Forbes reporter Yehong Zhu, and after raising some $1.7 million in seed funding last year, the company is officially arriving in private alpha this week for members of the waitlist. With plans to bolster this by hundreds of more in the coming year, Zette has inked deals with a number of publications.
What does it all do? When Zette finds a paywall on a partner website, it invites the user to unlock the article by paying a single credit, if they download and install a browser extension.
The image is titled "Zette in action."
The company is considering allowing users to roll over some of their credits with a time limit on when they need to use them.
Zette's pitch to publishers is that it enables them to retain relationships with their readers, given that their content remains on their own website.
Publishers are in charge of the display and messaging of their content. Readers can open an article from a variety of places, and still use Zette to open the article.
Zette wants to launch in international markets too, but it will only focus on the U.S. market initially.
The company is focused on U.S. readers. We are spending a lot of money on marketing and growth in order to get younger readers on board.
Some flaws are possible with this model. If you subscribe to a publication directly, you will get some articles that you like, even if you don't like everything in it. You don't know if you'll like it before you commit credits to the cause. It's possible that you won't find 30 paywalled articles in a given month that you want to read. It is possible that some people won't get value from a $10 monthly payment.
Some of Blendle's model makes more sense. The reader doesn't have to consume a set number of articles as it's built around single microtransactions. That model doesn't benefit the publication or the company behind the technology This type of business model leads to higher Churn and poor monetization according to Zhu.
Consumers don't like having to put a dollar and cents value on every article they read. They feelnickel and dimed. Zette took inspiration from video games, where you buy bundles of virtual coins up front for in-app purchases. It's easy to top up on credits every month because of this. The best of both worlds are the microtransactions-like experience on the front end and recurring revenue on the back end.
Not everyone wants to read a newspaper cover to cover and there are benefits to a traditional news subscription.
Heavy readers are best served by traditional news subscriptions. Readers who hit paywalls often enough decide to become paying patrons of one outlet. The majority of online readers are light readers, they only want to read one article at a time so they can't justify the cost and hassle of signing up for a subscription.
Zette is working on a mobile app which should be ready by the time Zette opens to the public.
Zette said it has started opening access to a small percentage of users from its waitlist who will have free access for the rest of the year in order to get feedback on how to improve the product.
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