A new initiative aims to prove micropayments work for publishers

Why launch a micropayment solution when all that publishers seem to want is to have readers committing to a subscription? For Dominic Young, founder of start-up Agate, it’s necessary to offer the audience a more flexible relationship.

by Simone Flueckiger | May 15, 2019

With Agate, publishers can charge users on a pay-per-article basis, enabling them to tap into new consumer revenue by removing cost, subscription and sign-up barriers. After registering with the service, users can pay for content on affiliated sites via an online wallet, eventually reaching a freepoint, which gives them full access for a set period of time.

“The idea is that a consumer doesn’t constantly keep getting charged and effectively punished for the more they like a product,” Young says.

“Instead, the deeper they dive into a given product, the better value they get.”

Currently, all Agate-affiliated publishers are British, although American outlets are set to join before the summer. Young says he is in conversation with around 70 publishers, expecting between 10 and 20 to launch in the near future.

“The opportunity for the publishing industry to define a new, significantly scalable revenue stream and then effectively collaborate, formally and informally, to maximise its value is really high,” he says.

“The only limit on the value of that market is the willingness of consumers to part with money, which is fundamentally a function of how good publishers are at making attractive products because the commitment required is really low and the individual price can be very low indeed.”

Ahead of his appearance at the World News Media Congress, June 1-3 in Glasgow, Young shares some more insight into the workings of Agate.

WAN-IFRA: What kind of reader or user would want to make use of a service like Agate?

Dominic Young: The people we’re targeting with Agate are what we call the middle majority, which is the people who are not objecting to the idea of paying for things as long as they like them and they’re worth paying for, but they’re unwilling to make multiple subscriptions because they don’t want to make that level of commitment to multiple different publications.

For what type of publisher would it make sense to work with Agate?

I think it makes sense for everybody, because Agate is just a tool and publishers deploy it, and price it, and offer it in a way that fits them and their customers. What Agate doesn’t do is say ‘Here’s what your business model needs to be’.

For example, we have publishers who have a subscription offer right now but are struggling to get to a large conversion rate, and they’re struggling to achieve net growth. For them, it’s about giving users a lower entry point to develop a habit of using their product.

When subscription products launched Agate, they actually signed more subscribers as well as more Agate users. It’s helped them sell subscriptions. We can speculate about the reasons, but I think part of the reason is that most people like a choice. When they are offered this or that, people are more likely to choose something than if they’re just told that there’s only one option.

So, it works really well for publishers with subscription offers. It also works really well for people who currently have free products and are struggling with ad revenue, but who know that subscriptions may not work well for them. The idea of this is that it fits around whatever business model a publisher wants to introduce.

Has there been any concern from publishers that offering Agate might compromise their subscription business?

Any publisher who has a successful subscription base is bound to take a more cautious stance. For some of them, that means they want to launch Agate outside their core market first.

For instance, if you’re a British publisher with a large American audience, you’d probably find it harder to convert the American audience to subscription than the British audience, but you know that there’s an opportunity there.

You might offer Agate to certain territories to begin with in order to maximise your uptake of new paying users.

What we discovered, and I’m sure we’ll keep discovering as things unfold, is that the actual risk to a subscription base is not as great as people fear. I think what we’ll continue to see is publishers rolling Agate out across more and more of their portfolio and across more and more of their audience as they test it and get to know it. But it’s entirely up to them. It is their product. We are just a tool that they can use where it’s appropriate as a new revenue stream.

We also know, not least because we used to sit within publishers, that some are a bit sceptical about technology partners that promise the earth and charge fees up-front but deliver little. That’s why we’ve been focused from day one at looking at it from the publisher point of view; a solution that’s both easy to implement from a technical perspective and can start delivering incremental revenues from the get-go. We don’t charge anything to implement Agate, we get our revenue as a share of what publishers get. If it doesn’t work for them we get nothing. That way our interests stay aligned with theirs – and vice-versa – permanently.

Who has control over client data?

The biggest issue for data is GDPR, obviously. When a user signs up for Agate, they’re signing up for Agate. They’re introduced by a publisher, but we do need that user’s consent before we can share information. That’s the limiting factor on our ability to share data. Once they’ve got a wallet, obviously they can use it on any publisher, not just the one who introduced them.

I think the best way of summarising our attitude to data is to say that to the extent that we can, we share it.

We want to share it with publishers because our outcomes are driven by more consumption, by consumers, which is the same as what drives the outcome for publishers. We don’t have any particular use for data other than to use it to help publishers make more money. The data question is complex because of GDPR but the incentives are not unaligned.

What are the benefits for publishers using Agate compared to aggregated services?

This is definitely a personal opinion. For me, if you are contributing your content to an aggregated service, you don’t have control over exactly what is presented, or how it’s presented, or what it’s presented alongside.

For me, as a publisher, that’s a pretty uncomfortable feeling because my business is having a product, having control over my product, and having control over my business model. I find the aggregation idea a very, very uncomfortable way of addressing my primary audience, but different publishers have different products and different business models. Maybe it does work for some, but for me, that’s the issue.

If you’ve given up control of your product, its presentation, its pricing and its audience, then what are you?

I think the internet taught us to believe that every article is itself a little product and volume is the important driver of everything, but recent years have taught us that’s not quite right.

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