“I’m a classic news junkie. I actually want them all and it’s really hard to pick one or two so I can do without, which is a real shame,” Dominic Young says.
The founder of Axate believes he has solved this problem of which online news site or app you have to pay to read, with his service that allows users to pay pennies to read an article that would normally be behind a paywall.
Subscription paywalls are now an essential part of the media landscape, as many online publishers don’t want to rely solely on ads and charge their readers to pay for news and journalism.
But in a world of Netflix, Spotify and Amazon Prime, subscriptions can add up quickly, so what if there was a middle ground? By making people pay 20 cents to read an article, for example, or a small amount for a day pass, Axate wants to deliver one.
Dominic Young launched Axate in 2017 in an effort to support journalism in a digital world
A self-confessed news junkie who spent many years at Rupert Murdoch’s News Corp, Young, who launched Axate with fellow ex-exec, Victoria Silberbauer, thinks this mixed way of paying for news offers something different.
‘Personally, I don’t think there is one model that works for all media. I think most payment models try to teach people a certain way of behaving when that’s not good,” he says.
Many people have thrown around the idea of micropayments over the years without getting off the ground, but Young thinks this more casual approach pays off, despite subscriptions dominating the way people are billed.
The cost of reading an article is determined by the publisher, and Axate’s system includes a price cap in the form of a travel card, and once readers reach it, all articles read are free.
This allows a publisher to charge a maximum that is equal to, for example, its weekly or monthly subscription.
Axate has received attention by his crowdfunding campaign on Crowdcube, which has raised nearly £400,000 and is valued at £11.3 million. It’s currently partnering with some local and other smaller publishers, but can it convince some of the big players to get involved and change the way people consume news?
The question Young had pondered before starting Axate was, what if there was a way for consumers to pay only for the articles they want to read?
It is becoming increasingly clear to anyone reading articles online that the days of an “everything on the internet is free” mentality are numbered.
With some publishers there has been a clear shift from a completely free ad-supported model to a subscription paywall, this can either be free with a freemium element of a certain number of articles first, or a hard paywall where nothing can be read without paying.
Subscriptions can help businesses make a profit, but ordinary readers are left out and it can be impossible for people to read important studies without paying a monthly fee.
‘I think news is like coffee and sandwiches. Asking people to think about it more formally almost guarantees that a large part will walk away
“The idea for Axate came about more than 10 years ago when it became clear to me and others that advertising or a subscription alone would not be enough. What can we do in the middle? That’s a question that won’t let go of me,” says Young.
It was not only his experience with the media industry, but also his own personal consumption of news and other services that formed the idea for Axate.
“The things I subscribe to are things I need all the time and give me everything I need, like Spotify or my phone.
“The things I don’t subscribe to are where I need a lot of things and I don’t want to be too limited to just one, or my need is more variable some days than others.
‘I think news is like coffee and sandwiches. Asking people to think about it formally almost guarantees that a large proportion will run away.’
Axate users choose an article to read and pay with the money in their account
Interestingly, given that comparison, Pret launched a coffee subscription last fall. But while that has attracted thousands of customers, the fact that people who pay for their coffee this way are only a fraction of the daily traffic and if Pret only sold drinks via subscription, sales would plummet.
While the logic of a payment alternative may make sense, Young is aware that major publishers make informed decisions and are unlikely to rush into changing current systems.
But he says Axate can capitalize on this by potentially sitting next to an existing model.
‘You don’t have to suddenly have a massive shutdown. The paywall is coming down, shutting everyone out and doing something very disruptive and hostile,” he says.
“It’s important to me that publishers implementing Axate can do this without that turbulence…and add options that they can adapt and evolve as their products, their relationship, their audience evolves and so does their ability to get more into it.” product to invest.’
How does Axate work?
Once a user logs in to Axate, they can go through the system to a publisher and choose an article to read and pay from the cash pot in their account.
Axate does not charge readers upfront fees and instead gets a share of publishers’ revenues.
Currently, this pay-as-you-go approach to journalism reading can be used by 15 publishers, including some local news websites, including the Yorkshire Post, and the music and celebrity site that grew out of the popular email newsletter Popbitch, but it must yet to be rolled out to larger publishers.
The cost is determined by the publisher and can be, for example, 10, 20 or 50 pence for an article. Some, like the Yorkshire Post, offer a daily success rate.
Axate proposes a benchmark, but publishers are given the freedom to adjust the price and, crucially, cannot charge different prices for different items.
In addition, the company has introduced a price cap in the form of a travel card. Once readers reach that upper limit for a period of time, they can continue to read a site for free.
“It would be perverse to punish people for reading too much. You want to encourage them to read a lot so they get more bang for their buck when they do,” says Young.
Most importantly, there is no ongoing commitment. Young compares it to ‘cup of coffee’ spending, with the average amount being around £3.
‘[The money] You don’t get taken every month no matter what you do, and that’s one of the main things people are nervous about with subscriptions.’
Can Axate turn paying for news into profit?
Axate isn’t the only company trying to make informal payments work for journalism. The Dutch company Blendle, which was called the ‘iTunes of journalism’ seven years ago, was recently bought by the French colleague Cafeyn.
However, in 2019 it stopped using micropayments to lean on premium plans because it was not making a profit.
Axate is not yet profitable and the recently launched crowdfunding campaign will help fund its ongoing operations and expansion. With crowdfunding, personal investors take a small stake in a startup company, along with founders and others who have supported it.
Crowdfunding has become a popular way for startup companies to raise money, create a pool of small investors who support something they are interested in, and raise a company’s profile.
Young says, “It’s really about growth. I think we should be ready to go into scaling mode because if we sign up a really high volume publisher, you can expect the numbers to increase pretty quickly.”
“We think this funding will take us past that point. We may or may not need to do additional fundraising after that. We need to scale up customer and technical support as we grow. The idea is that Axate is a facilitator for many people instead of becoming a big thing itself.’
Axate has already reached its crowdfunding target of £350,000 with over a week to go until the round closes, and has raised £399,500 at the time of this article’s publication.
It also says it has raised £2 million from private and media investors.
The idea is clearly resonating with people — and Axate says it has 31,000 users — but it’s unlikely to gain any real steam until a major batter in the industry puts a stop to readers paying for news online this way.
That said, it is perhaps journalism fledgling operations that have the most to gain from small payments to read their articles, allowing readers to support them without subscribing and the difficulty of relying on online advertising, which works best on Scale.
Young is persuasive and optimistic about the future of news that will no doubt play well with publishers, but are they going for it? He seems to think so.
He says, “I think the major subscription publishers are open to the idea of expanding their customer base and generating new revenue, but they are cautious because of their subscriber base and they want to protect that. The way to implement something like this is a little slower for them.’
Axate’s crowdfunding campaign can be seen here. It closes on October 21.
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