My Startup: Axate
We all know the traditional models for online publishing have serious financial faults. With 20 years in the industry, Dominic Young has founded Axate, a pay-per-article service for ‘casual readers’ to complement revenue raised from subscriptions and advertising.
Having launched in 2017, Axate’s ‘oystercard for news’ is currently being used by thousands of people, generating revenue on dozens of news websites, and is also being trialled by a number of large publisher groups such as Reach.
Axate has been cited as a startup to watch by both Enders Analysis and The Reuters Institute of Journalism, and was also credited for innovation in the recent Cairncross Review into the sustainability of journalism.
Founder: Dominic Young
We spoke to Dominic to find out more about his solution...
Why did you start Axate?
I want to address the strange failure of the internet to provide viable business models for publishing online. Technology has made almost everything to do with publishing cheaper and easier. No need for printing presses, paper, ink, darkrooms. No need for large centralised offices. Anyone with a laptop and a digital camera can produce what would previously have needed tens or hundreds of thousands of pounds of investment.
But technology has, at the same time, made getting paid harder than ever. There’s no digital equivalent of wandering into the newsagent and leaving a few coins on the counter. The old rule was that if your product was more popular, it would make you more money. That’s not reliably true anymore, and the money you can make from advertising isn’t enough. That’s why so many in media are struggling.
Consumer payment for news is now the exception, not the norm. It mostly takes the form of expensive subscriptions to which only a few people want to commit. We need something else.
That’s what I want to fix and why we created Axate. We want to make payment as casual as browsing and, increasingly, the norm. What I also hope will happen, as a result, will be a bigger shift in the way publishers and consumers relate to each other and the internet. By challenging some of the strange orthodoxies of the internet, I think a bigger and more diverse market can be opened up. Along the way I hope we can offer new paths to profit for journalism, new opportunities for news organisations - large, small and new - to pursue and profit from public-interest journalism, and investing in both building and maintaining trust with their audience.
Tell us more about the company.
Axate has a simple product. Simple enough that when people see it, they think it looks obvious. But it isn’t obvious until you see it and use it. We have built it based on a lot of experience in the news media, and also the digital world, to address the frictions which otherwise prevent ideas scaling. We allow publishers to engage with anyone on a casual basis. We don’t rival subscriptions but we do open up revenues from the 90% plus of readers – the “middle majority” - who will never subscribe. Users sign up once for an Axate wallet with as little as £3.00 and after that can choose when and what they spend their money on. Once you have a wallet it works on every participating site without needing passwords or logins every time.
So, for a user, it’s seamless and they don’t have to promise to spend their money on any sites in particular. For a publisher, it’s a way to generate multiple times the income from every user than you can get with advertising alone, and without having to “acquire” every user who visits your site. If a customer has signed up somewhere else, they can use and pay to read articles on your site. Every user is a potential customer of every publisher.
What exciting updates have happened recently?
We’re at that annoying stage where we can’t talk about the most exciting things that are about to happen. In terms of what has happened, we have got Axate from a standing start to our first publisher implementation, on Popbitch, and now on to nearly 20 more sites across about 10 publishers. We have seen every line on every graph rise steadily upwards and we’re beginning to see the network of publications join up – users are moving between them. As well as sites like Popbitch, The Cricketer and a slew of local newspaper titles from publishers like Reach, Iliffe and Bayliss, we are now launching Axate across sites in the USA. We’ll be adding much larger publications in the next few weeks and months – that’s the stuff I can’t talk about quite yet. When that happens, the opportunity will increase for everyone.
Back in January it was a real buzz to get cited by Reuters’ Institute for Journalism as ‘a startup to watch’ in its Journalism, Media, and Technology Trends and Predictions 2019 report. The following month the UK Government Department for Digital, Culture, Media & Sport published the interim findings of the Cairncross review into the sustainability of journalism, and it cited Axate as an innovative revenue model, which was great recognition for us too. And the praise for Axate seems to keep on coming - with our recent listing in the ‘10 startups solving key issues for media companies and magazine publishers’ by Digital Innovators' Summit (DIS).
It has also been incredibly encouraging to hear about the successes publishers are having with Axate. ExaminerLive wrote this great piece with BehindLocalNews about communicating the importance of readers paying for their product, and about the insight they’ve gained about their audience from knowing what readers will pay for. Cornwall Reports also wrote about how easy it was to implement Axate, their steady growth in Axate wallet holders and a resulting increase in their subscription uptake.
What are your aims for the next year?
We’ve assembled a team from the publishing world to create a seamless product and federated business model that works for publishers. We have proved our product and technology. 2020 is about taking our business to scale. We’ll have more to announce soon.
What’s been the hardest thing about getting Axate off the ground?
Startups are hard! After decades in large corporates, I didn’t know quite how hard! We have had the challenge of getting a product built and working. There wasn’t a template. Axate isn’t like another existing model that’s out there. We have had to design a process, user experience and technology entirely from scratch. That has been challenging. The greatest reward is when users just instantly “get it”. We’re really proud that it doesn’t need much explanation but I can tell you that making something simple enough is the most complex work you can do!
We have also had the challenge of getting publishers on board. The network that Axate creates for them is obvious, and at scale there’s huge benefits for everyone. But someone has to go first, be the pioneers. Someone else has to come in after them. And they have to wait for the network to form and start to really show results.
That takes nerve. It’s incredibly satisfying that – even when there is not yet a strong network for customers to use – publishers can start to generate meaningful amounts of money quickly with Axate. We can say that now and back it up with experience, but for the first publishers it was a leap of faith. They truly are pioneers. And let’s not forget the ideology of the internet. It has taught us that “content” is the same as “product”. That it should be free, that it inevitably will get used and re-used all over the place. Axate is, in a way, a challenge to that thinking.
The time is right, because the internet has not delivered the utopia first dreamed of. Fake news, intrusive tracking, pervasive platforms have all made everyone stand back a bit. We offer an alternative to that thinking, but we still have to win hearts and minds after 25 years of an almost unquestioning acceptance that “free” is the best price, copyright is outmoded and unfair, and that value inevitably ends up in the hands of huge platforms. I think we’re beginning to win that argument!
Why should more people be using Axate?
We know that customers love the Axate approach and only wish for more publishers to join. We get a lot of positive feedback from Axate users who love using the wallet, but wish that they could use it on all the publications they read. One person on Twitter wrote: ‘I get so evangelical about Axate and Popbitch using it and I cannot understand why Guardian, Telegraph, Times etc won’t use it.’ Another said: ‘This app @axate is the perfect app for the modern age.
Simply being able to pay for news without logging in or registering or entering card details. More publications should be using it.’ You can read more of people’s thoughts about Axate here. Users will use Axate to get to the products they want. They should use it because the price being asked is worth it and doesn’t overwhelm their desire for the publication in question.
For that, publishers need to make sure their product doesn’t disappoint. By implementing Axate they reduce the barriers and stakes to a level which both they and their consumers can manage. So publishers should use Axate because it’s fast, simple and risk-free to implement, and the fastest route to consumer revenue regardless of the value proposition and price of your product. Consumers should use it simply because it works and gets them the stuff they want, in a way that suits their reading habits.
How much will it cost publishers? and why is it worth it?
For publishers, implementing Axate doesn’t cost anything except a little bit of time. We don’t charge fees, we share revenues. Publishers decide what they charge for, how much they charge, what price caps they want to use – everything. Implementing Axate also doesn’t cost publishers subscription sign-ups; in fact, we’ve seen that implementing Axate can actually drive up subscription rates. It can works to funnel readers into subscription: readers get the chance to try before they buy.
As publishers learn more about what their users value, they can adjust how they develop and price their product. Over time they can optimise their revenue and traffic to suit their audience, product and business model. Ultimately Axate works hand-in-hand with publishers, adding a new revenue stream that works alongside ad revenues and subscription models. With the insight that comes with knowing which articles are most popular, publishers can focus investment on the journalism that their readers most value highly, which is great for everyone.