Paywalls are increasingly being looked to as viable options for content creators with stories like Andrew Sullivan leaving his job at the Daily Beast and using the subscription model to raise six figures in less then a day, and the New York Times generating $91 million in 2012 through its own paywall, surpassing its advertising revenue for the first time in its existence. Keeping with the trend, and in a bid to help publishers in their quest to stay open, LA-based MediaPass launched in 2010 to provide customizable paywalls, and it’s now being used by thousands of content creators looking for alternate revenue streams than traditional advertising.
“[MediaPass] is a way for them to generate somewhere between 5-20 times what they generate now on advertising by making part of their site freemium or subscription-based,” said Malcolm Casselle, an advisor to the startup. “What’s happened is the New York Times generated $91 million last year in revenue for the past 12 months on its paywall, but it spent about $40 million in developing it over two years. We basically give that same power to any publisher.”
Built to be easy enough to use by anyone who’s ever started a blog, the platform offers a number of different options to the content publishers that use MediaPass. With the end goal of optimizing revenue, publishers can choose between metered paywalls and pick the number of articles users can consume for free, or they can build customizable subscription-based options. Once added to the site, MediaPass provides a dashboard that allows for quick manipulation of which content is made available for free and which is premium.
The company makes an undisclosed amount through revenue sharing for every subscription or transaction that goes through its platform. If the publication instantly sees a spike in its revenue using the service, it will sometimes offer an upfront guarantee by prepaying them their cut of the revenue sharing agreement, which according to CEO Matthew Mitchell varies depending on the size of the publication.
Alternatives to the company’s software include building a paywall in-house, or using services like Tinypass, Press+, Cleeng, or mircropayments provider MuCash, not to mention a handful of companies enabling one-click selling for both physical and digital goods. With some of those services more appropriate for individual content creators and blogs, in contrast to an entire online newspaper site, Mitchell believes the company’s ability to cover all ends of the spectrum help it stand apart when it comes to monetizing digital content. Currently, about 50 percent of its customers are newspapers, and the other half are blogs, magazines, and other digital content providers.
Mitchell also pointed out that going with a paywall doesn’t mean the route is superior to advertising or vice versa, for him, it’s about helping the publishers MediaPass works with find the optimal balance. There are also publishers like The Guardian who are experimenting with alternative revenue streams like opening up its API to third-party developers to create apps and other services for revenue sharing purposes. Needless to say, it’s a push and pull battle between content creators looking for revenue, advertising networks being stretched by the amount of content that’s available, and consumers who are used to free content and consider it a given. MediaPass’s software will be one of many variables that determine what the future of digital content will look like.
