Former Waze CEO Noam Bardin announced the launch of a new startup on Tuesday that offers a new business model for online journalism. The idea behind Paygo Media is that readers should make micropayments for each article they read instead of paying a fixed subscription fee.
Today, more and more media outlets worldwide (including in Israel) are moving from a model of free online reading in which revenue comes solely from advertisements to one of paywalls that require a monthly subscription fee to access content. This enables the media to free itself of its dependence on digital advertising, which is currently controlled by Facebook and Google.
The problem is that even people who do subscribe generally do so only to a single media outlet. The result, Bardin wrote in a recent post, is that many people are left without access to a broad spectrum of ideas and are ultimately vulnerable to low-quality or false information disseminated for free on social networks.
Bardin recently left Waze, which is owned by Google. He said the new startup’s goal is to find an alternative business model that will be cheap enough to enable people to view online content on a daily basis and enable many readers to access high-quality, fact-checked content while also being profitable enough for publishers that they’ll be able to invest in a high-quality free press.
To study the system’s feasibility, he hooked up with veteran television anchor Dan Rather. They are currently inviting content producers and publishers to join an experiment that will test whether this model holds water.
Rather wrote his own post explaining the idea, in which he said that “journalism is under threat” and described Paygo as “an experiment to save journalism.” He said the startup currently has no outside funding and is now conducting an experiment to get feedback from content producers and readers.
Essentially, Paygo is a micropayment service that lets people read articles for a few cents. You can deposit a few dollars in your Paygo account, and every time you encounter a Paygo paywall, should you choose to read the article, the amount will be withdrawn from your account.
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Paygo will transfer the money to the content providers, but it won’t give them any personal information about their readers. The company itself will also collect a fee, though it hasn’t said how much.
Content providers can publish their content on Paygo’s platform and disseminate it on social media. Alternatively, they can combine its payment mechanism with their own website or newsletter. Readers will be able to read articles from many different writers and media outlets while paying a tiny sum for each one by pressing a button, without any need to subscribe or even register.
It doesn’t look as if Paygo is planning to replace the existing subscriber method used by large media outlets like the New York Times in the U.S. or Haaretz in Israel. Rather, it’s aimed at smaller outfits, from independent producers of content and newsletters to small publishers who currently have trouble attracting enough subscribers.
Thus Bardin will apparently be competing with platforms like Substack that enable independent content providers to disseminate newsletters in exchange for a monthly subscription fee.
‘The truth is paywalled but the lies are free’
In his own long post, Bardin explained the rationale behind the new company.
“To remain (or become) a society with the free exchange of ideas and a democratic system that represents the people, we need access to truthful, fact-based information,” he wrote, adding that he believes journalism must be profitable so it can produce high-quality content that isn’t dependent on payments from the giant technology companies, donations from billionaires or government funding. But he opposes the paywall model.
“As someone who subscribes to 8 different publications, I have grown frustrated by repeatedly hitting paywalls and being ‘locked out’ of reading opinions different from those I subscribe to,” he wrote. “As a believer in open networks, the move to closed, Paywalled Internet scares me ... closed systems create a situation where “The Truth is Paywalled but the Lies are Free.”
“I believe that the current subscription only model is bad for both consumers AND Publishers,” he continued. “Consumers are locked out of truthful content, forced to pay multiple subscriptions, and have to share their personal data with every publisher just to read one article.”
Moreover, as a result, “The industry itself is getting highly concentrated. The top 3 US publishers (NYT/WSJ/WaPo) take over 50% of the subscriptions, leaving the rest of the news ecosystem fighting for what's left ... No independent news source is safe in the long run.”
Nevertheless, Bardin’s proposed model raises a lot of questions. First, the system of micropayments for digital content existed in the past and was replaced by the current prevailing model of monthly payments for unlimited consumption – see, for instance, Netflix and Spotify.
Moreover, publishers may well discover that collecting money for each article separately, even if the payment is tiny, makes readers hesitate over every payment. That would create a barrier that would ultimately deter many people from paying and reading.
Another problem is that paying per article makes writers dependent on the success of any given post or article. And publishers who adopt this model will have trouble also collecting monthly subscription fees, which provide a reliable fixed revenue stream.
Finally, under Paygo’s model, while the content remains under the providers’ control, information about the readers and payers belongs to Paygo and isn’t shared with the providers. In other words, providers will have no contact with their readers and no information about them, which could well deter them from adopting this model.