Media models which work.
Axate was founded on a simple observation: traditional digital media monetisation models don’t work. If they did, we would have seen sectors like news flourish and grow in the digital era, as their audiences and views exploded. Instead we have seen the opposite.
The reason is simple: people don’t like what’s being offered.
The chase for dwindling advertising revenues has resulted in digital news products which prioritise generating the maximum volume of page views at the lowest possible cost of generating content. But it has been a losing battle: advertising revenues have grown nowhere near as fast as traffic. Lately, it has got worse - traffic and advertising revenue have both been shrinking as big platforms, notably Google, switch their priorities to serving their own AI output instead of sending traffic to publishers. Publishers are left with products formatted mainly to appeal to Google’s crawler, rather than their human users, but now even Google is rejecting them.
The alternative model, subscriptions, don’t fare much better, overall. We all know why. People don’t like subscribing to things. Most of us probably subscribe to a few things, with varying levels of reluctance, but overall when the price of access is a commitment to ongoing payment, we turn away unless it’s something we want and need all the time. A mobile phone? Yes. Music streaming? Sure. Baked beans? Hmm. A single news brand? Uh-uh.
It’s not just about the price - often it’s reduced to near, or even below, zero in a desperate bid to persuade us to defy our instinct to recoil. But most people still don’t sign up. People don’t like paying continuously for things they only want sometimes, regardless of the price. They don’t like the idea they’re probably paying for things they’ve entirely forgotten about.
So, while it’s obvious that consumer payments must - as they always have done - form an essential component of media business models, the prevailing way they work online doesn’t work well enough. In the UK only 7% of people pay for news. Most subscription publishers struggle to get more than 2% of their readers to subscribe. It is a model which leaves out the huge majority of the potential customers, and the population. The consequences are profound and resonate far beyond the economic stress of individual publishers; innovation, competition and - ultimately - democracy are all stifled by a moribund and limited media marketplace.
Axate is for the other 98%
We founded Axate to unblock the market. Excluding 98% of what retailers would call “footfall”, preventing them from being customers for something they actually want, looks like a like an opportunity. Imagine supermarkets locking 98% of their customers outside and refusing to let them enter unless they guaranteed to buy a certain amount whether they wanted it or not.
Our founding principle is that the market for media naturally extends to the entire population, and that everyone is a potential customer.
We provide the tools which remove the barriers to this happening. Publishers provide the products they want to access and pay for. Together with publishers and customers we form a network which grows virally: every new publication brings new users and the opportunity for every user to try something new. Every user brings another opportunity for every publisher.
Questions
Why insist that people subscribe when most people don’t want to?
Why does every user have to register separately on each media website?
Why lock your former subscribers out, banning them because they don’t want your product all the time?
In fact, why build walls which keep people out instead of giving them multiple ways in?
Why reduce your price to near-zero to win reluctant subscribers instead of taking away the other barriers which are the real reason they stay away?
Why chase an ever-diminishing advertising opportunity if it means making your products less enjoyable and lower value?
Why carry the expense and effort of trying to “acquire” and “own” a tiny proportion of your audience whileignoring the huge majority of them?
These are all things which media businesses do routinely. You can’t imagine other businesses doing the equivalent things. Do supermarkets make people fill in forms before entering? Do they have a separate checkout for each product on their shelves? Do they insist that no item can be bought except in packs of 30 items?
Axate’s formula:
People will buy anything when their desire exceeds the cost.
It’s really true. If the cost of having something - the price, plus the hassle - exceeds the amount someone wants it, they’ll pass.
We all experience it every day. The hassle of waiting in a queue is much more likely than the price to put me off buying a coffee.
Which is why it shouldn’t surprise anyone that even when media is priced at absurdly low prices. like $1 for 6 months access to a news site which normally costs $10 per month, most people aren’t tempted. Their desire is impulsive, occasional and informal. The price of entry involves filling in forms, adding payment details, agreeing to terms and conditions, diarising cancelling the subscription before the price goes up and the knowledge that you might never read a single other things. Who can be bothered? Statistically, almost nobody.
As you start dismantling those barriers, people start flooding through.
Take away the need to register. Take away the need to add payment information. Take away the need to promise any kind of future payment.
Bring it down to the actual price and nothing else. If you get it right, and your product is strong enough, people will buy. If they like it, they’ll come back again.
The Axate formula matters to media, especially news media, because of the way people consume news. It’s continuous, frequent, spontaneous and usually spans a wide range of products - some of them free. Almost nobody limits themselves to a single source of news, which is why offering no alternative so subscription means almost everyone finds their desire overwhelmed by your demands and decides not to buy.
That only leaves one thing.
What are you actually asking to people to pay for? It’s quite a profound question, easily glossed over. But your product needs to be worth paying for.
Did you hear that? Over there one the other side of the room? Sounds like a pachyderm with a long nose snuffling away. But the other side of the desire/cost formula is that once you have removed as many barriers as you can, you also need to raise desire for what you are offering. Do people want what you’re offering?
Glance at any random mobile phone screen, including your own, and the answer is obvious: people are spending hours and hours interacting with their devices, but not much of what they’re interacting with looks much like what news media is offering,.
because catering to zero sum markets (subscribers and advertisers)
Scared of the risk of change
Belief nobosy will pay