When was the last time you counted the number of subscriptions you pay for? There’s a reason “subscription fatigue” is a term.
Both consumers and brands are looking for an antidote — especially as roaring inflation across Europe has people reconsidering how many Netflix-like services they cough up for each month. Nearly two-thirds of UK consumers say they’re cutting back on subscriptions as the cost of living increases. According to a report by GP Bullhound, 46m consumer subscriptions were cancelled in the last year.
One Swedish startup, Sesamy, is betting the answer is pay-per-click — a strategy some media brands experimented with in the past but never stuck with. And it’s now bagged funding to make that a reality, with a €3.3m seed round it's announcing today led by global investor and analysis firm GP Bullhound.
Could they be on the cusp of finding a new funding model for media?
Second wave of pay-per-click
Sesamy was founded by two former cofounders of the well-known independent podcast company Acast together. The new startup launched its pay-per-click service for books alongside major Nordic publishers last year.
In the last few months it's launched a news service with two Swedish digital publications, tech site Breakit and political site Kvartal. The idea for both services is that consumers don’t have to buy an all-or-nothing subscription, but can purchase one book or one article at a time.
Sesamy cofounder Måns Ulvestam believes that there's a new wave of pay-per-article made possible by new technology.
“The problems with those older services were that they didn’t have software to show which articles and for which readers pay-per-click should be an option. They also lacked a built-in price optimisation, to make sure the service wouldn’t cannibalise on subscription revenue, which is publishers’ greatest fear,” Ulvestam says.
Some of those “older services” include a pay-per-article project between Sweden’s largest daily, Dagens Nyheter, and Klarna in 2014. The same year, Dutch startup Blendle launched an online news platform that collected articles from a variety of newspapers and magazines in its app and sold them on a pay-per-article basis.
However, both of them were discontinued. In the case of Dagens Nyheter and Klarna, the project was thought to compete with subscriptions, and in the case of Blendle, newspapers didn’t want readers using an external app to read their stories — so the service was discontinued in 2019 in favour of a premium subscription service.
How do you get people to pay for content if they won’t subscribe?
Sesamy solves those early efforts’ issues, says Ulvestam. Now, pay-per-click can be a way for publishers to increase their revenue.
According to Ulvestam, publishers have managed to optimise subscription revenue and many of them can't grow much more. And since the economic downturn, publishers’ advertisement revenue is declining as well as subscriber numbers.
“With both of those revenue streams being hit, we have had a bit of flux,” says Ulvestam.
Another company in this space is UK-based Axate. Instead of offering a pay-per-click, it's partnered with local media outlets that don’t have subscriptions at all. Instead, readers can access articles by using Axate’s digital wallet.
“People aren't really that bothered about putting £3 in a wallet and paying 50p for an article. What people are worried about is subscriptions,” says Dominic Young, founder of Axate.
He agrees with Ulvestam on the saturation of the subscription market and adds that since subscribers for news publishers are often quite affluent, the market isn’t growing as such.
Good timing for a new revenue stream
Young believes that although pay-per-click may be seen as a threat to the subscription model, the discounts offered for subscriptions by publishers themselves should then be seen in the same way.
“You might imagine that someone paying full price for a subscription, who sees that the same publication is offering a six months subscription for €1, may feel inclined to cancel that subscription and sign up for the cheaper deal,” Young says.
“The fact that such deep discounts remain commonplace suggests that the fear that loyal subscribers might be ‘cannibalised’ by cheaper offers is not borne out in reality. That is certainly Axate’s experience,” Young says.
There are also changes in the media landscape since 2014 that might give pay-per-click a better chance this time around — and push media companies to look for other revenue streams beyond pure subscriptions.
More people are reading news on mobile instead of desktop, which has eaten into advertising revenue (they just can't fit as many adverts on your mobile screen). Another problem is the relationship with Facebook, which changed its algorithm in 2018, limiting the reach of news stories.
