Dominic Young

I started Axate from a very simple realisation, formed when I was working as head of Strategy for Newscorp towards the end of the noughties. It was clear that any business model based solely on advertising couldn’t work; in the past, a big chunk of ad spend was guaranteed to newspapers, but the internet offered a lot more ways for advertisers to spend their money.

Subscription was also appearing to be more of a challenge than first anticipated. It wasn’t the traditional business model of newspapers. Before, almost everyone read at least one newspaper a day, bought it over the counter, and almost no one formally promised in advance to do so.

At the time, most newspapers were free online. When Newscorp took the Times behind a paywall, they were scoffed at — it took determination to make it the success many predicted it could never be. Efforts to replicate that success on more populist brands like The Sun stumbled. The model just didn’t fit with what the readers wanted.

Fast forward to now, and not much has changed: there are a few newspapers doing well with subscription, and there are a lot of others struggling.

‘Payment’ and ‘subscription’ are still used synonymously by most in the industry, and the realisation that they are not was what led me to starting Axate. The problem isn’t that people object to the idea of paying, but that the level of commitment and hassle required overwhelmed their willingness to do it. Subscription just asks too much of most readers, whose real lives encounter news in many places, quite casually, quite frequently and quite briefly.

You could say the inspiration for Axate came from the quick trip to the newsagent on the way to catch the train. How could we make paying for media online at least as simple as the digital equivalent of dropping a few coins on the counter when you’re in the mood for a particular title?

Where are we now?

Axate started as a a simple pay-per-article tool for online publishers. Our aims were — and still are — simple: give readers an easy, fuss-free way to pay, and give publishers a way to monetise the casual readers, who make up the bulk of their readership.

Axate is a digital wallet: you upload some money and use it to pay for what you want to read, when you want to read it. You only sign up and input your details once, so you aren’t juggling yet another handful of passwords and log-ins (or the dreaded “enter your email address again” multiple times a day). Publishers know their product and audience best, so they should decide how much to charge per article and when to cap payment so that readers can get unlimited access to their site.

Over time, publishers requirements evolved. They didn’t just need different pricing per article; they needed more flexibility. More and more local newspapers, who have suffered some of the greatest hits from the decline of the digital news industry, have shifted to a ‘day pass’ rather than payment per article alone. It’s their whole product which has value for their local readers, not individual articles, so charging people once for everything makes more sense for them — as long as the price is right. Using Axate that sort of experimentation and change was and is simple.

Then, when the pandemic hit at the beginning of 2020, we witnessed an urgent need for access to timely, reliable and often localised information. Newspapers, particularly local ones, were more important than ever; at the same time, their main revenue source, advertising, collapsed. We quickly developed a ‘pay if you can’ tool for publishers to be able to offer readers important news for free, while still maintaining some income at a time they needed it best.

Most recently, we introduced a subscription option to Axate’s tool kit. That means all the different ways to access a site are in the same place: casual readers can upgrade to a subscription, usually priced to deliver better value for money and benefits for frequent readers. If they want, readers can go back to casual payment — still spending money when they visit and without “churning” and being completely lost as readers and paying users. This is important for publishers especially now, when many new subscribers who signed up during the news-obsessed early days of Covid are now turning their attention (and spending) elsewhere.

Where we’re going

Axate isn’t just for news, of course, nor is it just about simple payments. When I started Axate, wearing my strategic hat, I thought a lot about the incentives driving what was happening in the market. It seemed to me that there was something very wrong when the incentives are driving publishers to one of two dominant business models, advertising and subscription, neither of which work particularly well for the bulk of their customers.

Axate is designed to align incentives around a single force: consumer engagement. If more people reading more stuff generate more revenue opportunity, it can unlock new ideas and new approaches to delighting people with products they love and want to return to. Equally, if every customer can access every publication, the media can take advantage of its greatest hidden asset — its network. The network the news industry reaches (even without video, audio, music etc) is gigantic and engaged, so why does it generate such anaemic revenues?

Axate’s whole approach, business model and commercial terms are all designed to activate that network and deliver incentives to drive long term growth and investment. Better products, more widely consumed, can make more money. New products, well launched, can instantly access a large and low friction audience ready to pay. There is no in-built upper limit to that market.

Once you take Axate’s logic and apply it to other areas you can see it works just as well. We have huge potential in streaming media like video and podcasts, where a few pence will be spontaneously and willingly spent for content which people know will be great (and, perhaps, then won’t be interrupted by irritating and un-skippable ads).

Axate is a network, fundamentally built around the needs of the creative industries and their audiences. It can act as one of the backbones of a “media layer” of the internet. Here, much of the high value and useful content and products generated by creatives and media companies can exist in a networked relationship with each other, powered by a rational economic model with shared incentives and driven by user demand and response.

Given that network already reaches everyone online, it’s an exciting prospect.

Originally published at https://www.axate.com on September 23, 2023.