27. October 2014–
After investing $20 million in Silicon Valley based newspaper app ozy, German publishing house Axel Springer now invested in the Dutch newspaper app Blendle. The round was joined by The New York Times.
The story behind Blendle
After the music industry suffered from the internet as a distribution channel, newspapers face similar issues. The question of how to finance journalism these days has not yet been solved. Since advertising itself won’t do, some publishing houses have tried to make user pay for articles and have built a paywall solution. In this case, readers often move somewhere else, as often other media offer similar content for free and payment solutions are too complicated.
Blendle’s founders Marten Blankesteijn and Alexander Klöpping (both 27), both journalists, started this project after seeing the issues the Netherlands faced with digital publishing. Jobs were cut, and journalism as well as online advertising was declined, Klöpping writes in his blog post.
The project – “iTunes for newspapers”
Instead of signing up for every newspaper and paying monthly fees, Blendle wants to connect all newspapers in one app for free. Klöpping explains how the business shall run: “Only when [the readers] actually read an article, they have to pay for that single article. And if they don’t like it, they can instantly refund their money.”
Readers can see what friends read, follow interesting curators (e.g. politicians, journalists, celebrities) and see the recommendations from the paid content section, as well as which articles are trending.
While entire newspapers can be bought in the app, an article costs between 10 and 50 cents, VentureVillage was told. The article price is decided by the publishing houses. The revenue is distributed into 70% for the publishing houses and 30% for Blendle.
Readers purchase a €10 credit upfront that they can use to pay for the articles. Once the deposit runs low, it automatically gets recharged. Users currently get an additional €2.50 credit when signing in with Facebook, .
Though the startup that launched six months ago doesn’t share any numbers, it does say that it currently has 130,000 readers. The investment will be used to expand throughout Europe. Until now, it is only available in the Netherlands, but with Axel Springer being one of the biggest publishing houses in Europe, expansion will come within the next two years.