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[on-hold music] This episode of the Rebooting show is brought to you by House of Kaizen, which collaborates with leading publishers and brands to optimize their entire subscriber journey from marketing to product experiences for net growth and sustained recurring revenue.

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The world has changed substantially over the past couple of years. Publishers cannot rely on the tried and true methods that they used in building their subscription businesses.

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That means having a framework in place for experimentation tied to business results, not experimentation for experimentation's sake.

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The path to being a customer-centric company is to take a test and learn approach to prove out hypotheses.

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House of Kaizen has over two decades of experience working with customers to unlock new value in their audiences to deliver sustainable revenue growth through research-based performance optimization.

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Ugh, let me try this again.

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This episode of the Rebooting show is brought to you by House of Kaizen, which collaborates with leading publishers and brands to optimize the entire subscriber journey from marketing to product experiences for net growth and sustained recurring revenue.

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The world has changed substantially over the last couple of years. Publishers cannot rely on the tried and true methods that they used in building their subscription businesses.

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That means having a framework in place for experimentation tied to business results, not experimentation for experimentation's sake.

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The path to being a customer-centric company is to take a test and learn approach to prove out hypotheses.

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House of Kaizen has over two decades of experience working with customers to unlock new value in their audiences to deliver sustainable revenue growth through research-based performance optimizations.

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To learn more about how House of Kaizen can help you, visit houseofkaizen.com. That's Kaizen with a Z. Thank you to House of Kaizen. [on-hold music] Welcome to the Rebooting show. I'm Brian Morrissey.

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Each week I have a conversation about building sustainable media businesses with people who are doing just that. This week I'm focused on subscriptions, but from a different angle.

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I mean, having, uh, direct revenue as a core part of your revenue portfolio has many advantages. I mean, that revenue, unlike ad dollars, is recurring and tends to be less volatile.

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Advertising is easy to turn on and off, which we are seeing in some areas right now, and it's also having subscriptions forces an organization to be audience first since the audience are now customers.

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And we've seen too often in, in a lot of ad-driven models that the audience's interests tend to come last.

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But subscriptions are not a panacea, and few publishers can hope to convert more than ten percent of their overall audience to paying subscribers, and I know there are some niche exceptions, as any rule has its exceptions.

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Advertising can help, of course, and I'm a big believer in hybrid models.

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But publishers need to find a way to solve for the dilemma they have, that there is a demand for their premium co- uh, content from audiences that will simply never pay them for their full subscription.

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Now, micro payment schemes have usually failed, but there is this dilemma that's still there.

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And this week I'm talking with Axel Bard Ringgas, who is the co-founder of Informed, a new news app that has collected select premium articles from publications like The Washington Post, The Economist, Financial Times, and Bloomberg.

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Informed's pitch is interesting.

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It, it will initially target English-speaking audiences in rich markets in Europe, like Germany, and there you find people who are far more likely to consume articles here and there from English language publishers, but not to the degree that they're gonna pay full freight for a subscription.

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Now, most of these publishers, when you talk about the FT and Bloomberg, even The Washington Post, a little less so The Washington Post, but definitely with The Economist, and these are very high priced subscriptions, okay?

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And so that, that makes the hurdle even higher. The idea of offering this as a companion to the subscriber programs actually makes a lot of sense to me. So I wanted to have Axel on to talk about it.

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Axel's a former Spotify executive, and we discussed this approach, the struggles publishers typically have with fully monetizing international audiences, and also the differences in pulling this, pulling off a Spotify for news model as opposed to the music industry.

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Hope you enjoy the episode. [on-hold music] Axel, welcome to, uh, the podcast. Really appreciate you doing this. Thank you very much, Brian. Great to be here.

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Okay, so let's get into to Informed, because, like, I love talking about this stuff because on the surface it totally makes sense. Like, and this is my sort of...

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I'm gonna get into your story, but this is me from the outside, like, thinking th-thinking it through, right? You've got consumers on the one si-side. They want access to, to high quality information.

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Let's, let's just assume that's true. It's not true all, all across. But, like, on the other side, we've got people that make quality information that they do not have... Uh, digital advertising does not work for that.

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It just does not work. We-we've tried this, it just doesn't work, and so people pivoted to subscriptions. We've got some tremendous success stories out there here in the United States.

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We keep talking about The New York Times. They got ten million subscribers, blah, blah, blah, blah, blah. Okay.

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Problem is, even in the United States, only, like, sixteen, seventeen percent of people pay for subscriptions. Forget about, like, somewhere like the UK, where it's, like, seven percent 'cause they're way cheaper.

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Even those people have, like, an average of two subscriptions, and this is the biggest, deepest, you know, richest market.

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And so if you're a publisher, you've got a problem because you're not gonna be able to make money off of ninety plus percent of your audience, not to the level that you, you, you need to in order to be a sustainable business.

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So you've got these needs on both sides, and yet, Axel, these models have a very checkered history.Those are all my biases- Yeah... I'm laying them out there right there.

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Yeah, no, I th- I th- you know, I think that, well, in particular on the consumer side, I think that's obviously a very accurate, uh, accurate picture. I mean, we live in a, you know, it-

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it- it's a cliche, but we live in a world of information overload.

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Uh, you know, people have less and less, uh, uh, time, and this sort of, this dream of a, of an app that can, can, can give you, you know, uh, access to many different publishers in one, uh, cur- curated, which is what we do, you know, has, has obviously always been, been there.

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I think the t- the, as you said, I think it's, it's very much a qu- you know, a timing question. There have been many companies in the past that have attempted to do a similar- Yeah... thing as we have.

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But I think, you know, on the one hand, the consumer, the consumer problem, if you wanna say, th- th- th- put it that way, was not as large in the past, you know, 10 years ago, maybe not even five years ago, as it was, as it was now.

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Because back then, uh, you know, the- there were not, uh, you know, news was also predominantly free, and the advertising model was larger than, than, uh, than it is, uh, it is now. There were fewer paywalls, simply put.

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And I think another reason, on, on the other side, so on the, on the publisher side, I mean, a couple of years ago, publishers were just getting started with their, you know, direct monetization strategy, their, their paywall and subscription s- uh, strategies.

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And thirdly, uh, the access to venture capital, obviously just things have changed a bit, a bit in these last couple of months, but the access to venture capital, you know, was not as good as it w- as it is now, or, or, or as it was up unt- un- until, you know, a y- a year ago at least.

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And I think on the publisher side, I think, I mean, as you said, many publishers have been very successful with, uh, you know, uh, monetizing consumers directly with subscription.

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I mean, if, I mean, years ago people said that that model w- is, you know, it's, it's never gonna work, so people aren't gonna pay for it. They're used to everything- Yeah... being, being free.

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But that's just not, not true. So I think we, when, like, we started, we had the luck of st- to start in, in, you know, with perfect timing, where the consumer need was higher than it's ever been before.

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And when publishers have been, you know, very, as I said, very successful, uh, and have also ha- you know, themselves, and then also have, ha- have a sort of better understanding of which audiences they, uh, you know, want to monetize themselves and which audiences they do not want to, to monetize, uh, themselves.

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And, uh, and, and we, I mean, we survey all of our subscribers, and also all of our non-subscribers, and it's pretty clear that our subscribers, they, uh, do not have, almost have also never had direct subscriptions to, uh, to, uh, to publishers.

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So what we, you know, what we can give the publishers in this case is pure incremental revenue. I mean, they have the content.

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They are, and they as, and they should obviously monetize their core, uh, subscribers directly, but there will always be people out there in the fringes that are not direct subscribers. Yeah. That will never be.

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And since we're also, I mean, there are other models where you, you know, micro payment models and stuff that have been tried. W- we're obviously, like, sort of off platform.

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We're very far from, from the publisher, in particular as our core audience is, is European, and the publishers that- Yeah... we have are Anglo-Saxon.

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Like, the, the, the, the, I mean, our, our, our, our, our sort of typical subscriber honestly would have never heard about, you know, a ma- a magazine such as Foreign Policy in the past, but they read, you know, the selected articles from Foreign Policy on our- Yeah...

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on our platform, and we generate incremental revenue to them. And then the third sort of element- Yeah...

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is the fact that, I mean, publishers for obvious reasons have been wary of, you know, startups coming to them and saying, "Hey, give us your content. You know, we, we don't have any users.

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We also don't have any revenue, but when we get revenue, we will pay you some, some, some, you know, revenue share or whatever."

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I think we, you know, we're lucky enough to be able to launch in a time when we could raise enough venture capital to also, I mean, I'm not gonna get into the, the, what our deals with the publishers look like, but, you know, where we could, could show them that we're serious about this- Yeah...

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and that we can, you know, we, we, we, that we can and we will, we'll pay them, [laughs] so to speak. People need to know that there's, there's trade-offs to everything.

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So then, like, let's talk about the, the, the, the trade-offs, 'cause I, I get this, this pitch a lot, and a lot of... This is not... Explain the system that you, that you set up.

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And also, it sh- I think it, it would be good to, like, note that, like, you're, you know, you have, you were at Spotify, right?

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So, like, you know, you've, you've seen this before, and I think that there has, there's long been people talking about a Spotify for news. And again, it makes total sense, right?

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But the w- either both timing and how these, these platforms and businesses have been designed have not worked for, for both sides, because you have to satisfy this consumer need.

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Consumers want access to all sorts of stuff, right?

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And you have a publisher need, and publishers want not just to, to build sustainable businesses and have, like, direct revenue and stuff, but they've, they wanna protect- Mm-hmm... their subscription programs.

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They don't want- Mm-hmm... they don't want the sort of- Mm... conflict of that. Mm. They don't wanna cannibalize that. Mm.

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So explain how, how you s- took your experience at Spotify and applied it to this particular, um- Sure. Sure Or if you didn't Sure, def- I don't know... def- definitely.

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I mean, we- we're definitely not, and do not have the ambition to be a Spotify for, for news, for many different, different reasons.

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So I mean, Spotify, you know, has access to or needs access to literally ev- all content there is, all music th- there is. Uh, wh- whereas, and in the beginning at least, did not focus that much on curation.

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I mean, when I was on Spotify, it was just, like, you know, 30 million songs just dumped into, into a player. Our focus is, has always been and will always be, uh, curation.

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And we also do, do not need and we don't want access to-Neither all publishers nor all the content from publishers. It is about curating the content, you know, the limited content that we have to, uh, to our subscribers.

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And the big difference is obviously also that, like, the, the labels that Spotify license from, they do not have their own-- I mean, as you said, they do not have their own consumer businesses.

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There, there's always been, I mean, the business model of, you know, having a, a distributor has always been there. Whereas, and you know, publishers, they obviously have their own, uh, uh, consumer businesses.

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But again, then the difference is that news is not always, you know, with some exceptions, but also for, you know, language reasons, it's not one hundred percent global.

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Whereas music, you know, to more, many extent, most extent, is one hundred percent global.

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So the problem in, in, in, in, in quotation marks that we're, ha- you know, solving for publishers, that they, that we can help them gain incremental revenue from territories and users that they, you know, on the fringes that they, they, they would normally not reach, that problem, you know, did not exist in the same sort of extent for labels, because, you know, Rihanna is listened to in, you know, from, from Seoul to Seattle.

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[gentle music] At the same time, like, you know, there, there is...

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I mean, there's definitely similarities, right? Like, I mean, before, I mean, Spotify to me and all the... And, and look, there's previous music services, some legal, some illegal, that I used.

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And, you know, it was always, there was a bundle of content, which was the album, and you had to buy the entire bundle, and, you know, even Guns N' Roses had some duds on those albums.

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And so, like, you're like, "Hey, maybe I'll just buy Sweet Child o' Mine." And, and that was amazing with, with, with Apple doing that.

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But obviously, it's, you know, pay ninety-nine cents a song ended up becoming a hassle. And, and I think that is basically the equivalent of, of micropayments.

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You know, micropayments, again, like, you know, people, when confronted with bundles, people typically say, "Oh, but I don't wanna pay for all this other stuff."

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And then, like, when you disaggregate a bundle, it becomes a pain in the ass, [chuckles] and people are like, "Why can't I just pay once?" And it's like, "But, but that's what you just had."

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And, and you j- have to find some kind of middle ground because there's so many albums out there that you wanna make your own sort of album based off of, you know, a few songs.

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It's-- And so I think, like, there is some sort of similarities in that way. But, like, I wonder, like, how you end up thinking about this from the publisher side, right?

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Because let's, let's just stick with the Spotify thing. You know, like, it, it's, it's been good for some artists, less good for other artists. How, how do you strike these deals with publishers?

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'Cause I'm sure you've met with some wariness on the side of publishers [chuckles] who have-- They've heard a lot of similar pitches before that have never panned out for them, really, beyond, like, some truly incremental revenue.

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I mean, I th- I think the key is, uh, the, the fact that we, you know, f- first of all have many publishers on our platform, and that we then also only use, you know, a selected few articles from these publishers.

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So the, you know, the, the, the difference between a core subscriber to a publisher and, and, and an Informed subscriber i- is, is huge.

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Like, the, if you, if you, if you, if you want, you know, a little more from the, the, from, you know, Publisher X than Informed has, then you're obviously, you know, then you obviously should su-subscribe directly to the publisher.

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So there's a huge sort of gulf between, uh, between our subscribers, who, as I mentioned before, you know, in almost all cases never h- have and do not subscribe directly to these publishers.

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Just a completely different, different, different audience and, and target group, and something that we...

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I mean, and also since we, we, we, we have a different sort of tonality, uh, you know, in, in, in a dif- different, you know, we, we, we market Informed in a different way, and so forth, and we can obviously also, you know, track, track this.

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So I think that, y- you know, I think the, I think the micropayments model, I can totally understand why, you know, publishers would be wary of that, in particular, you know, even if they were doing thems- themselves, 'cause then the consumer is, is in the actual funnel, sort of lurking there on the verge of subscribing.

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And if you, and, and if you l- think about the, you know, the lifetime values of subscribers, you would need to off- if, if just one subscriber decides, "Nah, I'm gonna, you know, buy that article for, uh, a couple of cents instead of subscribe," then you need a lot of micropayments to offset that, that, uh, you know, that lifetime value.

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So that's, like, like, also the difference. There, uh, there a person is actually in the funnel, you know, on the domain of the publisher. In our case, we're, I mean, we're third party.

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We're so, sort of far away from the publisher. Yeah.

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So are you licensing the content, or is it, like, a rev share based on, like, the amount of their content that is consumed on the- Y- yeah, I can't get into the exact, uh, exact, uh, sort of economics of it, but, but we- Oh, come on.

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No, that's where the- [laughs] That's where the [laughs] that's where the magic is. I think, yeah, of course.

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Is that, I mean, 'cause the reason these- But, but I think, I think- I'll just be like, honestly, the reason these models fail- Yeah... is because of the economics, is getting the economics right on these things.

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Like, there's lots of stuff that makes sense in, on paper. And, like, I'm like- In- I'm like, "Yeah, of course." Yep, no. "Yeah, why wouldn't you want that?" [chuckles] Totally, totally.

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No, no, I mean- And then the money gets involved, and then it's like, "Oh, that's why." [chuckles] Ex- e-exactly.

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No, I mean, they, I mean, we, without, without, you know, getting into exactly how we are paying, I think, you know, you would ask, to ask, you know, publishers about th- that.

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We are obviously licensing it, but I can't, I can't tell you exactly how, how, uh, how we are. But I think the, the economics, yes, but I think it's also about the- But not all of their content.

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You're saying that, like- No, no, no. Exactly, exactly, exactly. There's, like, a, a portion of The Economist isn't, is, is, is going to be available through this app in a curated bundle and stuff like this.

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But, like, I'm an Economist subscriber, right? Like, I, I even get the magazine. It's downstairs, I think, right now. But, like-I can't, I can't substitute that obviously on Informed, so I would- No...

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I would guess that, like, a small percentage of The Economist is av- available. E- exactly.

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Well, we on- we, we only, uh, we only have access to and we only use, you know, signi- you know, for, for fractions of the content that, that the publishers, uh, publish.

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And if you are a subs- direct subscriber, you know, you, uh, you should stay, and you would want to stay as a direct, uh, direct subscriber 'cause we're not a substitute to that. Mm.

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We target a different target group, people who are not... Like, literally, we, you know, we, uh, like to...

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People who are not, you know, very far from [chuckles] being like news, news junkies, people who, who, uh, you know, see news, reading news and consuming news as a, as a ne- more of a, of a, of a necessity.

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But getting back to the, you know, getting back to the economics, I think it's also, in almost all cases regardless of, uh, of if we're talking music or if we're talking, you know, Informed here, uh, it's also about, about scale.

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Because the economics, I mean, and, and maybe for, for most startups, economics only work at, uh, at scale.

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And I think that was obviously also one of the, you know, Spotify's challenges, growing, growing, growing so fast that it worked, and I think it's the same thing for us.

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I think it's, the question is not so much about will the economics work, I think the question is rather will we, you know, how will we be able to grow, you know, big enough for it to work and for us to be re- you know, relevant to publishers and consumers and ourselves alike.

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Yeah, yeah. And I wanna get to that 'cause it's a two-sided challenge, and I think that there's, um, yeah, there's a lot of...

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I think there's a lot of instances of, of the, of these things not working because there, there's... I mean, starting anything new is, is hard, right?

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But starting something where you've gotta, you've gotta basically have a B2B business where you sell into publishers, but you also need to build a consumer brand, and that's, like, pretty difficult, particularly in, like, massive markets like the...

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I mean, massive markets are great, but they're also challenging to build consumer brands. You know, I saw that with, like, I remember, remember years ago with, like, Blendle and stuff. Yeah.

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And I was like, okay, that works in the Netherlands, but not to be, like, too American about it, but, like, how are you going to make [chuckles] this thing work in, in a country of 340, 350 million?

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I don't even know if we know how many people are here at this point. Um, very difficult proposition.

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But let's just stick on the, the publisher's sake, 'cause I do think it's, I think it's, like, important to, to figure out, like, how, how it ends up working for the publishers themselves, right? Like, because,

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you know, they don't wanna create channel conflict, right? And I get that you're saying that, like, these people, they don't subscribe and stuff like this.

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But a lot of subscription programs, as they've have matured, they basically have become de facto, in my view again, they've, they've had a de facto micro payment scheme involved, and that is with the, the, the $1 offers and stuff like this.

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They wanna get people into a, into their, into their funnel. And those people, in essence in my view, are basically paying for a piece of content.

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You hit a paywall for a story, some sort of viral story that, like, New York Magazine has or something like this, and, and they, they have a dynamic paywall and they know it.

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They, they hit you with, with it, and it's a dollar, right? And so the, the wager ends up being, like, you're gonna forget and you're gonna get whacked with the full, you know, whatever, New York, it's, like, 20 bucks.

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You're gonna get the f- you're gonna get after the trial period. So I wonder, like, how, how do you... Because, like, it, it... I understand what you're saying, that it- Mm-hmm...

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it isn't, like, a conflict with their, their overall subscription programs, but I feel like the way a lot of particularly news companies have structured their, their subscriptions because they have hit a wall, is that they're really dependent on what, to me in essence- Mm...

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on a consumer side, i- is like a micro payment. I mean, like- Mm... if you're paying a dollar for a product that is a $350-a-year product, it's, like, very strange. Yeah. Anyway, uh, I don't...

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Has, has that ever come up?

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Yeah, I mean, I mean, first, first of all, the publishers that we work with are, you know, pre- predominantly British and American publishers, whereas our audience is, is, is, you know, core Europe, continental Europe.

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It's, you, you know, people- Yeah...

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people in Europe who are, uh, you know, f- fluent English speakers, very interested in, in, in also then, you know, international news and so forth, but, but then who are, who would never, ever, you know, subscribe directly to then a British or an American publisher.

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In many cases they've never even heard of the publishers that w- that, that we have. So they're very far from being in their f- in, in their funnel or having been in their funnel and, and so to speak.

136
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And, but, and sure, I mean, there are obviously many, uh, I think as in all sort of, you know, mature industries, there are many different ways of distributing a product and selling, and I'm sure you can, you can segment it and say that you have core, you know, core subscribers that have, you know, will always subscribe.

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You have, uh, people who are in and out, and then you have the, you know, the trial takers that, that jump on every trial and, and, and whatever.

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And then, but then I still think that there's a sort of gulf between them, because they're actually shown, like, real intent to, to, to, to subscribe to the rec- uh, publisher, and the ones that then use, uh, an app like Informed.

139
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Yeah. So let's g- let's talk about the consumer side, because you're gonna, you're gonna focus on

140
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sort of people outside of the US market or, and the UK market that are obviously fluent, [chuckles] like, in English and, and, and regularly consume content in English. For now at least.

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I mean, our goal is obviously to make this, uh, to, to, to- Mm-hmm... you know, to, to, the- Yeah... into, into, uh, into a product that works for, for publishers.

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Because if it doesn't, then, you know, it makes no sense. Yeah. So that's why we, we decided to start- And that's an easier sell to publishers, right? Because, like, you can't, you can't make...

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Like, the reality of, like, having, like, I think what's amazing about digital media is, like, you can have, like, a global audience. Like, I have, like, a Substack and, like, uh- Yeah...

144
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people in 138 countries read it and stuff like this. Yeah. It's, like, amazing, right? Like, I haven't, like- Yeah, yeah... I haven't broken through to Mali yet, but I will. [laughs] And, like-That's great.

145
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But the reality is, like, you know, if my sponsors are asking, [laughs] like they don't...

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Most of them don't wanna, most of them don't wanna r-reach, you know, people in some of these markets, and I feel like any publisher, you know, you've dealt with that.

147
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[gentle music] Like, sometimes you're like, you're just hoping that they don't, like, ask about geotargeting because, like, you know, 45% of your audience is outside the US and they only sell in the US.

148
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And then with subscriptions, markets are, are different. And I know, you know, with my last company, you know, we would change the subscription price in places like the UK because people [laughs] were- Mm...

149
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wouldn't pay as much. And people in Sweden, God bless them, they would pay, like, even more. So I think it's, like, good be...

150
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You know, I, as far as, like, starting out early because, you know, this is a pain point for publishers of making money off international audiences. No, yeah, exactly. I mean, and as I said, we...

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Well, I mean, we started out actually thinking more about, when we started the company, me and my two co-founders, we thought more about the publisher perspective, 'cause one of my co-founders, Martin, you know, he's a former journalist and was head of digital at a large German, German publisher.

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So we, we actually came more from that per- that perspective in terms of how...

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And, and, uh, you know, w-w-well, the company was, was founded during the sort of, you know, end tenure of, uh, of, of, of, of Trump and COVID, which was a very turbulent time, it's time in, in, in news.

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So with, we, we know, we, we wanted to create the product, uh, y-y-you know, to, to help sort of monetize great, uh, great journalism.

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And as mentioned, that's why we also then, you know, carefully started with working with E-E-English pub- speaking publishers, British and American publishers, but focusing the curation on a European audience and targeting a, a European audience.

156
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And then, and, and to see, and our hypothesis was that this is going to work, this will be incremental revenue.

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And as of now, that hypothesis has proven true, and then we will gradually try to sort of expand this, but obviously will all, it will only work if it is truly incremental revenue.

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It will never work if there's even, like, the slightest risk of sort of, uh, you know, cannibalization. But that's not...

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Yeah, but we're confident that this is, like, a very different, different product, different type of distribution, and that it is a different, um, different consumer, so... Yeah. So which markets are...

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Because, like, I think, you know, with- within, let's just say, Europe, within Europe, like, there's, there's broadly, like, a north-south divide when it comes to subscriptions.

161
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Although, again, the UK is a little different in that, like, m- markets like, like Germany, and then particularly the Scandinavian markets, are far more likely to subscribe than, than a lot of southern European markets.

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There's not much of a, of a, of a habit of paying, I, I believe, for content as much in, in many markets. And so are you... Like, I was just going to the, the Reuters figures. Eh, some of them are...

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You know, but you look at, like, Norway and stuff like this, and, like, 53%, like, subscribe to a local publication. Yeah. I mean, that's amazing, right? [laughs] Yeah.

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[laughs] You go down and, uh, uh, I'm, like, going down to, like, Portugal. It's 3. You know? Yeah. Like, I mean, it is just, like, very, very different, like, propensities. Yeah. No, totally.

165
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I mean, I'm looking at the numbers here. So I mean, our largest market is Germany. Not that surprising. It's where we're based, where, where- Yeah...

166
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I mean, I am actually from Sw-Sweden originally, but where my two co-founders are from.

167
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And, and, and, uh, and, and, you know, so Sweden is also punching above its weight in terms of, in terms of the market, and I think that's due to two things. One, as you said- Yeah...

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it's a country where, where people pay for news.

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But two, it's also, and, you know, no disrespect to the Norwegians, Norwegians also pay for news, but Sweden is a bit more, uh, open to the world, and I think Swedes are a bit more interested in international news.

170
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So for this, you know, so I'm not surprised that then- All right. We're getting a little- You know... Scandinavian on Scandinavian violence here. Exactly. Like it. Exactly. Exactly.

171
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And then the German- [laughs] The other German-speaking countries, you know, Sweden, uh, you know, sort of Switzerland, Austria, are also up there. You know, it's...

172
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But, you know, also to our surprise, Italy and France, and I mean, I've worked with, as you said, as you said, I've worked with subscriptions, you know, Spotify as well.

173
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So I, you know, I'm, I'm well aware of which countries are where people, you know, tend to subscribe and do not tend to subscribe.

174
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So I mean, the Ger- the German-speaking world, uh, the Nordics, but also Italy and France are, are, are some of our largest markets. Yeah. So how are you gonna deal with... 'Cause I've, I've seen a lot of...

175
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The distribution challenge is, like, a major issue. It's for any, any sort of consumer startup, right?

176
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And so, like, solving for the B2B challenge, which is getting the economics right with the publishers, even if the economics, like, really will on- you know, they really will only make sense, like, if you hit scale, right?

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Yeah. Like, I mean, for, for publishers, like, you know, a lot of times, like, a lot of times people will talk about incremental.

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I joke about incremental a lot because it usually means, like, pretty insignificant to, like, near zero a lot of times.

179
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[laughs] But, like, for this to really become, like, a meaningful part of a, a publisher's business model, like, it's not gonna be the majority ri-right? But, like, a nice revenue stream. You guys have to hit...

180
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Like, what kind of scale do you need to hit for this model to work? Uh, I think depends on how you define work, but I think we definitely, we do, we do not need a scale that is y-y-You know, unachievable, so to speak.

181
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So I think we, we, uh, uh, we- we're very confident that we will be able to grow into, you know, the numbers. As any startup, we're obviously starting out, you know, funded by venture capital and unprofitable.

182
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That's, I mean, that's just how you start out. And then, you know, and then you need to grow, and- and- Yeah... and- and, uh, you know, then eventually, uh, use your own cash flows.

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And, and, you know, and we- we're, we're definitely on track to growing that, and I think we have the benefit, uh, you know, it's not a super crowded market.

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I mean, we, we very much see ourselves as a consumer subscription app. And if you look at consumer subscription apps in other categories, you know, take meditation or whatever, it's super crowded.

185
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They're, they're not, I mean, uh, uh, they're not that many startups in- in- in- in our space, which then also helps us on paid advertising.

186
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I think we will be able to do paid advertising in a much more efficient way than others. And, and, uh, you know, news products are also pretty social.

187
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I think they're great for- for- for word of mouth and for- for- for, uh, for organic growth 'cause it's something you, you know, you- you, uh, you talk about, uh, whereas other consumer subscription products might be- Yeah...

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a bit more, more private. So, like, I mean, like I'm looking at the figures, like in Germany, let's- let's say 8-8% subscribe to a foreign publication. Uh, impossible to know.

189
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I mean, this could be like Austrian, that could be Swiss. How do you look at like the, the total addressable market?

190
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Like, 'cause I mean, I guess I would look at that and be like, are you trying to get a slice of that 8%, or is your bet that that 8% should really be about 15% when you look at the number of people who are fluent in English or comfortable and like use English li- uh, regularly at work or so?

191
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I don't know how you decide- Yeah... on what the total addressable market is. I mean, to be totally honest, we haven't looked at it in that much detail.

192
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We started this company, uh, because we, you know, we- we- we want- wanted to build a great news product for consumers and because we wanted to build a pro- like a company and product that can help, uh, you know, you know- Mm-hmm...

193
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drive money to quality journalism. But, and, and I- I, to answer your question, I would rather, if we would've [chuckles] looked at it that way, I would...

194
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we would have rather looked at, you know, what is the- the proportion of the population that, uh, you know, it, well, can read English, so to speak.

195
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Because I think also, and that's also been, you know, proven itself when we've interviewed our subscribers, these are not people that normally subscribe to, uh, subscribe to or pay for news.

196
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So it's a little bit of a diff- different category. And we, I mean, we also, we see ourselves also very much sort of as a, in our DNA as a consumer subscription company.

197
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And that's way how, that's how we, how we distribute ourselves. And that's how we... Yeah. So I think we're reaching a lot of people who- Yeah...

198
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uh, uh, you know, who are not part of, if you would read a, you know, read a report of the size of the market, who would just not be in that, in that definition.

199
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Okay, so within like a market like Germany, you think you can expand the number of people who would pay for access to like non-German news content, but these people already are, have a propensity to pay for news content.

200
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'Cause I think, I think one of the, the major questions is how do you expand the number, the, the absolute number of people who will pay for news content?

201
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I think the number of people who pay for news content now is far higher than I would've expected it to be. I can remember- Mm...

202
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you know, early on with The Times have, doing a podcast with, uh, Meredith Levine and being like, "How are you possibly gonna get to 10 million, like, news subscribers? There aren't that many people who...

203
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There literally aren't that many people who pay for news." And she's like, "We have to grow the market."

204
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[upbeat music] I wonder, uh, does this, and do these kind of things, do they grow the absolute market for the number of people who are paying for news, or are you just targeting the people who already have that propensity?

205
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I, I think we, I think we, and I mean, this is based on the, on the, on the, you know, consumer sur- on the surveys and interviews we've done with our subscribers. I mean, w- we're just starting out.

206
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We started in November last year. But based on that- Yeah... uh, empirical data, we are expanding the, expanding the market because again, w- we ask them, "Have you paid for news? If so, what have you paid for?

207
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Do you currently pay, pay for publishers?" And, like, literally none of them pay for, that we have, pay for English-speaking publishers.

208
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Some pay for, you know, German-speaking ones, and some have, you know, taken a trial or whatever for some English-speaking publisher in the past.

209
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But these are, until now at least, you know, obviously that might change, but for until now, these are people who, uh, who, uh,

210
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have, have, are not and have not paid for English-speaking news before, and for some reason think that Informed is worth, uh, worth paying for. Got it. What are you gonna charge?

211
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So yes, we're charging in- in, in 59.99 euros for the annual plan and 7.99 for the monthly plan. So it's like broadly...

212
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I mean, it's not like, you know, I mean, like, uh, uh, FT and The Economist are, are super expensive and stuff like this. So it's, that's like what? Like 80 bucks or so? I guess- 80 American dollars...

213
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so, or I think, I mean, isn't it- I don't know. I've been keeping up on exchange rates. I think, yeah.

214
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There was a wonderful moment like last summer when they were the exact same, but, um [chuckles]- They are the exact same... that was great for us.

215
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They are, they, they are, they, they are, they are- All, all of New York was in Italy. I think half of Italy last summer was actually people from New York with, you know, a strong dollar. They, they are, uh- Uh...

216
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on pari now as well actually, so I think you can go to Italy again. Yeah, yeah. Oh, okay. So it's still...

217
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[chuckles] So this is, uh, yeah [chuckles] if you go back, hey, Italy's always great.But how did you arrive at the price point? And I know it's always like a, a, a mixture of things, just because, like, it's substantial.

218
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Like, people are making, like, a real commitment at that level. I mean, we see a lot of people, you know, and I don't understand, the numbers just simply don't work with, like, you know, $20 subscriptions- Mm...

219
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if you're gonna be creating original news content. I don't know, how did you arrive at- Yeah... the proper price point for this, this cohort? Yeah, I mean, we, we, we did a lot of research.

220
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I mean, looking at other consumer subscription apps, their price points, et cetera. We also interviewed and did price- did a lot of price surveys. Obviously, also looked at our economics. Where does the price need to be?

221
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But our consumer is also d- fairly affluent person, I would say, because I think it sort of correlates. If you have an interest in, you know, uh, you know, e- enough interest in international- Yeah...

222
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news, there is, you know, m- most likely you're, you know, you have some money to spend at least. People now obviously also...

223
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I mean, when, when I started out at Spotify, there were very few people who ever paid for, you know, p- paid for things online. But I mean, I think it has changed a lot- Yeah... obviously as well, so.

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I've always wanted to do the, the, the... You, you can take this idea. The, the exact opposite of this, this app, which is for monolingual English speakers to bring the viewpoints of, like, the rest of the world to them.

225
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So, like, when you look at, like, with AI and, like, uh...

226
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We already see, like, you know, p- places like Der Spiegel starting to, like, publish in English and stuff like this because the, the, you know, English is, is the l- the sort of, you know, it's the common language of- Yeah...

227
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of, of people out there, uh, these days. Yeah.

228
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And I always thought that that would be, like, a very interesting thing because we don't get the perspectives of those of us who aren't fluent in other languages, don't get the perspectives of the rest of the world for the most part, just f- simply because of that fact.

229
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I just don't know if the market would be big enough to- Yeah. No, I think it's, um- 'Cause I mean, look at, like, d- translation has become so much cheaper and [sighs]

230
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I- I- No, exactly, and here in Europe, there have been, been, uh, you know, attempts to do things like that, where you c- where you could get, you know, news from great publishers all translated into, into, you know, your language of, uh, choice.

231
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I think it's pretty cool and it...

232
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But I think, but I wonder from a, from a business perspective, I think, yes, you know, I w- I'd be very curious what does the world, you know, what does Spain think about, you know, Germany delivering or not delivering tanks to the Ukraine?

233
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What does, uh, you know, France think about that? But after you've still that initial curiosity, maybe you're not that interested. And then lastly, I mean, we've also obviously- Yeah, sure...

234
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when we started, started out, when we started out, we also obviously thought about, like, translation and so forth. But the fact is that, um, human translation, to translate an article is extremely hard.

235
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It's almost as hard as writing the article anew, uh, if it has to have, uh, top quality, and then that means that it costs. And, uh, I mean, that will obviously change, but machine translation is not...

236
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It's not there yet. So there's always this little ex- you know, little- Yeah... sort of the last, uh, the last, you know, mile or whatever, last inch, it, you know, has not been good enough. Yeah.

237
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So that's always been the, been the dilemma. But obviously- Yeah... you know, eventually that will change. Yeah. I mean, you look at, like, the insane AI Bing and, and ChatGPT and, like, it's gotta get there.

238
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I mean, if they're, if they're, like, you know, writing these things, I mean, I know they're just, like, pattern matching and stuff like this, and they're, they're just saying, "Well, which word is most likely to come next?"

239
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They don't truly understand what they're, what they're, uh, typing. But I would think that it's, it's, it's around the corner. Yeah. True.

240
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Okay, so the last thing is, like, how would you describe the differences in this approach versus something like Apple News+?

241
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Because this is one of those things where I've always felt, like, there's an obvious consumer need and there's an obvious publisher need. And so I'm just like, "It has to be figured out at some point."

242
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I don't know, I don't know when it will be figured out and what the actual combination was, and I was always thinking, unfortunately, the people most likely to figure it out [chuckles] are platforms.

243
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They have, uh, they have relationships with, uh, a massive, uh, with everyone who would be in, in such a, a, a market. They already have credit cards on file.

244
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They have all the advantages in the world to be able to make this thing work, except for the fact that, like, they're, they're, they're, they're involved in AI wars that might, like, you know, doom humanity, so they've got other priorities.

245
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[chuckles] That is true.

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But I mean, I worked at a, at a s- at a little music company founded, uh, you know, close to the polar circle, and everyone laughed at it and said, you know, "How is this company ever going to, uh, be successful when you have these platform companies that have established relationships and that, you know, have more cash than- Yeah...

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you know, some large European countries?" Uh, and yeah, I mean, and it's, you know, reality played out in a different way. So I think, I don't know. I mean- Yeah. Focus is a, is, is- Yeah. Well, that's what I mean.

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Like, focus is, i-t is the, the equalizer, right?

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Like, I, I can remember just, like, as a reporter over years, like, meeting with, you know, startups in, like, advertising technology or something like this, and it would always be, "Well, why wouldn't Google just come and do this and, like, eliminate you?"

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Mm. And it was always like- Yeah... Google's trying to put, trying to do, I guess at the time, like, flying cars and stuff like this. They've got a lot of other priorities [chuckles] that then focus can...

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But, like, what do you think, like, how would you say the approach is different than, like, Apple News+?

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So I mean, I, since, since, since Apple News+ doesn't exist in Germany, I haven't, uh, I haven't looked at it that much. But I think from us- Oh, yeah...

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from a, from, from product point of view, we are very focused on human cur- uh, curation. I mean, regardless of what you think about that business model-wise, we have editors that curate, uh, curate, uh, the news. Yeah.

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Because we think that w- we personally think that that's the, you know, that's how you create quality, and our, and our users, uh-They, they want humans to curate the news for them.

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Uh, I w- I would assume that Apple News Plus is, is very sort of machine curated, and I think that's also...

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I mean, again, as, as I said, one of my co-founders, Martin, he's a former journalist, and I think, you know, w-without- Yeah...

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disrespect to anyone, I think a lot of people who try different, build different produ-products like this in the past have not had, like, the craftsman-man view of how to build a great news, news product because it has to y- you know, the articles that you curate, there has, there has to be sort of a pattern.

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It has to, it has to fit, fit together, and if you... I mean, for now at least, if you just do it, uh, you know, uh, algorithmically, you know, it, it doesn't always end up having the same quality.

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And personally, I mean, I want, I wanna read, I mean, call me, call me, call me old school, but I'll, I'll, I wanna read news where I know that there's a human and not a robot that has, [upbeat music] uh, has put some thoughts behind it.

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Okay. Let's see. You probably could have raised, like, 500 million if you said it was, like, an AI-powered, like, news curation app.

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[laughs] Pr- pr- probably, and I think probably, and I think there are a lot of things that we can do with AI as well, and I think there are a lot of stuff we can do- Yeah, yeah...

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on our, on our, on our back end to automate and to facilitate the, the, the, the processes. Have you checked out Artifact yet?

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Artifact is, it's a personalized newsfeed that uses machine learning to understand your interests and will soon let you discuss those articles with friends. Yeah, yeah.

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No, that's something- I was just playing around with it, yeah, uh- Did the-... last night for the first time. Absolutely. I don't have a, an informed opinion yet. I still need to play around with it more.

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I mean, I think it's exciting that, like, people are again innovating in this space 'cause it's needed. But any, like- No, totally... initial thoughts on it? Uh, no, not really.

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I think it's quite, it's, it's, I think it's a quite different type of product, so I think, uh, you know, as a user you can- Yeah... you can use, uh, both.

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And I think it's, again, I think it's super cool that, uh, you know, some of the most talented people in tech are focusing on, uh, news. Uh, and, and, you know. Totally. All right, Axel, we're gonna leave it there.

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Thank you so much for, for doing this. I know we got, we got through the wonky Berlin Wi-Fi. It's good. We did. We did. Thank you, Brian. Thanks for your time. [upbeat music] Thank you so much for listening.

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Again, please do send me, uh, your feedback. Uh, my email is bmorrissey@therebooting.com. Thanks a lot to Chase Sparks, who is producing this podcast.

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If you're thinking about doing your own podcast, and again, they're hard to grow but the depth of engagement is amazing, so don't let that scare you off, get in touch. Jay can help you out.

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He is at podhelpus, that is podhelp.us.

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