The press industry has been going through some changes since the introduction of the first newspaper in the 17th century. Radio and television, introduced from the 1920’s onwards, were used as new communication channels. Traditional newspapers cannot keep up with the market due to an acceleration of the information flow and the availability of more communication channels. Customer needs have changed. A lot of information is available online for free. Online start-ups are popping up both competing and collaborating with the traditional newspaper companies. Two of these start-ups will be discussed: Blendle and Maggy. Both offer online versions of magazines, newspapers and/or separate articles.
Blende uses an online platform and an app to distribute separate articles to its 1 million global customers. Through a differential pricing strategy called versioning, they offer the customer to select the articles that they want to read for approximately 20 cents per piece. If customers dislike the article, they can get a full refund. The platform has attracted global investments by the New York Times and Axel Springer SE for 3 million dollars.
Maggy is available as an app. It is very recently founded, in January of 2016, and its user number has just reached 3000. With a one-price-fits-all model, their users pay a monthly fee of €5,99 and get access to all of the available magazines. Financing is done through crowdfunding via Leapfunder. People fund them with loans and these are later converted into shares. The target amount for the crowdfunding is €150,000. The app is, at least for now, only available in the Netherlands.
When comparing the strenghts and weaknesses of Blendle and Maggy, several differences are found.
Blendle:
Strenghts
- The opportunity to select and buy single articles
- The collection varies from entertainment topics to articles on current affairs
- Blendle’s content is viewable with smartphones, tablets and online
- Already a leader in the market, better market position
- Caters to high-educated audience because of intellectual content
Weaknesses
- Buying single articles could end up in spending more money, more than if a subscriber would stick with one magazine/newspaper
- Not a pre-fixed amount of revenue
- Privacy issues due to storage in the US instead of in The Netherlands
Maggy:
Strenght
- Fixed prices and thus fixed revenues
Weaknesses
- Only a mobile phone application
- Just entertainment articles, no current affairs
The industry has changed significantly since the launch of Blendle and Maggy. Publishers were not able to keep up with the changing customers’ needs, such as the need for personalization and adaptive pricing. Ever since, Blendle and Maggy serve as a mediating party, while reducing the costs significantly compared to the ‘old’ model. However, this also clears the way for free media platforms to enter the industry, meaning that the overal rivalry has increased between all parties. Pusblishers are currently trying to maintain their buyer bargaining power, by not giving to much potential to these new entrants, and to raise their customer base. The publishers’ dominance may lead to future transformation within the industry.
References
Shapiro, C., and Varian, H. 1998. Pricing Information. In Information Rules: A Strategic Guide to the Network Economy. Cambridge, MA: Harvard Business School Press.
http://www.telegraaf.nl/digitaal/23157231/__Blendle_biedt_hele_kranten_en_tijdschriften__.html
https://blendle.com/signup/kioskhttp://www.maggy.nl/https://medium.com/on-blendle/pay-per-story-platform-blendle-goes-live-in-germany-37b53dbf360b#.usiz3w3nm
http://www.wsj.com/articles/new-york-times-axel-springer-invest-in-dutch-startup-blendle-1414408997
https://www.nrc.nl/nieuws/2014/04/28/blendle-is-er-vijf-vragen-over-de-concurrent-partner-van-kranten-en-tijdschriften-a1425423
http://www.historicpages.com/nprhist.htm
http://www.localhistories.org/media.html
http://www.marketingfacts.nl/berichten/uitgevers-verhinderen-dat-blendle-een-echt-succes-kan-worden
http://www.mt.nl/604/87419/gamechangers/de-3-grootste-uitdagingen-voor-blendle.html
