Friday, 10 March 2017

Blendl in trouble, needs to switch to white-label business model

Blendl is in serious trouble. A change of business model may be the one and only cure.

Blendl is a Dutch-based internet firm. It started a few years ago amassing newspaper & magazine articles and selling access on a pay-per-article basis (35 c/article). This created extra income for the media industry and served as a valuable add-on for consumers.

In December it launched Blendl Premium, at 10 €/month, giving access to 20 articles/day from 120 participating newspapers & magazines.

From add-on to replacement

Now, the NRC newspaper announced that it will quit the service. This could potentially signal the end of Blendl, because its articles presumably served as a strong pull for subscribers. And other publishers may follow.

The reason it provides for quitting Blendl is straight-forward, even though the medium-term impact of Blendl Premium is grossly overstated: 'not good for journalism' is too much credit for a service that is 100% dependent on participating publishers. NRC justly claims that it simply earns too little from participating (€ 0.2m in 2016, or the equivalent of 400 subscriptions on a total base of 240,000).

The real reason is this:
"Met deze premium-versie besloot Blendle namelijk om niet langer een aanvullende dienst aan te bieden waarbij je losse artikelen koopt, maar ook zelf abonnementen te gaan werven. Daarmee wordt Blendle in plaats van een elektronische kiosk ook zelf een uitgever."
By offering Blendl Premium, the provider changes from being an add-on to being a replacement service.

White-label add-on service

Blendl seems to be in serious trouble. It's a great service for consumers, who can actually quit all their subscriptions and fully rely on the service. After all, 20 cleverly chosen (personalised) articles a day must be enough for the vast majority.

So what next? How to turn Blendl back into an add-on service? How to prevent subscribers to quit their subscriptions once they start taking Blendl Premium?

The answers may be simple. Blendl should end its direct-to-consumer service and white-label it to publishers. Newspapers & magazines could sell it as an add-on, for instance NRC Blendl, providing access to all participating publishers' articles for, say, 8 €/month - except NRC articles. NRC Blendl would be a subscriber-only service: you quit your traditional newspaper/magazine, then you also lose your Blendl service

Details need to be worked out, such as pricing, number of articles, access to which publishers. But it looks like a sound way forward for Blendl.

No comments: