At the Oct. 8–9 World Publishing Expo in Berlin, Germany, Mary L. Van Meter, publisher of News &Tech, caught up with the founder and CEO of Flip-Pay, Paul McCarthy-Brain. Following is a discussion of the next generation of content monetization technology and the launch of his company.
N&T:Tell us about Flip-Pay and how you decided to start the company.
McCarthy-Brain: Our business started as an R&D project to examine the challenges facing digital publishers in the face of declining ad revenue and a customer base unused to paying for content. Initially our focus was with micro-payments, digital wallets and understanding why the internet was littered with the corpses of failed attempts. Our first job was to understand why they had failed before we started to construct new technology. It turned out that it wasn’t a payment issue at all.The problem was actually an identity management issue. In order to get people to pay frequently, you need to make it completely frictionless. No forms, no registration, two click-access to content. On mobile, this translates to verify with an existing ID and hit the Apple Pay button. Our entire business focus has been around making it simpler for the consumer to give the publisher money.
N&T: How can a newspaper benefit from content monetization technology?
McCarthy-Brain: Although Flip-Pay started its life as a micro-payment play, it became apparent very quickly that we needed to also include full subscription management functions into the platform. Because of the unique way in which our technology was architected, the publisher now has an incredible level of functionality available to them in comparison to legacy paywall solutions.
In Flip-Pay, a publisher can offer standard subscriptions, day passes, ad-blocker charges, but at the same time sell access to bits of premium content to new market segments. For example, a newspaper might have incredible college football coverage and can sell access to this content directly to the consumer for the duration of the season. This package can then be pushed down social media channels to attract new readers to your content.
It is also perfect for individual billing of video, podcasts, box sets, series or content categories. The most important element to take away from our platform is that it empowers the publisher to create new market segments and revenue opportunities.
N&T: Why is your company having success with content monetization tools?
McCarthy-Brain: I’ve launched large scale complex systems before and integration was always a challenge. Huge amounts of documentation, endless project management meetings, difficult to install, support and maintain.
At the outset of Flip-Pay we made the platform quick and simple to integrate with a publisher, their existing BI (business intelligence) tools and suppliers.You can be up, running and testing the Flip-Pay platform in a couple of hours and monetizing shortly after that. We take the complexity and risk out of the deployment.
The platform also has full analytics, reporting, customer service help-desk systems, A/B testing (creating two versions of a page to measure which campaign is the most effective), API (application programming interface) integration and more. Everything that is required to run an operation like this, plus our team are iterating the platform daily. It reduces costs for the publisher, simplifies operations and most importantly drives new revenue into the bank account.
N&T: Why have paywalls failed in the past?
McCarthy-Brain: There has always been an expectation that digital publishers should give their premium content away for free and be ad supported.This has led some publishers to focus on impressions and thus a general lowering of content or perceived value of that content when a viral headline can boost metrics. Simply asking for money for this content doesn’t work as the consumer sees what is in effect, click bait.
The reason why The NewYork Times, Washington Post, etc. have success with subscriptions is that their content has intrinsic value. Paywalls are on or off, you have access or you don’t. With Flip-Pay you can up-sell content from within your freemium estate — there is no on-off just a series of sales opportunities to monetize the consumer, then up-sell them some more. Paywalls are too restrictive and this is the problem we set out to solve.
N&T: What is the future of paywalls and content monetization?
McCarthy-Brain: Natural language processing, graphing databases and machine learning. Flip-Pay built a recommendations engine based on NLP that ingests the content produced by the publisher, identifies people, places, events, brands, items and key words then places this in a graphing database, like that used by Facebook, to measure the relationship between articles. This worked incredibly well. We soon realized that we could pair this data with viewing and purchasing data and feed that back to the editorial staff so they now know what is selling and what isn’t so that could make more of the content that attracted subscriptions/sales.
Machine learning (sometimes referred to as AI, but it’s not) also has a huge role to play in the future of publications. Flip-Pay employs it in A/B testing, to measure the effectiveness of a campaign and to modify it on the fly to alter language and prices based upon demographics, time, historical actions, etc. We are also starting to do pattern analysis on behavioral data to increase the effectiveness of recommendations and the placement of calls to actions.
N&T: What are some of your company successes?
McCarthy-Brain: We trialed the technology in an Irish-based national newspaper and the publisher is now rolling it out to their entire estate covering all national titles and regional papers. This is going live in the next few weeks. We also integrate with iTunes and Google Play for app sales and are building out home delivery systems to integrate with digital bundles.
We are in the process of launching a streaming service for a global sports team as our platform is perfect for creating a Netflix-style system with pay-per-view options.
Now that word is spreading about what we are doing, we’ve also now been engaged by publishers in the Far East and Europe and interest is growing rapidly.
Flip-Pay is a Google Technical Partner and has worked closely with Google on developing our global-scale cloud architecture. This scales on demand and dynamically, providing the publisher with the confidence to know that the system is resilient, secure, fast and will grow with your traffic.
We've also won some awards for our technology, which was a huge honor for us.
N&T: How easy is it to set up?