Dive Brief:
- Business Insider, Fusion Media Group, The Atlantic, MSNBC and Slate are among the media companies and publishers that have joined Scroll, a $5-per-month subscription service that will launch later this year to offer consumers ad-free versions of news sites, The Wall Street Journal reported.
- Publishers receive 70% of Scroll's subscription revenue, which is divvied up among publishers based on how much an individual subscriber uses a specific site, the Journal said. Additional money is also available if a news organization garners 20% or more of a subscriber's attention. If a publisher has a paywall, consumers will still have to pay the subscription fee to that news company on top of the Scroll fee.
- Scroll was co-founded in 2016 by Tony Haile, the former CEO of Chartbeat. Scroll raised $3 million from investors, including The New York Times, The Wall Street Journal's parent company News Corp, German publishing group Axel Springer and Gannett, which publishes titles like USA Today.
Dive Insight:
Many media companies have suffered declining ad revenue over the past several years across channels. On the digital front, the rise of ad-blockers and the fickle algorithms of platforms like Google and Facebook have sharpened the decline, while print subscriptions have plummeted as consumption habits continue to move online and onto devices like mobile phones. While Scroll won't necessarily solve publishers' problems, it could help them sign up more readers looking for ad-free content experiences in a model that emulates something like what Netflix does for TV and movies, letting users pay a flat monthly fee to access a wider library of content in one place.
Offering the same quality of content without the intrusion of ads might help publishers improve the overall user experience and increase readership. These companies could also be tempted to further develop native advertising strategies, since in-house native ads — already a popular format — will still be served to Scroll subscribers since they mirror editorial content, according to the Journal.
The use of ad-blocking software has been on the rise, as consumers view certain ad formats like auto-play video and pop-ups as obnoxious and a detriment to their browsing experience. About 26% of U.S. consumers reported using ad blockers as of October 2017, according to OnAudience.com, which was projected to cost publishers about $15.8 billion in lost revenue, collectively, last year.
Realizing the growing problem, but wanting to make sure ads are delivered to audiences, some publishers are taking matters into their own hands and installing "anti-ad blockers," which detect and stop ad-blocking technology on their sites. Google's newest version of Chrome also natively blocks certain ad formats generally seen as low-quality, and Apple's Safari recently started removing some first-party cookies, which has irked many ad trade groups.
