Zette—the Spotify for News

Over the past 25 years, the newspaper industry has undergone a significant transformation due to technological advancements and difficulties in securing capital. According to the Pew Research Center, weekday newspaper subscriptions in the US have dropped from 62mn in 1990 to 31mn in 2017. Although digital advertising revenue has grown, it has not been enough to make up for the decrease in print advertising revenue. The uncertain nature of the advertising revenue model has led publishers to look for other sources of income, such as paywalls.

The Paywall Dilemma

While paywalls are gaining popularity among news websites, most consumers are still reluctant to pay for online news.

A survey by the Reuters Institute for the Study of Journalism reveals that only 20% of Americans pay for digital news, and of those that do, the majority subscribe to only one brand. This begs the question: which news outlets are audiences willing to pay for? The top spots on the list are held by The New York Times, The Washington Post, and The Wall Street Journal.

Furthermore, less than 0.5% of readers who hit a paywalled article actually subscribe to most publications. The main reasons for this reluctance are cost, subscription fatigue, and inconvenience. Additionally, almost a third of new subscribers to some news publications cancel within the first 24 hours, often due to dissatisfaction with the full paid experience or a desire to access just one article.

Zette - A Unique Solution

Zette addresses the common pain points faced by both consumers and publishers. With Zette, users have quick and easy access to hundreds of publications without having to remember a long list of usernames, passwords, or credit card information. This seamless integration increases readership for publishers, providing them with an opportunity to convert visitors into long-term subscribers. Additionally, Zette offers pay-per-article access, catering to the needs of those who only want to access a single article. This eliminates the need for cancellations and provides a more flexible and user-friendly experience for consumers.

Overall, Zette offers consumers a convenient, streamlined way to access multiple publications with one account. For publishers, Zette provides a new opportunity to grow readership and revenue. With the increasing popularity of paywalls, Zette's innovative solution is well-placed to capture a growing market.

Buisness Model

Zette offers three tiers of pricing: Light Reader ($9.99/mo), Daily Reader ($19.99/mo), and Avid Reader ($29.99/mo). Each tier provides a different number of credits, which correspond to the number of paywalls that can be removed. The unused credits can be rolled over to the next month or additional credits can be purchased, depending on the usage. Zette aims for a 50-50 revenue split with its publishers, ensuring a win-win situation for both parties.

Zette has already signed licensing deals with over 100 premium publications, including Forbes, McClatchy, Haaretz and New Scientist.

Market Outlook

The trend of paying for news online is continuing to grow, with more and more people subscribing to multiple sources. The COVID-19 pandemic has had a major effect on media consumption, emphasizing the importance of reliable news sources in distributing accurate information. According to Statistica, the digital newspapers and magazines market size was valued at $35.60bn in 2022 and is estimated to increase at a CAGR of 2.73% from 2023 to 2028.

Competitors

Zette faces competition from other subscription-based services such as Apple News+, which bundles stories from hundreds of publications, and pay-per-article alternatives such as Blendle and inkl, which allow publications to charge microtransactions for one-off articles.