Sesamy urges publishers to explore opportunities in one-off article purchases
The Media Leader Interview
Acast founders Karl Rosander and Måns Ulvestam are looking to popularise a pay-per-article model in Europe and beyond — and believe they have the tech to do it.
Between the subscription model, the advertising-funded model and some combination of the two, media outlets have in recent years struggled to balance business sustainability with what consumers want. Can a third way exist?
In 2017, Acast founders Karl Rosander and Måns Ulvestam stepped down from executive positions at the podcast advertising company, exiting the board in 2018 and 2021 respectively, ahead of Acast’s initial public offering.
The entrepreneurial partners were in search of their next project and, like many consumers, had become frustrated by paywalled articles and podcasts. They went in search of a solution.
“People can’t afford to subscribe to everything they want to consume. So therefore the publishers are losing revenue and people are not informed,” Ulvestam tells The Media Leader via video call from Stockholm.
Ulvestam believes the paywalling of news outlets has contributed significantly to increased political polarisation, and he and Rosander are passionate about remedying the issue by giving publishers the tools to let users pay to read individual articles.
“If you’re left-leaning or right-leaning, whatever your [political] inclination is, you’re not very likely to subscribe to an outlet associated with the opposite side. However, you might purchase an article one-off to get a different point of view,” Ulvestam explains.
Enter Sesamy. Or open Sesamy, as its founders intended.
The service, founded by the duo in 2022 with a mission to “break open the internet”, offers news publishers and podcasters the data and capacity to open up subscription-only content for one-off purchases.
Sesamy currently has 31 clients — many of which are Nordic (especially Swedish — “It’s easiest to dig where you are,” Rosander chimes in) as well as from other parts of Europe.
The pair are eyeing the UK for expansion and currently in discussions with a major publisher. The US and continued European expansion are also in Sesamy’s plans, with Rosander and Ulvestam explaining that digital-native publishers with expensive subscriptions, such as Air Mail and Puck News, are a natural fit for their business model.
Are publishers on board?
According to Rosander and Ulvestam, the demand from publishers is high. In fact, they claim to have a “long list of publishers wanting to join us now”, to the extent that they are managing “who we can onboard first” rather than hunting for prospective clients.
Sesamy’s entrance to the UK should be a boon for the nascent one-off payment model; while similar companies, such as Axate, already exist, increased competition could lead to improved buy-in from larger publishers.
Professional Publishers Association CEO Sajeeda Merali has previously told The Media Leader that many publishers are “looking at implementing” one-off payments as they seek to diversify revenue streams. This is especially true as, according to Reach CEO Jim Mullen, print titles could become “loss-making” within five years.
Uptake for offering one-off article purchases has nevertheless been slow. If a major UK publisher does successfully incorporate the strategy, though, Rosander and Ulvestam expect others to follow suit — similar to how paywalls were adopted.
The challenge is less about convincing consumers (both Sesamy and Axate’s leaders cite the use of small transactions in everyday life already, such as tapping into the Underground) and more about buy-in from publishers cautious of cannibalising their existing subscription revenue.
A ‘sneaky’ model
Sesamy’s leadership insists it is not seeking to replace the existing subscription business model. Rather, they bill the offering as helping to supply “supplementary revenue” that is otherwise lost by appealing to readers who are unlikely to pay for subscriptions but still want access to specific stories.
The appeal should work, in theory, for international markets as well. An English-speaking reader may have no reason to subscribe to Der Spiegel, but they may find value in purchasing an article of an exclusive story that they can then translate into English.
The average price of articles across Sesamy’s publishers is £2, which grants users the capacity to read the article they wish without, as Rosander and Ulvestam argue, risking cannibalisation. If consumers find themselves reading more, Sesamy can encourage them to move to a better-value subscription tier.
Why digital news subscription price hikes don’t tell the full story
“We don’t see this as revenue that will become bigger than the subscription,” says Ulvestam. “And it’s not even just revenue — it’s a way to get the right people on board that should be subscribers.”
He describes the current subscription model as “sneaky”. Many readers who subscribe, especially those who do so using discounts, are counted on by publishers to maintain their subscription regardless of usage. “That’s not a sustainable way to build a business model,” argues Ulvestam. “In fact, when you look at the data across news magazines, 50% of active subscriptions were not used in the past month. This is a huge risk to publishers, because their customers are not engaged enough to use their service — so why would they pay for it?”
Rosander adds that, compared with the standard strategy of luring potential subscribers by offering a certain number of free articles per month (a model that, he says, converts around 1 in 500 users into a subscriber), those who pay for a single article go on to subscribe at a rate of 5.5%. “That’s 5,000 times more efficient,” he says.
“What we also found is that people who start their customer journey with buying single articles tend to be much more loyal,” Ulvestam continues, arguing that it should be a win-win for publishers because offering free articles to lure in potential subscribers is itself expensive.
Leveraging AI
Sesamy plans to target one-off readers for subscriptions using AI, which could predict the content a user might be receptive to based on their reading habits, according to Rosander and Ulvestam. Currently, for Sesamy’s Swedish clients, when a user goes to check out for their article purchase, Sesamy will prompt them to consider a full subscription.
The company can also use AI for similar targeting with existing subscribers. “You can see if someone is not engaged enough and, based on historical data, we can tell you with a certain probability they will cancel their subscription in the next month based on their behaviour,” explains Ulvestam.
With that knowledge, publishers can choose to send articles the reader may be most interested in; if the reader chooses to unsubscribe anyway, Rosander notes that they always have the option of paying on a per-article basis.
Sesamy takes a cut of all revenue generated by one-off article purchases; for publishers using Sesamy’s whole suite of monetisation options, dashboard insights and AI technology, it also charges a monthly fee. The model is meant to be flexible, so for publishers only interested in trying out one-off payments for access to paywalled podcast episodes, for example, they will only pay Sesamy for what they use.
That will not stop Sesamy from pushing consumers to move from one-off payments into subscriptions, Ulvestam says: “Our business model is if the customers are doing well, we’re also doing well.
“For it to be a sustainable business model, it has to be that way.”