Last week, at the publishing summit of the Munich Media days, the German managing director of Spotify Stefan Zilch was asked how something like the Spotify music app, which offers unlimited music access to users for €9.99 ($12.68) a month, could be adapted for the print industry.
Mr. Zilch was not really sure how his business model could be adapted. One person who does know is Per Hellberg, the CEO of Readly. Like Spotify, Readly comes from Sweden, and, instead of music, the app gives readers access to magazine content, also for a flatrate of €9.99 a month.
Readly was founded at the end of 2012 by the Swedish internet entrepreneur Joel Wikell. It officially launched in Sweden in March 2013, and expanded to Great Britain and the U.S a year later.
In Sweden, the U.S. and Great Britain, the three markets where the company already has a presence, there are 8,487 issues from 678 different magazines available. At the beginning of October, Hamburg’s Bauer Media Group announced it would be Readly’s “first global cooperation-partner.”
Readly launched yesterday in Germany. As well as the Bauer Media titles, it contains the publications of the Funke-Media Group, the International Data Group (IDG), and the German edition of “Vice” magazine. Big magazine publishing houses such as Burda and Gruner+Jahr are conspicuously absent from the line-up, but Mr. Hellberg is satisfied. “We have 20 percent of the German magazines that are appropriate for us in the program,” he said.
The magazine offer will keep growing. For the first three to four months, during the soft-launch phase, Readly plans to be quite reserved with its marketing spend, as it was in the U.S at the beginning.
Readly keeps 30 percent of the subscription income, the same percentage Apple takes as commission from publishing houses for subscriptions sold through their iTunes store.
In a second phase, beginning in 2015, the Scandinavians plan to roll out in Asia and Latin America. One round of primary funding, due to happen this year, should make these expansion plans possible. According to Mr. Hellberg, investor interest is huge. In the very first round, the CEO said that the company had gathered “€13 million to €13.5 million.”
Readly keeps 30 percent of the subscription income, the same percentage as Apple takes as commission from publishing houses for subscriptions sold through their iTunes store. Unlike Apple, it allows its partners in the publishing houses free access to the reading-behavior data of its users.The app is a long way from putting printed magazines out of business – only two percent of users have switched from printed magazines to Readly’s online versions.
While the Swedes current have no direct competitors in Germany, they still need to watch their backs, as Dutch start-up Blendle is right behind them. Blendle offers single articles for 10 to 30 cents per piece in its home market, based on the iTunes principle of being able to buy a song from an album, rather than the whole album. Germany’s Axel Springer group – publishers of Bild Europe’s biggest-selling tabloid – together with the New York Times has just invested three million euros into the young company. With 23 percent of the voting rights, the media giants are well-placed to support Bendle’s successful growth.
Meanwhile, back in Sweden, Mr. Hellberg and his team are busying themselves with newspapers next. On September 22, they launched a beta version of a newspaper flatrate, which they plan to export as soon as it is ready.
Kai-Hinrich Renner reports for Handelsblatt on the German media industry. To contact the author: firstname.lastname@example.org