FINANCING
THE PARTNERS
INDIE’s first challenge is to capture subscribers within a reader base. As exposed in the previous chapter, this base will be composed of [1] subscribers that pay for the service and navigate through all content available on the website and applications and [2] subscribers that don’t pay for the service, but use the “freemium” model to surf unpaid open content, which isn’t protected by paywall.
All of INDIE’s audience – paying and non-paying – will generate digital data as they navigate. This will be collected (with previous authorization) and interpreted, becoming a marketable product. In short: subscriptions, data analysis, and syndication will add up to guarantee INDIE’s sustainability and the generation of royalties that can be distributed to partners.
One alternative model for paying the participating start-ups are under consideration the adoption of a system similar to the one used by musical streaming start-ups such as Spotify and Deezer.
This option for remunerating INDIE’s partners would assume that 70% of income obtained via subscriptions would be paid in form of royalties for the content created by partner start-ups. The remaining 30% would be kept by INDIE to pay its staff and to re-invest in technology and upkeep of the digital platform.
The distribution of royalties would require an adaptation of the streaming model. While Spotify or Deezer pay the record label and the artist every time a customer listens to a sound track — i.e. at every click —, the remuneration model for journalism should not stimulate sensationalist “click bait” articles, which could deteriorate the quality of the product and the credibility of the outlet.
INDIE’s system would be a hybrid that would unite [1] objective, quantifiable data, such as: audience [clicks per article], true readership [how much of the article was actually read] and engagement [sharing on social media]; and [2] subjective data like relevance [prominence of the article on the website].
To establish this mix, INDIE would commit to creating, developing, and testing the necessary algorithms for estimating remuneration so that it could be done
automatically, streamlining the royalty distribution process to PARTNERS and reducing the administrative burden.
Beyond the automatic remuneration criteria, if an article is extraordinarily successful, receiving awards or having positive social impact, the start-up would be rewarded internally. This impact could be measured by effective social, political and economical transformation, like the fall of a corrupt politician, for example.
Any royalty sharing system must be transparent, in order to build trust between the different parties. Thus, the distribution of income by INDIE to partner start-ups would be demonstrated by statistics originating from the platform itself and available for consultation at any moment. Each partner start-up would have a dashboard on INDIE’s website, with real time statistics, and a data management page that would allow them to follow their progress.
Using this metric, each project start-up could analyze the audience for its content and its performance on social media, which would improve process management and editorial choices. This is one of INDIE’s fundamental commitments: to provide partner start-ups with all of its financial management data, in total transparency, and to make feedback on their performance available so they can also learn from the process.
INDIE would not adopt the royalty rate model adopted by music streaming services. This system values artists according to their notoriety. It is controversial, since it generates inequality between record labels and artists. INDIE prefers a model which gives the same initial weight to all partner start-ups, differentiating the value of each article’s remuneration by the success and quality criteria laid out: audience, true readership, engagement [repercussion], and prominence of the article reached on the website.
In this way, each time a reader clicks on an article on INDIE’s website, a payment will be generated for the start-up that wrote the content. Each time the reader reads 70% of the text, for instance, this will generate a new payment, and each time the reader shares it on social media, this will trigger a third payment. The more the text stands out on INDIE’s main screen, the bigger the bonus.
TO FUNCTION AS AN EFFECTIVE HUB FOR EXISTING JOURNALISM START-UPS, INDIE NEEDS A SOLID, FAIR AND EFFICIENT SYSTEM TO REWARD ITS PARTNERS.
