in Business Design

Another Readability Business Model

I’m a huge fan of the ‘old’ Readability — I hit a button which sucks out the content of a web page into a nicely formatted view, then I usually hit the Evernote button to save it for reading on my Macs or iPhone.

The Readability folks recently amp’d the feature into a business. They added the ‘read later’ function of Instapaper/Evernote, and most notably a subscription revenue model from which they pay 70% to the content creators or publishers to compensate them for the ads Readability sucked out.

There’s a lot I like here, from their reader-first philosophy to the fine folks they’ve chosen as advisors (a few are friends of mine). But I can’t help thinking it’s not going to work. My doubts:

  • They’re competing with ads. Large organizations that depend on ad revenue have huge investments in ad serving and tracking. Readability to asking publishers to give that up for what Readability gives them. 70% sounds generous, until you do the math and realize 70% of not much is not much (see They’re small below)
  • They’re competing with free in the form of their free Read Now offering, the open source version, and Evernote. And Evernote is very, very good.
  • They’re small, so besides the fact that what they pay publishers won’t be much, they haven’t revealed any way to scale to the size necessary to make a material difference in how the publishing industry works. They have an API for developers, but they need to focus on the publisher side of the equation.
  • They’re not giving publishers control. Sophisticated ad serving systems let publishers tweak ad buys based on calculations of page views, content costs, clicks, etc. Readability simply offers a set percentage. And Readability is hoping publishers will do the work of coming to the Readability site to sign up, just to get the deal Readability dictates.
  • The legality is questionable. If I’m an asshole publisher (you can be sure they exist) I only see someone who is stripping out my revenue stream as a threat to my livelihood, and I call my lawyers for their opinion. Chances are the big media houses have more lawyers than Readability.
  • 30% is expensive. Apple takes 30%, but has gorgeous devices and stores and the iTunes marketplace and credit card numbers galore. Publishers can bitch about Apple, but they offer a lot for their 30%. The value that Readability adds is small in comparison.

I could be wrong, there could be a huge infusion of this function into every reading tool. And once it gains a critical mass of readers the publishers get on board. But I don’t think the product is quite positioned for that yet. Here’s an alternate business model leading the same, and sometimes better customer experience:

Readability develops an ad network-facing API and partners with the biggest ad serving networks to integrate the API. When a publisher serves a page, the ad network checks the visitor’s machine for a cookie and if present serves a ‘clean’ page to Readability subscribers and a normal page to everyone else. The impression is recorded and Readability pays the ad network who in turn pays the publisher. In this model publishers don’t have to configure anything new and get paid automatically, the ad networks get paid and get a new revenue stream, Readability gets paid, and Readability subscribers get beautiful, clean pages often with zero clicks.

  1. Your proposal at the end does avoid the legal issues for Readability, but I can’t imagine either users or publishers preferring it. For users, it saves them a click but means that Readability won’t work on many sites because those ad networks aren’t on board. For publishers, it saves them a few clicks of signing up with Readability, but means that the ad network will take a cut of their revenue.

    A better solution would seem to be this:

    On sites which haven’t set anything up with Readability (i.e. most sites): Readability works as it does at present.

    On sites which sign up for Readability: Readability works as it does at present, and the publisher can place a bit of code on their site that gives Readability users the zero-click experience you describe.

    On sites which don’t want to trade in their ad revenue: Readability offers code the publisher can place on their site that prevents Readability from running. This seems like it would avoid the legal issues while still making Readability work on all sites by default—which I think is critical to the UX.

    On the rest of your post:

    I’m not sure we really know how much 70% is yet; it all depends on how much money users are willing to pay.

    Also, I don’t see how Readability being small is relevant to publishers: Readability only asks the publisher to trade in it’s ad revenue when a Readability user is visiting their site; for other users, the publisher is welcome to continue serving ads.

    Nonetheless, an interesting post on a compelling topic. It’ll be interesting to watch this all shake out.

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