The Sydney Morning Herald
Australian startup inkl is the latest attempt to solve one of the media industry’s biggest problems – how to make people pay for online content. Take, for example, the content paywall that surrounds Fairfax mastheads The Sydney Morning Herald and The Age. According to inkl founder and chief executive officer Gautam Mishra, who as former director of Strategy at Fairfax built that paywall, it converts just 2% of readers to paying customers. “And that’s widely seen as one of the best paywalls in the world,” Mishra says. “It’s ahead of most publications. The question that needs to be worked out is what to do with that other 98%.” So Mishra founded inkl, a web platform that will soon be available as an iOS and Android app, that gives users access to content from some of the world’s major news publishers in one place. A $15 per month subscription fee gives unlimited access to inkl’s catalogue of news content, in the same way Netflix or Spotify do for the music and entertainment industries. For those that don’t want to subscribe, they can access content for 10 cents per article. Inkl keeps a portion of the revenue generated and shares the rest with the publishers. Inkl launched on Wednesday with content from seven of the world’s major news publications including The Guardian (Australia, UK and US editions), The Sydney Morning Herald, the South China Morning Post, Los Angeles Times, Chicago Tribune, the Washington Post and Indian business publication Livemint. More partners will be announced in the coming weeks. Mishra says 10 years ago the music and entertainment industries were struggling to get people to pay for content too, but the launch of the Netflix, Spotify and similar platforms changed that. “I think we need to build the same model for news,” he says. “There’s about 200 million people using news sources globally, and there’s probably only 2-3 million paying for news online.” Mishra bootstrapped the startup from its creation at the beginning of the year, up until August when he received seed investment led by North Base Media, a media focused investment firm co-founded by former managing editor of The Wall Street Journal, and former executive editor of the Washington Post, Marcus Brauchli. Mishra was not willing to disclose the amount of seedfunding inkl has raised. “A really important part of inkl’s purpose is to help ensure that high quality journalism continues to be financially sustainable,” he says. “As the trend towards mobile news consumption continues, publishers need innovative business partners who can help them find new ways to grow revenue. inkl generates 50 or even 100 times as much revenue per page as most readers earn from mobile ads, and still delivers a very cost effective solution for readers.” inkl isn’t the only startup trying to solve media’s big problem. Last month, the New York Times invested in Dutch startup Blendle, which allows individual articles to be purchased for a price set by the publishers, between 10 euro cents and 30 euro cents for news articles, and up to 80 cents for longer features. Mishra says it inkl is avoiding that magazine style content, instead preferring to focus on news articles that are best consumed on mobile devices. “(Blendle) is an amazing business and we really like them and their model, but ultimately it’s being setting up to do something a little different,” he says. “They’ve taken the view that the value in journalism is largely around print products in a digital medium. They’ve got a web interface and a virtual kiosk for picking articles. That sort of experience is fantastic for evening use, when people are using tablets and other devices. “We’re really focused on your morning and daily news.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Jack Matthews, the former head of Fairfax’s digital and metropolitan news divisions, has been named as the new chairman of loyalty card app Rewardle, which was founded by serial entrepreneur Ruwan Weerasooriya. Previously, Matthews served the chief executive of Fairfax Digital, before moving across to the company’s Metro Media division, where he oversaw The Sydney Morning Herald, The Age and The Canberra Times. He stepped down from the position in June of last year. Matthews has also served as the chief executive of a number of other businesses, including New Zealand telco TelstraSaturn (the predecessor of Vodafone New Zealand’s cable network) and Showtime Australia. Rewardle, which Matthews is also making an investment in, offers consumers and small businesses a digital version of the ‘buy-nine-get-one-free’ loyalty cards that have become a regular feature of many cafes. The web, iOS and Android app – also available as a printed card – displays a QR code that gets scanned on a tablet each time a customer makes a purchase at a participating store. The merchant, in turn, gets notified if a customer is eligible for a reward. The service also allows businesses the ability to identify trends they might not have noticed with traditional reward cards. It is the latest venture by serial entrepreneur Weerasooriya, who sold CafeScreen to oOh!Media in 2012. Weerasooriya’s other ventures have included TouchTaxi and Pugnacious George. In a statement, Weerasooriya says he first met Matthews when Fairfax advertised with CafeScreen. “We’ve been operating as a lean startup. But as a small startup chasing a big prize the time was right to more aggressively stake our claim,” Weerasooriya says. “Jack’s involvement will go a long way in validating the model and will accelerate our growth, particularly with progressing corporate partnerships.”
“Australian startups and Australian entrepreneurs find the American market very, very accessible. We need to do a better job of commercialising technology here in Australia.” That was what Federal Minister for Communications Malcolm Turnbull said, at an event in February last year, when he was still in the shadow cabinet. While in opposition, Turnbull talked about better R&D incentives, criticising the Howard government for creating uncertainty by changing eligibility rules on this one; he blasted red tape that slowed down the speed of innovation; and was critical of the fact that the number of startups funded by public organisations had decreased over time. “As we continue to pursue the important goal of improved productivity, which is closely linked to a better utilisation of technology, we have to ensure that governments are doing everything they can to make it easier for people to innovate,” he said at that time. So when Turnbull took up his mantle in the Abbott government in September last year, there were high hopes of improved government support for startups. This, thought the startup community, was a man who ‘gets’ what we’re about. Despite the fact that his stance on NBN is a source of much contention (that is another seven columns in itself), most in the startup community still saw Turnbull as the answer to getting some much-needed government attention. And he continued to say all the right things when in power. In January this year when conducting a live Facebook Q&A session (while visiting Facebook as part of a tour visiting leading US startups), he praised the potential for crowdfunded equity and said more needed to be done to encourage innovative companies. “We need to do more to encourage innovative companies in Australia . . . an obvious area is rectifying the anomalous treatment of employee shares and options in Oz,” Turnbull wrote at the time. “There is a lot of potential for crowdfunding-type models for aggregating venture capital. We need to think laterally on this critical issue.” It was only in March this year when he responded to a conversation between Nitro chief executive Sam Chandler and BlueChilli CEO Sebastien Eckersley-Maslin discussing later stage funding options for Australian startups. Turnbull waded into the conversation and invited both of them to meet and chat about the issue with him. A meeting, by the way, that never happened. Turnbull also wrote an opinion piece of his own for The Sydney Morning Herald, telling Australian startups that the government can help them. When it comes to funding, wrote Turnbull, “The role for government here is to foster a framework in which investors are protected and yet start-ups can raise money without hiring teams of lawyers and financial advisers.” Again he mentioned that the government was investigating ways to simplify rules for crowdfunding. “And finally, the government has a role in making life easier for start-ups to do business in Australia and stay here, as opposed to moving offshore,” he wrote. “One of the key priorities for the government is changing employee share schemes so that employees are not taxed on receipt of shares and options. But hopes were shattered on Tuesday when the federal budget was released. Nothing that Turnbull had floated was mentioned, and the limited support that startups had was effectively abolished. The budget announced the creation of the Entrepreneurs’ Infrastructure Program with an allowance of $485 million over five years, at the expense of the Innovation Investment Fund, Commercialisation Australia and other smaller support programs, saving $845 million over five years. That means even less public money for startups (about half of what it was), something that Turnbull had us believe was an important issue for him. Details of the new program still remain unclear. The government also cut the R&D Tax Incentive Scheme, and lo and behold, it appears it will become a more complicated process, as BDO points out “in a practical sense, the change in rates results in a more complex calculation of the benefit of the R&D tax incentive”. That was the very thing that Turnbull was critical of the Howard government for. But that’s not even where it ends. What about his ideas of better employee share option schemes and changes to rules around crowdfunded investment? Two things Turnbull has consistently argued would make a difference to the Australian startup scene. It was only a few days before the budget was announced that the government delayed plans to introduce a new regime for the employee share scheme. The delay was meant to be until later this year, but there was no mention of it in the budget. Ways to liberalise the rules to allow greater involvement from investors to facilitate crowdfunded investment are still under review, but there is no deadline on when the report on that will be delivered. You’d be forgiven for thinking it's not going to happen.
Believe it or not, I first met Valerie Khoo through Twitter a couple of months ago when The Sound of Music musical was on TV and we started singing together in the virtual space. It was so much fun!
The introduction of a quarterly credits system for the R&D Tax Incentive will “vastly enhance” start-ups’ ability to fund their research and development activities, according to a specialist advisory service.
An expert has issued some advice to start-ups who plan to offer stock options to employees, after players in the technology industry highlighted the drawbacks of Employee Share Option Plans.
Online retail start-up Tarazz.com.au says it will increase its offering to as many as three million items within the next year, after teaming up with Australia Post in an exclusive deal.
Sydney-born entrepreneur John van den Nieuwenhuizen has big plans for his Apple-inspired start-up Hidden, which is on the cusp of raising $1 million on crowdfunding website Kickstarter.
Startmate participant Ninja Blocks will return to Australia with very full pockets after securing $1 million from a group of high-profile investors, most of whom are US-based Australians.
Franchisees have been warned that they are personally liable for their actions, in the wake of the Brumby’s carbon tax pricing furore.
Sydney and Melbourne are to ramp up efforts to “greenify” their cityscapes with rooftop gardens and green walls, suggesting this could be an area of opportunity for start-ups.
Establishing a presence in an airport can lift your brand and image, a retail expert says, after Spanish-inspired tapas bar MoVida opened a venue at Melbourne International Airport.
A 17-year-old Australian entrepreneur is desperate to obtain a visa to work in the United States in order to launch a start-up there, having already launched and sold three others in Australia.
A Sydney-based lawyer has rejected recent claims Australia is suffering from an entrepreneurial brain drain, after launching an online social network for overlooked start-up talent that incorporates video pitches.
Retail start-ups should decide from the outset whether they plan to remain a boutique business or expand into shopping centres, an industry expert says, or risk diluting their brand.
Start-ups are set to thrive rather than flounder under a carbon tax, with new businesses having an opportunity to drive new industries, innovation and capabilities under the carbon pricing regime, according to a new report.
A new start-up meet-up backed by the City of Sydney has attracted more than 100 entrepreneurs and investors, with Sydney’s lord mayor flagging further start-up initiatives for the NSW capital.
The Fair Work Ombudsman has highlighted the importance of employee inductions, saying employers who fail to properly induct new employees risk disrupting their entire workplace.
US group buying giant LivingSocial has acquired Australian start-up Jump On It, one year after taking a 31% stake in the company, in a deal believed to be worth around $40 million.
Labor’s leadership battle could cripple the already-fragile state of business confidence, business groups warn, with concerns raised over how Kevin Rudd’s potential return would affect conditions.