News Republic is built on a unique model: Instead of exploiting publishers’ RSS feeds, it shares revenue with them—a risky option that begins to pay off as the company lands deals with cell phone makers. Current numbers are impressive: News Republic racks up 272 page-views per monthly active user.
Gilles Raymond, News Republic’s founder and CEO, likes to use big numbers to describe his business: its app is available in 40 countries and 29 languages; news sourcing comes from 1,500 separate deals with information providers, ranging from Reuters to The Guardian and Business Insider in the Western world, but also Hearst China, Sohu News (China), Baidu News (China), China Times (Taiwan), India Today (India), and the Hindustan Times (India). Altogether, they provide 50,000 pieces of information (articles, photos, videos) per day.
From the user’s standpoint, News Rep is an endless firehose of information that can be tamed in two ways: the application automatically “learns” from the reader’s usage patterns, and it can be manually customized. Surprisingly, 65% of News Rep users actually opt for significant customization. This can be seen as both a positive and negative sign. On the one hand, such a high rate of deliberate personalization could signal strong user engagement. On the other, that same behavior might just expose shortcomings in the startup’s learning engine that explain why users still need manual fine-tuning. (I have yet to find any automated personalization feature that works well enough for me.)
Regardless of its imperfections, the app does the job. It works well both for breaking news (the Russian Airliner crash in Egypt showed up quickly in News Rep), and for news features on a wide range of topics.
Customers love it: on average, News Rep is getting 12 million uniques a month, with 272 pages views per month and per user. Those numbers vary widely from one country to another:
The company was created in France, which explains the high level of engagement there: consumption reaches more than 500 pages per active user and per month. The engineering team is still working from Bordeaux while the CEO and a marketing team have settled in San Francisco, with correspondents in Asia and Latin America.
To put things in perspective, based on page views counted in the French market, News Republic’s app engages four to five times better than Le Monde or Le Figaro. The comparison has its limits, though: we are weighing value-added publishers vs. an aggregator… Still, News Republic’s numbers attest to a strong interest for large and powerful news collectors.
Started in 2008, News Republic’s stands as its competitors’ polar opposite. In most cases, aggregators such as Flipboard have built their business by taking advantage of the RSS feeds made freely available by publishers. In retrospect, such free access probably is a costly mistake. These players allowed anyone to read The Guardian’s entire content without seeing an ad, while quietly building their audience on the newspaper’s back.
The venture capital community, prone to extol the Wild West approach of those who move fast and ask for permission later, lined up to fund these models. Take Flipboard, the genre’s pioneer with its gorgeous design and cleverly arranged contents: VCs injected $210 million in the company, inflating its valuation to $800 million.News Republic’s numbers attest to a strong interest for large and powerful news collectors.
Last week, cracks began to appear in Flipboard’s previously spotless façade. The Wall Street Journal, followed by Bloomberg, reported that key executives were leaving; that talks of an acquisition by Twitter had gone nowhere; that revenue has reached a mere $20 million, short of its supposed $80 million target. Other signs, such as backing out of a lease or a downfall in apps ranking (to 1030th place for an app that stood at the top for months a few years ago) also fed the buzz that Flipboard’s golden hours were gone. That being said, this weekend, in a Fortune interview, Flipboard’s founder and CEO Mike McCue dismissed those rumors and insisted on Flipboard’s spectacular growth, with an audience that went from 40 million unique views last year to 80 million unique views in 2015. Interestingly enough, McCue denies there was a $80 million revenue target, which implies that Flipboard makes way less than $1 per user per year. That last number doesn’t help the company live up to its near-unicorn valuation.
The once-praised Flipboard is far from dead, though; its interface and design remain second to none, and, as explained by the Wall Street Journal (emphasis mine): “As a precautionary measure, Mr. McCue raised $50 million in July from J.P. Morgan at the same valuation investors placed on Flipboard 19 months earlier.”
Like many of its aggregators peers, Flipboard suffers from an original sin: it captures a large part of its content through RSS feeds, but sends back only a tiny fraction—sources say around 1%—of its huge traffic back to the publisher. Some high profile publishers do actually have a licensing deal with Flipboard, but the vast majority do not.
Playing around copyright is part of the aggregation game. One of the most borderline tactics involves an app called Smartnews. Well designed and convenient, it ingests many prominent news sources (CNN, ABC News, Quartz, Fortune…). Once you click on a story on its the home page, it displays an intermediary page proposing you click on a “smartview” version of the destination page. If you do click on the “smartview” (in green below) you land on a dedicated content page, stripped of any of the publishers’s attributes: visual features, photos, and, of course, advertising. But if you do nothing, after one and a half to three seconds, you land on the publisher’s mobile page, embedded in a webview.
Given its speed, the “smartview” version can’t be created on the fly—it is most likely stored within the application. Nothing in Smartnews Terms & Conditions suggests that it owns the right to store news content within its app; if it did, why then automatically send the user to the news source’s mobile page in a much slower process via a 3G or 4G connection?
Below is a an example on the user experience on Smartnews…
News Republic takes a more straightforward approach: It stores and caches the news in its app to secure super-fast availability (with no link back to the publisher). It has the permission to do so, because it pays the publisher—about 50% of ad revenue.
For News Republic, what was once seen as a costly strategy could actually turn into a decisive advantage as it now signs up smartphone makers such as HTC, Samsung China, or other still undisclosed Asian and European manufacturers—and racks up loads of new users in the process. What News Rep offers to OEMs (Original Equipment Manufacturers) is access to its abundant stream of news without any copyright infringement risk. And it seems to work fine as News Rep’s traffic is stepping up significantly. Since the beginning of the year, according to the company’s CEO, these agreements have increased the value of its ad inventory by 240% with no loss in CPM; for the next few years, he expects to see the vast majority of its traffic coming from OEM deals.
Still, News Rep in not out of the woods yet, as the “clean aggregation” segment now attracts new players. On Sept. 1, 2015, Axel Springer SE announced a deal with Samsung to provide a news service loaded on Samsung devices sold in Europe. Called Upday, the project will launch next year—and it will also be liability-free.
This is another sign that the aggregation business is about to regulate itself towards a clean business model.
This post originally appeared at Monday Note.