Can media micropayments work this time?

Hello there,

As someone who runs a media business, today’s startup very much interests me.

Close watchers of the startup scene might have come across this company in its previous incarnation, but now it’s back for a fresh shot at making micropayments a credible force in online media.

Scroll down to read all about Recast. As ever, PreSeed Now subscribers with a paid subscription get the full story along with access to our Startup Tracker 👇

– Martin

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Can Recast make media micropayments the success audiences want?

What’s the best way of monetising online media? 

Advertising can be a great model, but if the economy takes a downturn, your revenue could take a sharp drop. 

Subscriptions build a direct relationship with your audience but in a world where seemingly everyone wants a monthly payment, consumers can only support so many of their favourite media outlets.

Micropayments for individual pieces of content have long been something audiences have asked for, but conventional thinking goes that the numbers don’t add up, at least not in the news business.

And yet micropayments remain a compelling proposition for audiences, so the idea will keep coming back. The latest startup to attempt to move the needle is Recast.

The product in this case is a way of paywalling content on an individual basis. To unlock, say, a video of a specific sporting event, the audience would visit the rights holder’s website or app, and pay via Recast’s tech.

Rights holders can also offer ‘channel passes’ to allow access to a collection of content for a limited time period.

Crucially, the tech incorporates a wallet that users can top up to pay for content across any media outlet that uses Recast. Not only that, users can receive rewards into the wallet too. These could be incentives for sharing data with a media company, watching an ad, or sharing a video.

Recast offers four product packages with a variety of features. In all cases, it takes a 30% cut of sales through its platform.

In the future, the startup plans to offer an API-based offering for a lower 15% cut of transactions on publishers’ websites and those of their affiliates.

Founder Andy Meikle says the product has been described to him as “like PayPal plus Shopify”.

Meikle sees Recast as a good fit for any kind of online content, but the startup’s initial focus is sports video.

“Our main starting point is sports rights holders who have not sold their rights in certain territories. Typically a rights holder will sell their rights to a broadcaster. But there are many territories around the world where they might not have sold them, and our solution allows them to go direct to consumer in those markets.”

Rather than sell directly to the rights holders themselves, Recast will typically target service providers who help with content monetisation.

Why now?

Micropayments for media have been tried before. Remember Blendle, the Dutch startup that let users pay for news articles from big-name publishers on a per-article basis? It moved away from micropayments in 2019 after deciding they weren’t profitable.

But some ideas don’t work… until they do. The much-mocked QR code had to wait for years, until a pandemic, before it went mainstream.

So is now the time for media micropayments? Meikle believes that current business and consumer trends point towards a ‘yes’.

“Rights holders and content owners in the marketplace are desperately in need of a solution to unlock new revenues from fans,” he says.

“As broadcasters continue to lose their subscriber numbers, or any growth is slowing down, it’s forced many rights holders, particularly in the world of sport, to put the media up on the major social media platforms.

“But it was only a matter of time before the realisation struck that they now need to try to engage their fans, capture data, understand who they are, and monetise them directly. 

“So as a result of that, many have gone direct-to-consumer, but you can't just rely on subscriptions, because there's an oversaturation of subscription offerings.”

Meikle sees Recast as a way for media companies to get customers into a funnel and engage with them, without drawing them straight into the commitment of a subscription. 

And consumers are ready to pay in a more piecemeal way, he argues.

“I think consumers, particularly younger consumers, are looking more for more flexible consumption these days, and dipping in and out of such things… 

“From a consumer’s perspective, it's really in line with the ways in which they now want to consume content or transact with things, so I'd say that we're addressing a convergence of trends.”

The story so far

Meikle says that after an injury scuppered his plans to become a professional footballer, he turned to entrepreneurship in the United Arab Emirates.

After his first startup, which he describes as “the equivalent of [erstwhile UK directory enquiries service] 118118 for the UAE”, didn’t succeed, he founded a social platform for sport fans called SportLobster which went on to raise a total of £12.3 million.

It was here that Meikle learned how to partner with sports leagues, teams, and athletes, even bringing Cristiano Ronaldo on as an ambassador for the business.

He left the business following a buyout, moved to Edinburgh with his family, and began work on the first version of Recast in 2019.

The first incarnation of the product was similar to what it is today, but was designed to draw audiences to Recast’s own destination to view content from partnered media companies on a spot-payments basis.

It was a success, raising around £15 million in investment and attracting the likes of Manchester City Football Club and the World Curling Federation as partners.

However, startups can be fragile things, and Recast 1.0 collapsed into insolvency last year after a planned further investment round didn’t come through.

Meikle swiftly moved to organise a deal to save Recast’s IP, with a combination of new and existing backers, and a new company.

The reborn Recast is essentially a new startup with a fresh cap table. It also has the benefit of beginning with mature tech from the previous version of the company, repurposed for the new offering.

It’s early days for the new product, but World Aquatics already uses it, allowing them to monetise ‘dark markets’ where they have no rights licensing deals in place.

“This entire page is powered by Recast; the layout, the pricing of content, categories of content etc is all managed by World Aquatics themselves, through our self-serve platform Recast Publish,” says Meikle. 

“To consume content you'll need to use your Recast wallet.”

Meikle says the months ahead will see Recast launch an API that will allow the startup’s tech to be integrated with third-party media players. 

Go deeper on Recast

Read more about their funding and investment plans, vision, competition, and challenges:

Funding:

The new version of Recast is currently raising its first round of £5 million. 

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