Toronto startup pushes to sell innovative paywall system to major US media companies
Damien Véran and Thomas Davy
Three-pronged approach to monetizing online content that promotes the sharing of content through social media
Online publishers and media companies
It’s a question that has been daunting online publishers for nearly two decades now — how does an industry that has become synonymous with free content get back to the point where people are willing to pay?
Damien Véran, president and co-founder of SlimCut Media, may not be the first to come up with what he deems a “revolutionary” resolution, but the Toronto-based startup has definitely turned some heads with its take on monetizing the online media world.
“That transition to the web has definitely been difficult, but it’s a very exciting time,” Véran says, his French accent filled with optimism. “It’s moving very fast and what we see today is going to be very different from what we’re going to see tomorrow.”
Launched in 2011, SlimCut aims to become a global leader in content access through its three-pronged hybrid platform, which marries paywalls, video advertisements and loyalty points.
But first it needs to figure out how to break into the U.S. market.
The unique multi-faceted platform lets readers choose whether they want to pay for subscription or watch a video ad before being able to read a story or view content. Or, they can wrack up loyalty points by visiting regularly, sharing articles or commenting, and they can redeem those points for access to more content.
“We are the only one doing the three in one,” says Véran. “By integrating all of them you can give the choice to readers on how they want to access the content.”
The start-up, which now has nine employees — four in Toronto and five, mostly engineers, in Paris — caught its first big break in 2012 when Postmedia adopted its platform for the National Post and the Financial Post.
After a relatively slow period, SlimCut has seen a surge in interest over the past quarter, landing clients in Canada, Europe and Brazil. Quebecor signed on to use the platform with its weekly and regional publications in Quebec, and St. Joseph Communications is working with SlimCut for its online magazines.
“We have six publishers, most of which have signed on in the past three to four months,” says Véran.
With the exception of The Globe and Mail and Torstar Corporation, SlimCut seems to have locked down a large swath of the Canadian market.
But despite such rapid growth, Véran admits the real test is breaking into the U.S. – specifically the large New York-headquartered media conglomerates like News Corp.
“The market there is ten or fifteen times the size of Canada’s,” Véran says.
SlimCut caught a lucky break earlier this year via the Canadian Digital Media Network (CDMN) Outbound Soft-Landing program, a program run by the federal government which helps connect startups with resources in other countries and regions.
SlimCut received $4,000 in funding to put towards hotels and transportation while pitching to new clients in New York. A separate media trade mission through the Canadian Consulate in New York introduced them to a number of the top executives in American media.
Out of those trips, SlimCut signed two contracts: one with a newspaper and one with a TV company, smaller players which haven’t yet been named.
But so far the big players aren’t biting.
“(With) big ones like that it takes time to demonstrate sales and establish relationships with the publishers,” he says. “We don’t know how to get the visibility in the saturated market when we’re not in New York.”
The company isn’t sure whether it should continue to have an executive travel for meetings, or set up a satellite office and hire staff stateside. It’s already spread thin with a small staff divided between France and Canada.
And the challenge is a little more sophisticated than just renting an office space and putting a salesman at a desk.
“There’s administrative concerns like contracts, lawyers and understanding green cards,” Véran adds.
But the status quo isn’t likely to work in the long-term.
“The travel involved in internationalization can be really difficult,” says Becky Reuber, a professor of Strategic Management at the University of Toronto’s Rotman School of Management. “And it sounds to me like there’s quite a sales cycle involved in terms of getting customers.”
Reuber points out that the tougher challenge will be convincing U.S. executives that SlimCut has “the” solution online publishers have been waiting for with only proof of concept in Canada.
“The companies in New York are going to have a different cadre of organization they’re going to pay attention to, companies they’re familiar with,” says Reuber. “That’s the hard work, that’s why they need someone in New York who can tap into that (knowledge) and leverage it.”
In the meantime, Véran hopes that when they announce their newest clients, it will boost their profile stateside.
“We’re starting to get traction in the U.S. We’re not just some small company still trying to get our foot in the door,” says Véran. “Right now we believe we have one of the best solutions there is.”