The founders of a Swedish company that has developed a new revenue model for online content were in New York this week to sell U.S. content providers and Internet service providers on the idea.
True Revenue for Internet Content is working with ISPs in Sweden to launch a subscription content clearinghouse. TRIC acts as the middleman, signing up major content providers and ISPs, which would pay for access to the sites.
ISPs that refuse to pay for content would be filtered out by TRIC's proprietary software.
TRIC, based in Stockholm, has signed up unnamed content providers in Sweden, representing 70 percent of the Internet traffic in the country, according to the company.
“We have most of the portals in Sweden as well as other content sites, including community and news sites, that get a lot of traffic,” said Anders Lovbrand, co-founder of TRIC.
TRIC executives plan to expand the service to other countries in Europe by year's end and to offer it in the United States next year.
Lovbrand insists that ISPs, which will pay about 10 percent of their revenue for the content agreements, are in favor of the system.
“They agree with us that it's more of an assurance, to give incentives to generate new and improved content,” he said.
In Europe and the United States, even the most popular content providers have had to cut back content or shut down because of declining ad revenue, according to TRIC.
“The ISPs have to do something like this in order to really secure the future,” Lovbrand said.
As far as how the revenue model would affect online marketers and advertisers, Lovbrand believes it will be “business as usual.”
He added, “We want to see ISPs continue with their existing business models … but charge for premium content.”
Content providers could leverage premium content to ISPs, Lovbrand said, explaining that ISPs would need to reimburse content providers for a “fair share of the traffic they would generate.
“It's also a way for ISPs to compete on content by saying, 'We are one of the 10 ISPs that support this content,' ” Lovbrand said.
However, Lovbrand acknowledged that U.S. ISPs and content providers may be slower to accept TRIC's proposal than those in Europe.
“We have to tweak the model. There are many players [in the United States], owning both content and ISPs,” Lovbrand said.
In addition, the model will likely not work unless all ISPs in a country get involved.
“In Sweden, they are all very eager to get all major ISPs to accept this infrastructure,” Lovbrand said. “Otherwise, it will affect original business models too much.”