Here’s the basic economic agreement that powers most of the stuff you see on the internet: You look at it for free, and in return, someone shows you some ads. Since you’re reading this story on this ad-supported site, you’re part of that agreement, right now.
Tony Haile wants to make a different deal: He wants you to give him money, and he’ll give most of that money to internet publishers, and they’ll take the ads off of their sites.
That’s the theory behind Scroll, Haile’s startup that is launching Tuesday after several years of prep. A shorter and slightly less accurate way of describing Scroll: It’s a subscription ad-blocking service.
And here’s the shortest way to describe what it does:
Ad blockers aren’t new, and there are plenty you can buy or use for free. But the big difference between previous ad blockers and Scroll is that traditional ad blockers remove publishers’ ads — which most publishers still depend on for the majority of their revenue — without giving them anything in return (which is why some sites block users who use ad blockers). Haile’s company, though, pays publishers who remove (almost) all of their ads.
Scroll is an interesting idea, and Haile says he has convinced publishers who run more than 300 sites to give it a try (that group includes Vox Media, which owns this site). And while Haile is careful to argue that he’s not telling publishers to give up on web advertising, that’s really the underlying premise of his company: He says publishers can make more money from Scroll than they can selling ads.
Haile’s standard line: “We wanted to think about what would the internet look like if ads never existed.”
Haile is quite familiar with the internet as it looks like today: Prior to Scroll, he was CEO of Chartbeat, the software many internet publishers use to see who’s visiting their sites and what they’re consuming, second by second. He’s also well aware that sites that depend on digital ads (like this one) find that business increasingly challenging, since Facebook and Google hoover up the vast majority of internet ad dollars.
We can get into the mechanics of Haile’s business in a bit. But here’s my big thought: If Scroll works, it doesn’t mean internet advertising is going away. It would, however, be another move toward creating a tiered internet, where people who don’t want to see ads — and can afford to pay not to see them — won’t see ads. And people who can’t pay, or don’t know there’s an option, will keep seeing banners, pop-ups, and pre-rolls.
This is already happening, particularly for video services: Hulu charges $6 a month for its collection of TV shows and movies, but if you pay $6 more a month you can watch them without ads. CBS All Access offers a similar deal. Comcast’s upcoming Peacock service is very much supposed to be a free, ad-supported service, but Comcast (a Vox Media investor) will let you watch it without ads if you pay $10 a month. And Netflix, which has 167 million subscribers and costs between $8.99 and $15.99 a month in the US, doesn’t have any ads at all.
But while lots of internet publishers have started putting up some version of a paywall on their sites and are asking customers to pay them directly to consume their stuff, most of those sites still show subscribers advertising. Scroll means you don’t see an ad, whether or not you’re a subscriber.
Scroll will eventually cost $5 a month. Haile’s company plans to keep up to 30 percent of that fee. The rest it will distribute to participating publishers, using a formula that distributes the money based on the amount of time you spend on publishers’ sites.
It’s a twist on similar payout schemes that services like Spotify and Apple News+ formulated to compensate their content partners. The difference is that Scroll creates individual “buckets” of usage for each user. That means if you spend a lot of time reading the Philadelphia Inquirer but not as much on BuzzFeed, your fees will be distributed accordingly; and if you don’t spend any time on Fatherly, that site won’t get any of your Scroll subscription.
Another way of putting it: When you subscribe to Spotify, you end up sending artists like Drake and Taylor Swift (or, at least, the people who own their music) a lot of your monthly fee, even if you never listen to them because other Spotify users listen to them a lot. The Scroll scheme is meant to align publishers and users more closely so your money doesn’t automatically flow to the internet’s biggest publishers.
Scroll also tells individual users where their money is going. Here’s its estimate for where my $5 would go after a few days of use (I’ve been on a free trial, so this is theoretical):
Scroll doesn’t actually block ads itself. Instead, when you visit a participating site, Scroll tells the site you’re a subscriber, and the publisher presents you with an ad-free version. Or, a mostly ad-free version: Scroll will still let publishers present affiliate links, subscription offers, and custom-built native advertising.
But publishers are supposed to strip out banner ads, pre-roll ads, and most of the tracking software that publishers use to figure out who is visiting their site, and which they present to advertisers that want to reach you. Scroll itself will use tracking technology but says it is doing it solely to figure out how much to pay publishers, and it promises not to sell your information to advertisers or anyone else.
I’ve used Scroll for a few days, and after an initial bit of fiddling — if you use multiple devices you’ll need to log in on multiple devices; you’ll also need to install a dedicated app for your phone, and you may also have to click a few buttons to get it working on web browsers within services like Twitter and Facebook — I mostly stopped thinking about it, which is what Haile wants.
The main thing I noticed is that when I visited non-Scroll sites that are particularly ad-heavy, like the New York Daily News, the experience seemed even worse than before because I had started to get used to ad-free sites.
Haile spent several years trying to convince publishers to give him a shot, but there are at least three big holdouts he will want to bring into the fold: The New York Times, the Washington Post, and the Wall Street Journal have not signed on, even though the Times and the Journal (via its parent company News Corp) are two of the investors that have given Scroll $10 million in funding so far. “I look forward to them joining in due time,” Haile says.