SubHub, a platform whose system helps niche publishers sell subscription content online, has secured first-round venture funding, partly from former Amazon (NSDQ: AMZN) Europe MD Simon Murdoch, who joins as chairman, paidContent:UK has learned.
The round, of an undisclosed amount, goes in to the Cardiff-based company, founded by ex Excite Europe MD Evan Rudowski and Miles Galliford, led by the Finance Wales venture house, and looks like a vote of confidence in paywalls.
It brings the company’s total investment to $1.2 million since forming in 2004; a previous announcement referred to an earlier $1 million funding. This latest outlay is “significantly” more than the $200,000 difference and is the biggest single portion of its total funding to date.
SubHub’s purpose-built system lets niche magazine publishers, associations and solo writers publish content online that requires paid access of users, priced at £49.97 per month to publishers. Users have included wine critic Jancis Robinson and Cruise International magazine. It’s not exactly what larger newspaper or magazine corporations will be looking for, but rather an out-of-the-box way for smaller authors and titles to get content online and start charging quickly.
Rudowski told paidContent:UK his customer base is growing by five percent per month and claims “a substantial percentage” of free-trial publishers convert to paid. But he views the recently reignited paid content debate with “some exasperation”: “The current debate is oversimplified, and needlessly polarised between the paid camp (Murdoch, et al) on one hand and the free camp (Jeff Jarvis, et al) on the other.
“It’s not a binary choice at all; rather, success online is achieved by offering a combination of free and paid (freemium) and by incorporating multiple ways of making money — subscription and membership, advertising, affiliate, e-commerce and more.”
Rudowski and Galiford started SubHub in-between the original and the current paid content trends, with Welsh Assembly Government incentive grants and other loans, based out of the publicly-funded @Wales digital media incubator. It has a team of eight (including sometime dance DJ Jean Jacques Smoothie!)
“As the majority of our customer growth is now derived from the US, Cardiff is as effective a base as London,” Rudowski says. “Nevertheless, we do intend to use some of this new funding to increase our activities on the ground in the US over the coming year.” After the funding, more hires are coming locally, too.