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Ideas Grow - Money Flows

Digital transition has spawned great creativity. Ideas - all kinds - spring up anywhere. Markets ready to exploit them are obvious magnets.

happy moneyPiano Media is an example of this creativity. Formed in Slovakia five years ago on the simple and ambitious idea of bringing paywalls to publisher’s websites the company has taken several leaps, the most recent a merger with TinyPass, another “media content monetization solutions provider.” The company is now known as Piano.

3TS Capital Partners, a Vienna VC, placed €2 million in first round financing with Piano Media in April 2012. Six months later more than 40 websites owned by big publishers in Poland had signed up. The idea from much smaller Slovakia and Slovenia was to apply a single paywall provider to as many websites as possible in a given national market. Piano Media kept 30% of generated subscription revenues.

Alas, revenue growth through expansion stalled as bigger publishers enlisted in-house digital teams to create custom paywall systems. Chasing subscribers for online offerings was - and is - a tireless chore but easier, in a sense, than waiting for digital advertising to arrive. Publishers also learned that subscriber data was a rich resource not for sharing.

Piano Media changed its business model as publishers changed theirs. Several Slovak clients pulled the plug in fear of diminished brand advantage. The single paywall provider model was phased out for specialized technical and marketing solutions. At about the same time, metered paywall technology was acquired from Austrian developer Novosense, main office moved from Bratislava to Vienna.

As most media-tech start-ups discover buying revenue share is far more efficient than building it. Every VC and private equity firm understands this. Piano Media acquired US-based paywall provider Press+, eight times larger by revenue, in September 2014. The main office moved to New York City filled with digital natives from Thompson Reuters and Dow Jones. The Slovenian paywall portal went dark.

With the TinyPass merger, announced August 11th, the new company will simply be known as Piano. Press+ and TinyPass bring a load of big name online clients from NBCUniversal to Time Inc, News Corp to McClatchy. “The merged operation centers on a new audience intelligence and monetization platform, called VX, that segments audiences and presents users with different access options based on each user’s individual profile,” reported New York-based media portal mediapost.com (August 12). “These options can include subscriptions, ads, pay-per-view, registrations, newsletter sign-ups, surveys, social shares, sponsored access, and the like.”

3TS Capital co-managing director Pekka Mäki is considered Piano’s financial angel, true believer from the beginning with background in the ad business as well as investment banking. Most of the firm’s investments have been in Central and Eastern Europe with firms “in growth sectors which are most likely to benefit from the catch up to the western EU,” says the firm’s website. Several recent tech sector investments have been US based.

Piano’s trajectory from Central European start-up to Big Apple media-tech player is true to form. “Too much money is chasing too few investment opportunities,” wrote Nobel laureate economist Paul Krugman in the New York Times (August 24), noting broad turmoil among financial markets. And money never rests.


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