Indonesian e-reader SCOOP pivots its business model. What does it mean?

I came across an interesting development today, and I’d like to crowdsource some opinions from the media junkies in Jakarta.

Indonesian e-newsstand SCOOP has drastically changed its revenue model from a per download scheme to a subscription-based, all-you-can-read offering. For Rp 45,000 per month (US$3.67 as per Google’s currency conversion today), Indonesian media consumers can now expose their eyeballs to virtually limitless digital content which otherwise would cost somewhere between US$1 and US$10 a pop on SCOOP.

The startup is one of the most popular platforms in the nation for accessing ebooks and digital versions of magazines and newspapers. Willson Cuaca is the CEO of Apps Foundry, the creator of SCOOP, as well as the managing partner of local VC firm East Ventures (Disclosure: East Ventures invests in Tech in Asia. See our ethics page).

“We have thought about it and built up a hypothesis around the pricing model and also Indonesian users’ spending power,” explains Cuaca. “We think $4.99 is going to be interesting for the current users and also hit the psychological price point of new users.”

Cuaca says 80 percent of SCOOP’s revenue currently comes from the users, and he believes their spending will remain the same. It’s possible that this means SCOOP’s current user base only spends around US$3.67 per month on digital content anyway, although Cuaca did not disclose that information. According to him, the new model is meant to acquire new users.

Cuaca has been known to invest in tech companies (like ours) under the maxim that profitability is the enemy of growth. This means that digital startups should delay monetization in favor of reaching a critical mass of users first – depending on the business model. This is not the case with SCOOP, however, as Cuaca says the company cares very much about profit margins, which he claims are healthy.

“So far in three days, we have hit 1,000 new premium subscribers without spending anything on marketing,” Cuaca adds. “80 percent of them are new users who’ve never bought anything on SCOOP before so it seems like our hypothesis works.”

The move is interesting because it raises questions about whether Indonesians are no longer willing to pay a premium for news. Is print officially dead in the water? Are emags on life support? What does it mean for the publishers? Does it still pay to run a monthly content machine? Last but not least, do daily blogs now trump traditional media in Jakarta?

I’d love to get your thoughts and opinions below guys.

(Update 7/7/15: Ellen Nio from Apps Foundry reached out to let us know that the new subscription model is not a pivot, but a new option in addition to the pay-per-download business model.)