A New Startup Is Personalizing Paywalls for Bots and Humans Alike

This story was originally published in On Background with Mark Stenberg, a free, weekly newsletter that explores the key themes shaping the media industry. You can sign up for it here.

Stop me if you have heard this before, but it bears repeating: When OpenAI debuted ChatGPT in November 2022, it introduced an existential problem that, even after more than three years, has yet to find a solution.

In short, answer engines rely on the copious availability of quality data to fuel their responses, which they draw from content creators, like publishers. Yet in answering users’ questions without sending those users back to the websites that supplied the data, they starve these publishers of revenue, creating a system that is, quite obviously, unsustainable. Over time, the publishers will wither, the answer engines will lose their data providers, and the model will collapse.

This fundamental paradox has risen from a concern to a crisis for the digital media industry, which has seen its collective search traffic, and its attendant revenue, plummet in recent years. It has spurred countermeasures from content creators, such as diversifying their traffic sources or signing one-off deals with answer engines, but these are stays of execution, at best.

For the open web to survive, a new payments infrastructure needs to emerge that allows publishers to be compensated by AI firms for use of their data. And so far, the early results on this front have been uninspiring: Most of the initiatives involve publishers restricting web crawlers’ access to their content—an effort to create scarcity and, eventually, increase the value of their archives. 

Outside of the many technical challenges involved in setting up such a system, a far more basic roadblock has so far proven impassable: The AI firms have little need to pay. Like any good boycott, publishers’ withdrawal of access only works if no one crosses the picket line, which is to say that every last website and content creator in the world would have to link arms in unison to make such a withholding work. Naturally, that has not happened.

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Thankfully, there has been a recent thaw on this front. It is now increasingly understood that, eventually, the leading answer engines will have consumed and trained on all of the data available on the web. When that happens, to continue being of use to consumers, the LLMs will need access to fresh data from publishers. This development should provide content creators, finally, with a modicum of leverage and bring AI providers to the bargaining table.

Seemingly in recognition of this eventuality, a number of hyper-scalers have begun rolling out these payment architectures, which they call content marketplaces. Microsoft has taken the lead, introducing a pilot program a few weeks ago, Amazon is reportedly at work on its own, and Google has even begun playing its usual game of footsie with publishers.

Similarly, a handful of other companies have sought to build out these marketplaces, including content delivery networks like Cloudflare and Fastly, as well as startups and private firms like Tollbit and ProRata. I have written about a few of them before. 

But on Wednesday, a new entrant joined the fray, whose approach to the matter is unlike any other so far.

A bot and human web

Called Monetization OS, the new startup operates on the assumption that an ideal system would use a single infrastructure for content creators to monetize both their human and machine traffic. 

This layer would effectively take the form of a very sophisticated paywall, which makes a lot of sense, given the background of its founder James Henderson. Henderson, whom I spoke with last week, was the founder of Zephyr, an intelligent paywall technology that was acquired by Zuora in August 2022 for $44 million.

Unlike standard paywalls, Zephyr uses machine learning to present visitors to a website with a paywall experience tailored to their individual behavior. 

Rather than a binary or metered gate, these paywalls make determinations based on a variety of factors, such as the referring website—someone sent from LinkedIn has a higher probability of paying than one from Instagram—what content they are consuming, how often they have visited, how long they linger, and a million other elements. 

With Monetization OS, Henderson wants to apply an even more complex version of this technology to websites, but this time to enable it to personalize paywalls for both humans and AI agents. 

For humans, this means not just tailoring when the paywall arrives, but also the product that it sells. A returning reader that engages exclusively with sports content might receive a subscription offer that offers unlimited access only to sports content for a fraction of the price of a standard subscription—same with someone who only reads a certain author or during a certain period of time. For every specific visitor, a specific experience.

“There is a distribution demand curve for humans, where certain customers will be worth a lot of money, then a long tail of people who will not convert at the same rate,” Henderson said. “The way you deal with that is by having a spectrum of products that match that demand curve.”

For bots, this means enabling content creators to establish a taxonomy of responses based on the needs of the publisher. If a website has a licensing partnership with an AI firm, for example, its crawlers may be allowed to access content for free or at a predetermined price. Unfamiliar bots could be turned away or charged a higher price. That price could even change depending on the exact content the bot is looking to collect—one gathering information on car prices could be tolled more than one looking for sports scores, for instance.

This approach to bot monetization is not unique to Monetization OS, but the way it blends the offerings is. In fact, the paywall would even account for emerging use cases, such as when a human subscriber uses an agent to gather information from a website. The end result is a single system that monetizes every visitor to its site.

Monetization OS still faces the same dilemma as its peers, which is that its bot monetization strategy only works if AI firms are willing to pay in the first place. No amount of technical wizardry can circumvent that issue.

But it does address the problem partially, in that its more effective monetization of human visitors would at least result in an uptick in revenue in the short term. By packaging these offerings as one, the company can pitch both short-term and long-term revenue gain in one product.

The 24-person team has raised north of $6 million, and it counts backers including Google, Cloudflare, and Mather. It is also much more affordable than classic paywall technology and easier to implement, according to Henderson. It will have a tiered pricing structure, with a free, paid, and enterprise offering based on total interactions per month.

I have always found the concept of smart paywalls to be alluring, as they theoretically take all the guesswork out of monetization, leaving content creators to focus on their work and let the machines sort the money. The idea of blending this technology with bot monetization extends that calculus to its logical next step.

The odds of success are, as always, long, especially considering that the competition has a combined market cap well north of a trillion dollars. But it is nonetheless heartening to see a promising new approach to such a consequential problem. 

Talking Heds

ATTN: Please: The social influence publisher ATTN:, which you likely encountered in the form of its short-form political content, has been a hive of activity. Last month, its cofounders Matthew Siegel and Jarrett Moreno bought a majority stake in the company back from Candle Media, the Blackstone-backed firm that paid $150 million for it in 2022. Then this week, the publisher, whose business largely stems from its agency work, hired media executive Edgar Hernandez as its first chief commercial officer. Hernandez, who most recently served as the chief strategy officer at the multicultural media agency My Code, has previously served stints at BuzzFeed and Complex. Now independent, ATTN: has a remit to grow, probably through acquisitions, and financial backing from a throng of deep-pocketed investors.

Video Podcasts Proliferate: On Wednesday, the influential podcast How Long Gone, helmed by the bicoastal duo Chris Black and Jason Stewart, announced the rollout of its first video series, titled “How Long Gone Today.” The news comes on the heels of the Monday debut of a new daily video podcast from The Guardian, which will employ a staff of 10 and aims to eat into the listenership of competitors like The Daily. While the two series could not be more different in their scope and frequency, taken together they underscore the growing primacy of video in the podcast space. According to podcast trade firm Sounds Profitable, 71% of current podcasters create either video-only or combined video-and-audio podcasts, whereas only 29% create audio-only podcasts.

LTK Eats Creator Commerce: As the journalist Kyle Chayka observed, influencers are the new retailers. Perhaps no company embodies that thesis more than LTK, the creator commerce platform that enables vetted creators to list product recommendations directly on its app and take a commission. According to LTK founder Amber Venz Box, whom I spoke with while she visited New York for Fashion Week, the company is now pressing its advantage. Since inviting brands to the platform in November, more than 700 have joined; in a twist, they are only allowed to repost content, not produce their own. The company, which is profitable, does “hundreds of millions” in revenue, and doubled its EBITDA last year, plans to release an AI-enabled chatbot to its app in the coming weeks. Sadly, it has no plans to introduce ads anytime soon.

AI Upends Marketing: According to proprietary data compiled for ADWEEK, AI has not yet eliminated jobs in the marketing sector, although it has already begun dramatically reshaping them. In a survey of 501 brand marketers, 67% reported that AI had eliminated either no roles or just 1% to 5% of positions in the past year. But it has changed the nature of their work: Nearly two-thirds of marketers (63%) said that AI has moderately or significantly altered their daily responsibilities, while just 3% said their role hasn’t changed at all. Read the rest of the findings here. 

SXSW Soiree: I will be headed to South by Southwest in Austin next month, where I will be moderating panel discussions on streaming, podcasting, and creators. As a former Austin resident and native Texan, I also plan on swimming at Barton Springs and eating breakfast tacos. If you will be in town, please feel free to register for ADWEEK House on Sunday March 15, where I will be hosting some programming. Shoot me an email at mark.stenberg@adweek.com if you want to meet up!

Pulled Quotes

“To be in public is to risk being filmed. And these days, there’s a good chance it’s happening surreptitiously with smart glasses.”
The New York Times’ Luke Fortney, on the intrusion of smart glasses into shared spaces
READ MORE

“Bitcoin has actually underperformed the S&P 500 over the past five years, despite being far more volatile.”
The Atlantic’s James Surowiecki, on the pitfalls of institutionalizing crypto
READ MORE

“I said, ‘Oh, let’s start second-floor-maxxing while we’re at the mall.’ And people in chat were just like, ‘You’re such an idiot, dude, just say ‘go upstairs.’”
The New York Times’ Joseph Bernstein, on the argot of Clavicular
READ MORE

“A man whose job is to regulate broadcast TV suggests everyone just leave broadcast TV. It’s like when Arby’s changed their slogan to ‘Arby’s, would it kill you to eat a salad?’”
Stephen Colbert, on FCC Chairman Brendan Carr
READ MORE

Quote/Unquote

Chris Paul is a (now) former NBA player, who played in the league for 21 seasons, earned 12 All-Star selections, and won multiple Olympic Gold Medals. He played on a number of teams throughout his career, including the Los Angeles Clippers, Phoenix Suns, and—my personal favorite—the San Antonio Spurs. On Friday, Paul announced his retirement from the game, before jetting off to the NBA All-Star Weekend courtesy of AT&T. 

This interview has been edited.

Mark Stenberg: You announced your retirement after 21 seasons last week. Why now? 

Chris Paul: It was time. I feel like I had given everything I could give to the game. I joined the league when I was 19, and I’m 40 now. I have wanted to be more present for my family and be a part of their daily lives, and now I finally get to do that. 

Mark: You partnered with AT&T during the All-Star Weekend, speaking with two HBCU teams ahead of their Friday night matchup and shooting hoops with the Twitch streamer Clix. Why work with AT&T?

Chris: AT&T has actually been a part of my life and my family in a serious way. My grandmother worked at AT&T for 30 years, and my dad worked there for 10 years. She worked the first shift and he worked the second, and we had AT&T stickers around the house. Over the weekend the company gave me an AT&T basketball—I asked if I could keep it, to give it to my grandma, and my dad kept trying to take it. 

Mark: You also have an HBCU connection I was unaware of. I knew you played college basketball at Wake Forest, so I was surprised by your Winston Salem background.

Chris: Yeah I actually graduated from Winston Salem in December 2022 with a degree in communications. So when AT&T brought out the teams from Hampton University and North Carolina A&T State for a game Friday night, I got to speak with them in the locker room and talk to them about the stage they were going to play on. That was amazing.

Mark: Now that your playing days are over, are you hoping to stay involved with the league? 

Chris: Oh absolutely, but probably on the business side. I would love to get involved in an ownership capacity with a team, either here or potentially with NBA Europe. I was the president of the NBA Players Association for years, so I know my way around the business components of the league. 

Mark: I’m a San Antonio Spurs fan, and you played there for two years toward the end of your career. What do you make of the squad now?

Chris: The Spurs organization is like no other. Stephon Castle, even though he’s young, plays with an incredible maturity, and Dylan Harper, who was just in the Dunk Contest, is incredibly talented as well. When I was playing there, it was a tough time for me personally though, because it was the sixth year I was away from my family, who live in Los Angeles. I’m happy to be back with them full-time now.