opinion

Paysite Operators Want to Have Better Relationships With Suppliers

Paysite Operators Want to Have Better Relationships With Suppliers
Mitch Platt

It’s vacation time here in Europe. It’s hot and crowded at all of the beaches along the Mediterranean coastline.

Small towns that are sleepy most of year start to see traffic jams. It’s a big rush to do a lot of nothing.

You could say that what happens in the supplier network has a bigger role to play in the success of a paysite than anything that happens inside the paysite itself.

We start the typical vacation day with an early walk to the beach while it is still cool and there are still empty square meters for our beach mats and umbrellas.

As the sun becomes more intense we’ll find a little beach restaurant or “chiringuito” for a sandwich and a beer. After lunch we head back to our houses to chill in air conditioning or splash around at the pool during the hottest part of the day. In the cooler evening we’ll head out again for a walk and to take in the different events (jazz, fiesta del pueblo, etc.) that follow each other, one after the other, in August.

It’s a completely different rhythm than the rest of the year. It’s a necessary escape from the intense heat in the cities but also from patterns and ways of doing things that may no longer be optimal.

Pulling myself out of my daily life, uprooting it and planting it in a different environment for a while gives me a different point of view.

Many of the things I’ll be reflecting on this August have come from sessions I’ve hosted at the last two XBIZ.net Paysite Meetups (Prague in May and Barcelona in July).

Here’s a big question that is being asked: What are the reasons that alignment with suppliers is so hard?

Paysites want to have better relationships with their partners, including affiliates, ad networks, billers and content producers, among so many others.

From one point of view a paysite operator’s primary job is to build the best network of suppliers. That’s how a paysite competes.

You could say that what happens in the supplier network has a bigger role to play in the success of a paysite than anything that happens inside the paysite itself.

From this perspective a paysite is a hub of suppliers that all depend on a consumer paying money for content. The paysite is where it all comes together. The money the shopper pays the paysite, in effect, pays the entire supplier network.

Yet many paysite operators are deeply frustrated with their suppliers. They often feel dependent. Few paysites can afford to build their own version of the supplier’s solution. It’s too expensive. It would take too much focus.

Paysite operators — as consumers of the supplier’s services — see tons of opportunities for improving their relationships with each category of suppliers. These changes could be good for the suppliers, too. Why don’t they happen? What’s wrong? How is the current way of doing things sub-optimal?

As with all relationship issues a good first place to look is communication. Paysite operators don’t feel that their voices are being heard by their suppliers.

They also suspect that many of the suppliers are in monopolistic positions. Why innovate if you are a monopoly? It’s expensive and risky to innovate. Simply taking profits out of your business is more rational.

Paysite operators also fear that suppliers have a negative view of the future of the paysite industry. They think it will keep getting smaller. Why invest today when your potential market will only be smaller tomorrow?

Paysite operators also believe that suppliers are held back by legacy code. Their “technical debt” is too large to allow them to innovate on their current platforms.

Suppliers would need a total, top to bottom, re-write of their code. It’s an irony that an industry as historically innovative as our is held back today precisely because our innovations happened too long ago.

When you look outside of our industry you see a very different picture. There is an obvious contrast. Supplier networks in other online industries get stronger by the day.

There is a great deal of competition and innovation. However, outside of our industry there is also much more growth — and expectation of growth — and suppliers are newer.

What can paysites do to improve their relationships with suppliers? If we think the problem is communication then dialogue is the first step. Paysites can start the conversation.

Beginning this fall, Paysite Meetup will start sending out surveys to all paysite operators to gather suggested solutions for each supplier category.

Each paysite in the industry will be invited to share their thoughts on how providers can better serve both paysites and themselves. It’s a conversation that has been missing.

The survey will be sent quarterly and the results will be shared publicly with the industry. The idea is to aggregate the thoughts of a diverse industry so that suppliers can hear, clearly and from one voice, the solutions proposed by paysite operators.

As a provider to paysites I’m personally looking forward to the up-to-date information from my market.

Just as it is valuable to take some time in August to get out of my day-to-day and see a bigger picture, it will be great to hear the voice of many paysite owners on how we, as suppliers, can improve. I suspect that other suppliers will feel the same way.

Mitch Platt is co-founder of Vendo, which uses artificial intelligence to power its billing platform that allows merchants to continuously improve and grow their businesses.

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