Last month paywall technology companies Tinypass and Piano Media merged, creating Piano, a new SaaS company specializing in advanced media processes and paywall optimization software. We had the opportunity to talk with Trevor Kaufman, the former CEO of Tinypass and the new CEO for Piano, to get an inside look at what the merger means for the subscription industry.

SI: What are the benefits of the merger?

Kaufman: At Tinypass we had created a new platform called VX which is a really robust set of APIs and foundational interfaces for setting up business models on websites. That platform was pretty powerful, but it was missing one key piece. We are working on an exciting new tool for publishers which will simplify the paywall and subscription process. We’ll be announcing that soon, so stay tuned for more details.

On the Piano Media side, they are a merger of Press+ and the European Piano Media business. As a result, their clients are either on the legacy Press+ platform or on the legacy Piano Media platform, so now we’re re-platforming all the clients around the world on this new VX platform, which is now called Piano VX. That’s really exciting.

On the Tinypass side, there were a lot of things that Piano Media had that would have taken us a long time, if not forever, to build as well. They have a great global salesforce, they have a really tremendous data science team in Europe, and they have a really incredible customer base around the world – everywhere from China to Dubai to South Africa and, of course, all over Europe – and a great European team to service those clients. As a result, we’ve really been able to bring together a lot of the great aspects of the Piano Media business and a lot of great aspects of the Tinypass technology and really unite everything around one platform.

The technological aspect is a big deal, the commercial size of the company is great and, collectively, between the constituent pieces, the company has combined page views of 4 billion a month. That’s a tremendous amount of data collection, not only of browsing habits, but of conversion behavior, and how many users are converting to offers to register or pay, etc.

Now we’re able to do really exciting things where we can isolate the behaviors that tend to lead to conversion, which is a real Holy Grail for us and very exciting. Just the amount of raw data that we’re able to bring to bear – to be able to provide subscription sites with benchmarks that are put together with baskets of companies that really do resemble them is really unique, so we’re very excited about the big pool of data.

The benefits of the merger are really those three things: the scale of the company and the client services organization, the technology behind it, and this enormous pool of data.

SI: What needs can Piano fill that other companies cannot?

Kaufman: We have the best product market on the market bar none. I’d stand it up against any other software platform. I would encourage anyone to challenge me on that. Secondarily, we have more data on what drives conversion than any other business, and I’m really pleased to say our clients are really benefiting from that.

SI: How are your clients benefiting from that data? Are you sharing that data with your clients?

Kaufman: Yes, that’s right. Our client revenue team is tasked specifically with helping our clients make more money with the platform, so it’s a strategy and tactics team of analysts who look at comparative sites and look at our clients’ own data and continually make best practices recommendations for how they can improve. It’s very client specific.

We’re also developing more and more tools around data. What we find is that most of the data tools that our publishers are familiar with don’t tend to make it easy for them to isolate their loyal audience. They tend to be focused on aggregate traffic, and not on loyal segmentation models. We’ve been able to help them understand the behavior of the loyal audience versus the masses that visit their sites through social media.

SI: What is the advantage to a publisher using Piano instead of building their own paywall?

Kaufman: There are so many advantages, but I would say the primary one is agility. There is a tremendous amount of time and cost associated with building your own platform. We have more than 50 developers right now who do nothing but write code about these exact types of business problems. I can’t imagine that it would be effective in terms of cost, time, or functionality for a publisher to try to create that themselves.

Moreover, there’s a real problem with building software internally. You can’t amortize the investment over time, and you tend to build the software only to accommodate the exact model that you have in mind at that moment.

What’s been happening in the media business is the media landscape is changing very dramatically. You might want to launch a modified business model a month later. If you’ve built things yourself, that’s a brand new IT project and more delays that mean you don’t get to react as quickly as you might otherwise.

SI: Will all Piano Media clients have to migrate to Tinypass?

Kaufman: Yes

SI: Do you think paywalls are necessary for news organizations to evolve and remain sustainable?

Kaufman: Yes. CPMs have been basically flat for years. Meanwhile, the concentration of media dollars on the desktop have remained the same, but now that behaviors are switching to mobile devices, where CPMs are much lower, there’s much more concentration among major players like Facebook, and ad-blocking is becoming such a major factor, the writing is on the wall for publishers that are trying to run a business based on display advertising alone. It’s a losing proposition.

SI: Is your product scalable to micropayments?

Kaufman: It’s an option we do offer. At Tinypass, micropayments were part of our core concept, and what we found was that very few publishers really wanted to charge using micropayments. We’re experimenting with micropayments in other areas like for viewing ad-free versions of sites, but it is still really in its infancy. Right now we haven’t seen the demand from publishers to charge micropayments.

SI: Has the paywall adoption rate leveled off, or is it increasing with companies like Time, Inc. adopting the paywall model?

Kaufman: Paywall adoption is definitely escalating; there’s no question. Our sales pipeline today versus where it was a year and a half ago is probably 10 times as large.

SI: What changes do you anticipate to paywalls and the subscription business model in the next few years?

Kaufman: There are two things I think are going to happen. One is that it will become less of a one-size-fits-all mode. It’s going to become far more nuanced. I think you’ll have differentiated pricing for different types of users whether they’re local or farther away from the publication, whether the people want to view ad-free or not, etc. I think there are all different kinds of models that are going to emerge as people have more ability to test and experiment. I think that’s a big shift. I think it’s going to become much more common.

I think there is a sense now that most of the sites you go to are free, and I think that’s really going to change. The “everything on the web is free” time is coming to a close, and the web’s going to be just like television is where there’s certain channels of free content and a lot of channels with paid content.

SI: Will Piano VX be adaptable to the new forms of payment like Android Pay and Samsung Pay?

Kaufman: We support “in app” payments. I think we’ve been very experimental with payment mechanisms. At various times we’ve taken Google Wallet, Dwolla, and Bitcoin. What we’ve seen traditionally is that the number of users who actually use those innovative payment methods is very, very small. What winds up happening is the more payment options you put on a page, the more confusing it is and the more it slows purchasers down.

If I had to guess, I’d say we will continue to support some of the major platforms like credit cards, PayPal and Amazon payments, but honestly, it remains to be seen if there are enough wallets in any of these payment mechanisms, and if they do or don’t get exposed within the web browser for us to figure out if we want to support them. For us, supporting additional payment methods is relatively easy. It’s just a question of adoption.

As you go outside the U.S., there are a lot of alternative payment methods. For example, direct bank debit is very common outside the U.S. where you, in effect, log in to your bank account in order to pay, and that’s something we support internationally.

For example, if we sign up a publisher in South Africa as we recently did with Mail & Guardian, it means integrating with local South African payment providers, because the constellation of credit and debit cards is different, and they sometimes have direct debit technologies, etc., so we’re integrating with new payment technologies all the time. As far the headline-getting ones, for better or worse, we have to wait until they get more adoption.

SI: Re/code cited revenue projections for Piano at $30 million and Tinypass at $10 million for this year. Do you have revised revenue projections?

Kaufman: Our combined revenue projections for this year are a combined total of $40 million.

SI: What are your plans for growth?

Kaufman: We’ve been talking for months, so most of the mechanics of the merger are behind us. We’ve already moved into the same office space at One World Trade Center in New York. We’re already fully integrated. Right now what we are focused on is scaling up, so you’ll see us bringing on more clients, more staff and more sales people in countries around the world.

Trevor Kaufman is the CEO of Piano, which can be found at www.piano.io. Dana Neuts is a contributor to Subscription Insider.