Robert Anderson in Prague -

Piano Media, the Central Europe-based media paywall company, has acquired the much larger Press+ of the US for an undisclosed sum to become the market leader in payment solutions for media publishers.

The deal, orchestrated by Central European private equity firm 3TS Capital Partners, represents a significant  consolidation of the paywall business  as sentiment improves following the move to paid-for content by well known publications such as The New York Times.

“For a while people said the Wall Street Journal and Financial Times were unique cases as they offered business content. But if you offer content that is valuable and distinct there is a market for that,” said  new chief executive Kelly Leach, who previously managed online subscriptions at the Wall Street Journal. 

Combining Piano Media and Press+ brings together the market leaders on both sides of the Atlantic.

Press+  was founded first in 2009 by media entrepreneur Steven Brill and former Wall Street Journal publisher Gordon Crovitz and has grown to become the largest digital subscription service for media publishers. However, it  remains focussed on the US, where it runs customised metered paywalls  for local newspaper groups. “We have data on 560 publications around the world,” Crovitz told bne in an interview, adding: “There is a lot of publisher-specific technology to make this work.”

Piano, which was founded in Slovakia in 2011, has become the European market leader with 73 websites  by focusing on small, linguistically isolated markets where it can persuade publications  to club together to establish metered paywalls, enabling clients to avoid incurring big investment costs or risking the loss of advertising revenues to competitors. 

By combining Piano with Press+, which has more than eight times Piano’s revenues, 3TS believes the group will be able to use shared best practice and data to accelerate growth. “We saw an opportunity to acquire Press+ through Piano Media, our existing portfolio company, consolidating the industry’s two largest players and enabling the combined entity to have unrivalled resources, technology, data and knowledge to help clients further build new sources of revenue,” Pekka Mäki,  3TS managing partner,  said in a statement.

Piano believes it can spread the digital subscription model to new markets in Latin America and Asia. “Latin America and Asia are going to quickly become the new frontier for content monetisation and follow the trajectory of the US and Europe,”  Leach told bne in an interview.

Press+ was put up for sale by the Nasdaq-listed industrial printing group R.R. Donnelley, which bought it for an estimated $45m in 2011.

3TS, which manages more than  €300m of assets, became Piano’s largest shareholder by investing €2m  in 2012. It has boosted its investment through the Press+ acquisition, together with AWS Gründerfonds of Austria, Neulogy Ventures of  Slovakia and North Base Media of the US.