Caption: The panel discussion at Digital Media India included, from left, Trushar Barot (BBC), Arpan Chatterjee (AVP and Business Head, The Hindu Group), Himanshu Gautam (Head of Digital Business, Amar Ujala), and Siddharth Varadarajan (The Wire).
Moderated by Barot, the panel discussed revenue sources for a non-profit organisation and how it differs from mainstream publications with a variety of revenue models in place.
Here are some excerpts from their conversation, as well as the entire session in audio.
Trushar Barot: How does The Wire’s business model work and how was it set up?
Siddharth Varadarajan: The Wire, started in May 2015, is a not-for-profit enterprise. We chose to be a non-profit enterprise, because the founding editors realised that ownership, private ownership for profit, investor and advertiser pressure, and the quality of journalism were all linked.
A lot of rot that has set into big Indian media is a product of the underlying political economy, how the news business runs and how it is paid for.
“For us, the practice of independent journalism meant not just standing firmly on traditional editorial values but also trying to make a break with the existing political economy of the media,” – Siddharth Varadarajan, The Wire
Traditionally if one leaves a big organisation, the next step is to find angel investors and negotiate. We, however, started The Wire on love and fresh air.
For the first year, we ran it without money, largely trading on the goodwill we had accumulated with writers, reporters and photographers around the country who shared with us our sense of frustration regarding the big media. All these people wanted to do something to support a new initiative.
A new foundation, that shared our concerns about the state of Indian media, backed us. We are now in our second year of funding.
The Wire has strongly believed that philanthropic support is essential to get a boost at the initial stage, but the most important part of our business model was solving the puzzle of how to get readers to pay.
Our business model has a direct contract between editors and journalists, and readers and viewers. This way, we were able to knock out the intermediaries – advertisers and investors – and have a healthy relationship with our readers where we produce journalism in the public interest.
There is a significantly large section of the public that sees value in what we do and is willing to pay for it.
The trick has been to ensure that these people make not just a one off payment but recognise our efforts and keep contributing to sustain The Wire and other such initiatives.
Barot: How has Amar Ujala shaped up?
Himanshu Gautam: Amar Ujala was launched in 1948 in Agra and has seen an immensely successful journey. I have been running the digital business for the group for three years now.
The company has a record of delivering newspapers 15-20 minutes ahead of its competitors, even in tricky terrains.
We have around 19 editions and are on the third spot, nationally, as per the latest Indian Readership Survey results, readership wise.
“Today we have 45-50 million monthly visitors across all our digital properties. We do not have any reader revenue on digital right now, but there are plans,” – Himanshu Gautam, Head of Digital Business, Amar Ujala
We realise that ‘one size fits all’ does not apply to reader revenue schemes. I’d like to quote Jonathan Zittrain, an internet law professor at Harvard, “If you’re not paying for the product, you are the product.”
Barot: Could you tell us a bit about The Hindu’s workings?
Arpan Chatterjee: In an online reader survey conducted in 2014, we found that 76 percent of those users were reading our newspaper and a whopping 82 percent “did not want to pay for content.”
Cut to 2017, we have two digital products under paywall, the e-paper, and we have decided to put two more products under a paywall. More than 50 percent of our readers are now online users.
The print side of our business has one of the largest subscription rates in the country.
As publishers, we’re trying to either identify a need or create a need. Several international brands exist that publish only 7-8 informative and important stories every day, and people are paying for them.
The user does not need to go through 30 stories every day, reading a few good ones takes care of their needs.
The Ken publishes only one story a day that is very well narrated, is accompanied by analytics and adds value to the knowledge income of the industry.
A few things that are important to publishers are – user information to build their data management systems, user engagement and return frequency.
“Finding the catchment area is very important. Just putting out an ad that invites the user to click and pay won’t work,” – Arpan Chatterjee, AVP and Business Head, The Hindu Group
A possibility to explore is the bundling up of two publishers depending upon what content strengths they bring in and finding out if then the user would pay for it.
Apart from the e-paper, The Hindu has a very interesting pricing strategy – monthly, annual and 10-year. Our readers know the quality of the content we deliver.
The objective is to have equal, if not more, dependency on the subscription model. Our pricing strategy took a new turn when we did two flash sales – during Christmas 2017 and just as the new year started. We were able to collect a revenue of Rs 25 lakh (about 30,000 euros).
Our next step is to get into micro-paywalls. But the questions to ask the public are would they pay for a webinar with a business personality or an industrialist?
Barot: Most of the revenue generating models we’ve seen in news organisations have been for non-news elements and services. The Wire is a purely news player; What are the specific challenges about earning when you don’t have any additional income source?
Varadarajan: The Wire has not said no to non-news sources of revenue, but we are a very small team right now with only two non-editorial employees, out of 34. For us, revenue comes in 3-4 forms.
The first is philanthropic foundations and generous donations of high network individuals who see value in what we do.
We have also turned on monetisation for Facebook Instant Articles and YouTube videos. Our video content, especially Hindi, has been very successful.
“We don’t have ads on the site and I’m not keen on having them. I feel it’s better to focus on journalism and appeal to readers to pay and support what they like and read,” –Siddharth Varadarajan, The Wire
We have also signed up with outlets such as Instamojo that provide a steady stream of revenue.
To survive in the long run, we need to look at raising initial targets from anywhere between Rs 80 lakh (about 95,120 euros) to Rs 1 crore (approximately 120,000 euros) every month.
Barot: The Wire was recently mired in a controversy over the coverage of Jay Shah and the lawsuits that followed. You had to take down stories. What impact does a story like that have on reader revenue?
Varadarajan: In case of mainstream media, the interests of the advertiser and reader are invariably opposite to each other. In our case, however, the controversy reinstated the readers’ trust in us.
There is a Rs 40 crore (approximately 4,756,000 euros) lawsuit form Rajeev Chandrasekhar, a Rs 100 crore (about 11,890,000 euros) lawsuit from Jay Amit Shah, three suits of Rs 100 core each from Adani, one criminal defamation case from Jay Shah, two from Adani.
Legal process is a form of harassment for us. However, whenever there is a new case against it, and online publications report on it, there is an uptick in donations.
The legal terrain for any journalism that speaks the truth is very hostile. We don’t have political orientation, we’re independent.
Barot: How much of The Wire’s business model is relevant to mainstream businesses?
Gautam: There are several models in place to keep in mind. The Guardian, much like the Wire, has a donation model. The WSJ and NYT, both have a couple of millions of subscriptions on digital right now.
People who have been focusing on dual models of monetisation, I personally, haven’t seen them be very successful. Those who have solely focused on reader revenue, have seen success.
An independent journalist in Bareilly has been running WhatsApp groups, where he has around 8,000 subscribers, who pay him Rs 100 every month (about 1.20 euros) to get news alerts every morning. But how scalable are these models?
“A word of caution – if you really want to follow reader revenue, concentrate solely on it. Chase audiences, not revenue,” – Himanshu Gautam, Head of Digital Business, Amar Ujala