The push for pay — now or never
The drama over the chats between Arnab Goswami and Partho Dasgupta makes one thing clear. It is time to break the hegemony of advertising over news media; it is time to push for subscription revenues.
Mr Dasgupta, the founding CEO of Broadcast Audience Research Council, and Mr Goswami, founder of Republic TV, have been accused of fiddling with television ratings. The Mumbai police’s charge sheet has over 500 pages of pretty damning Whatsapp chats between the two. The opposition has asked for an enquiry by a Joint Parliamentary Committee; there is shock at some of the stuff Mr Goswami knew. The chats torchlight the nexus between politics and the media, but they also show how desperate news broadcasters are about viewership numbers. At its root, the “rating scam” is a manifestation of a bigger problem — news media’s abject dependence on advertising and, therefore, the need to fake the numbers. Take the three main media formats you get your news on — television, newspapers and online.
All of the ~3,000 crore that India’s 400-plus news channels made in 2019 came from advertising. This makes for an industry full of brands trying to get to the largest number of eyeballs, which are then sold to advertisers. This, in turn, leads to a race to the bottom of the barrel on standards. Indian news channels are a global case study in bad journalism, thanks to screeching anchors peddling hate and misinformation.
The ~29,570-crore newspaper industry gets 70 per cent of its revenues from advertising. Newspapers recover at least some of their cost of production from the cover price. Most newspapers jump in and out of circulation audits (which certify their sales) and go on the warpath against readership numbers when their rankings slip. By and large, though, Indian newspapers continue to report news and haven’t suffered as big a credibility crisis as TV has.
The tough-to-estimate online news business gets almost all its money from advertising. There is no industry standard for page views or unique visitors; websites and apps cherry pick their own server data to prove that they are the largest.
When news consumption started shifting online in the late 1990s, the expectation was that newspapers with their deep reporting capabilities would lose audience and revenues offline but gain it back online. That did not happen. Google and Facebook walked away with the audience by aggregating newspaper content. As a result, in the US, they take 56 per cent of all digital advertising, while Amazon muscles in on a nice chunk of the rest. For over a decade now, newspaper publishers in the US, Australia and other countries have fulminated against this duopoly.
In India more than 70 per cent of the ~22,100 crore that advertisers spent online in 2019 went to Google and Facebook. But since print had been growing in double digits, publishers flush with 25 per cent operating margins, didn’t bother much. In the last two-three years, readership growth has slowed.
Then came the pandemic. Both circulation (copies sold) and ad revenues tanked even as online traffic for most newspapers grew 5-10 times.while circulation is climbing back, online for most legacy papers continues to show huge growth. Most publishers are doing two things.
One, they have been taking cover prices up bit by bit. Two, across the board — English, Hindi and other language — publishers are working on a subscription model for the e-paper and for the entire online offering.you won’t hear too many announcements but some of the largest brands are gradually locking up their websites. The target for many is to get at least 50 per cent from pay revenues and derisk the model.
The evidence that this works comes from entertainment. The largest firms are shifting from business-to-business (selling to advertisers) to businessto-consumer (selling directly to consumers) model. Whether it is on pay TV (HBO, ESPN) or on streaming (Netflix, Amazon Prime Video) or in theatres, viewers are happy to pay for exclusive or high-quality programming.
Indian TV broadcasters haven’t managed to take prices up and invest in programming because of regulatory controls on pricing. However, films and streaming lead with direct-to-consumer models.
A similar move in news has worked for brands such as The New York Times, The Economist and Financial Times. And in India on a much smaller scale for this paper or The Ken, among others.
The move to garner more from cover prices or subscription from the mass brands then is wonderful news. If 50-60 per cent of news media revenues come from pay, it frees the industry from the need to cater to the lowest common denominator. It also attracts advertisers who don’t want faceless algorithm-driven platforms but specific audiences. This, in turn, means less reliance on ratings, readership and advertisers, and more on good journalism. Many of the country’s top Hindi publishers now talk of investing more in research and deep expertise in subjects — the stuff that brings subscribers in.
There is, however, one caveat here — we as readers/viewers have to be involved. It is the belief that good journalism needs to be funded and freed from dodgy owners or advertisers that has led to the revival of brands such as The Guardian in the West. Reader contribution is an accepted way of raising money, even in India.
If news is the intellectual fodder that informs our decisions as citizens then large portions of this country have been consuming junk food for too long. To move to healthy food and accept that we need to pay a higher price for it is a tough ask. But if the largest media houses in India can do it, it will be an evolution worth watching.