The Print industry, which was flourishing on the back of volumes and advertising revenue when the economy was going good, had already been feeling the impact of the economic slowdown for some time, when the COVID-19 lockdown hit it adversely, impacting circulation of newspapers and magazines. The sector is now staring at a 33% reduction in Adex this fiscal, according to a Media Partners Asia forecast. It has forced media houses to take drastic steps - from slashing the number of pages and shutting editions, to lay-offs, salary cuts and leave without pay for employees.
This market, ostensibly distorted by market leaders, did not see the flaw in the business model when the going was good. To cite a hypothetical example, the cost of bringing out a broadsheet 48-page newspaper would come to around Rs 12-15, but it is sold for Rs 3-5 and about 40% of this is taken by the distributor. So the publication’s profits basically come from ad revenues. Reportedly, when the market leader, The Times of India, based its business model on ad revenue, every player had to follow the model to survive.
Recently, the e-paper of The Times of India went behind a paywall of Rs 199 every month, giving the reader access to multiple editions of the paper. Although a few publications such The Hindu and Business Standard have introduced paywalls in the past, and many others did it in some way or the other, the market leader in the industry is again setting the trend for others to follow. “This is not an initiative to drive revenues, and therefore, the revenue impact of the e-paper would be marginal now as well as in future,” says Sivakumar Sundaram, Chairman of the Executive Committee, BCCL, explaining that the move is to ensure assurance and authenticity of news for patrons. “By putting our e-paper behind a paywall, we are ensuring that those patrons who want to read the original version of the news can do so with full assurance of its authenticity. We discourage the consumption of downloaded and forwarded versions of the newspaper, as that can be misleading and dangerous for our society in these fragile times. The move to put our offerings behind a paywall for a token monthly charge is to demonstrate this value and give it the respect it deserves,” he adds.
Business Standard, which had put a part of its website behind a paywall about four years back, says the move will act as a trigger for a more robust growth in future. “The biggest challenge has been (and continues to be) to get people to pay when they have been used to free content for such a long time. The fact that our competitors had continued with a free strategy also impeded our growth. Now, in the post-COVID world, we find that most publishers have at least taken the first step to take their e-paper versions behind paywalls. We believe this will act as a trigger for a more robust growth in the future,” says Shivendra Gupta, EVP, Business Standard.
The e-paper of The Hindu went behind a paywall a long time back, however, their website also got a paywall in February 2019. Initially, it was a soft paywall. In October, 2019, they moved to the metered paywall. “We saw a huge jump in our subscriber base during the lockdown. Though we doubled the number of free articles on The Hindu’s website, increased the free trial period on e-papers, and took many more initiatives, yet more people decided to support our kind of journalism and paid for consuming the content. COVID-19 has phenomenally increased consumption of news the world over. It has also forced people to choose the trustworthy sources of news. So, we think post lockdown, the trend will continue. We believe that all the legacy news brands will build paywalls, we expect e-paper to lead the paywall adoption curve. In our opinion, most of the legacy news organisations will move their e-paper behind paywalls in the next 3-6 months. This will be followed by websites adopting paywalls,” says Pradeep Gairola, Vice President and Business Head- Digital Media, The Hindu Group.
PAYWALL IN HINDI AND REGIONAL LANGUAGES
The e-paper paywall may take off faster for English publications, while there may be delays for Hindi and vernacular newspapers to adopt this model. However, success of the move will depend on how efficiently the subscription model is optimised keeping in view the hike of newspaper circulation price, decrease in circulation numbers, resulting decline in readership and consequential impact on advertising revenue.
“We had launched paid model for our e-paper last year itself at nominal subscription cost. However, when we look at the subscription plans of the English newspaper brands, they were at par with the cover prices of offline newspapers. Hence, as the habit for reading e-paper is fairly low along with e-paper being restricted to only one reader, whereas physical copies are shared between multiple readers, success of expensive subscription plans becomes limited. We therefore kept the subscription plans at nominal cost as our initial aim was building the habit for the reader. In fact, now with COVID-19, it has become all the more imperative for e-paper/online content subscription models to be kicked into the system for sustenance and survival of the business,” says Probal Ghosal, Director, Amar Ujala Limited.
Ghosal says that the change in consumer pattern of reading e-papers online will further give impetus to the content monetization trend, which all brands will eventually get into.
“Our magazine e-editions have been behind paywall since they were available in the digital format. The newspaper’s e-edition went behind a pay wall in July, 2018. We are now working on a pay model for our website as well. I definitely see other regional language dailies following this route sooner than later. As a start, some of them have already moved their e-editions behind a pay wall,” says Mariam Mammen Mathew, Chief Executive Officer, Manorama Online.
“Businesses will face many challenges while trying to create this paywall – consumer acceptance that credible and original news has a value and overcoming the resistance to pay for a product that was available for free for all these years being the primary challenge. The other very important challenge will be finding the correct paywall strategy, which will vary for each company based on their content and user base. A one-size-fits-all strategy will not work,” adds Mathew.
WHY MONETISE ONLINE TRAFFIC?
One thing that seems to be on the rise is the consumption of news and information online. According to Comscore, COVID-19 and its impact on digital media consumption in India, increase in total minutes on news/ information sites was 23% in March, 2020 over February, 2020 and increase in total visits was 32%. According to Comscore Online News/ Information Landscape in APAC, in countries such as India and Indonesia, the ‘mobile-only’ segment, which consists of individuals who access sites exclusively through mobile, is among the highest in the world, especially so for News/Information. Another interesting observation of the report is that affinity towards News/Information in India is relatively even across all age groups.
No wonder Print publications are trying to monetise this traffic and get some value for their news and content by taking the first step of creating paywall for their e-papers.
THE DIGITAL NEWS MODEL
Even the digital news industry is solely dependent on ads which is unsustainable. Reportedly, distributors like Facebook and Google take most of the ad revenue and a very small fraction is left for the organisation. The reader gets all the content free and the model is again broken.
“The digital advertising business for publishers has been a disappointment for a long time. Structurally, it does not seem like getting fixed either. And at the same time cost of digital delivery is very high. Technology on digital is quite fragmented with multiple operating systems, devices and social platforms wanting individual attention. The spends on technology, therefore, eat up the savings in printing cost. The only way then to make sense of digital investments is to build a viable digital subscription model. A good mix of subscription and advertisement revenue will be ideal for digital,” says Gupta of Business Standard. “Given this background, we believe that most players will sooner rather than later have to move towards a subscription product. The biggest challenge for most players will be to migrate their digital assets to edit-driven assets. Currently, most players treat their digital product as a native platform where it is difficult to separate the genuine news from commercial native content. To get a customer to pay for digital products, publishers will have to clearly separate this. Thankfully, at Business Standard, our digital assets have been under edit control from the beginning. This had certainly helped us in being a pioneer in the digital subscription product,” he adds.
“Subscription model in India has always been a bit of a challenge. Even for existing international OTT platforms or other SVOD OTT platforms, it has been a struggle in setting up pure subscription models. In my opinion, the subscription-based model may work for curated content or researched articles but it may be a challenge for regular or routine news. Consumers must appreciate and see the value in content being made available behind the paywall,” opines Anand Bhadkamkar, CEO, Dentsu Aegis Network India.
PRINT AND DIGITAL TO CO-EXIST
The print product, which is going through a difficult period right now, is expected to rebound due to inherent strengths, and will be able to recoup losses as things normalise; however, the future will be a mix of adoption of monetisation of digital content and increasing cover price. “In the print industry, we have been noticing the stagnancy of advertising revenue for the last couple of years. Hence, the future of India’s newspaper business will be a mix of adoption of monetization of digital content/e-paper along with increasing the cover price of the newspaper, because both the things have to co-exist. So a trusted and reputed newspaper brand will be able to command higher cover price for sale of newspaper and similarly monetize online content. The price points will certainly be low for online subscription, particularly for language papers in Tier II/Tier III cities and rural markets audiences, while alongside increasing the cover price of newspapers keeping the overall brand profitability,” says Ghosal of Amar Ujala.
“Though initially contribution of e-paper subscription model will be very low in the overall scenario, but due to fast-changing consumer habits and acceptance for e-papers and online content on the rise, there will be a change in the future as we go forward,” he adds.
Internationally, successful digital products and the Print part of their business have been doing well since the time they have taken their digital version behind the paywall. “Future has a role for paywall as well as ad revenue. Nowhere in the world are only ad-based models able to support a large quality-driven news organisation. While small niche sites have been able to become viable with only subscription revenue. But larger news organisations need a balance between subscription revenue and ad revenue. Either of them alone may not be able to support high quality journalism at scale,” says Pradeep Gairola of The Hindu Group.
“By putting our e-paper behind a paywall, we are ensuring that those patrons who want to read the original version of the news can do so with full assurance of its authenticity.”
Sivakumar Sundaram
Chairman of the Executive Committee, BCCL
“The future of India’s newspaper business will be a mix of adoption of monetization of digital content/ e-paper along with increasing the cover price of the newspaper, because both the things have to co-exist.”
Probal Ghosal
Director, Amar Ujala Limited
“A very important challenge will be finding the correct paywall strategy, which will vary for each company based on their content and user base. A one-size-fits-all strategy will not work.”
Mariam Mammen Mathew
Chief Executive Officer, Manorama Online
“The subscription-based model may work for curated content or researched articles but it may be a challenge for regular or routine news. Consumers must appreciate and see the value in content being made available behind the paywall.”
Anand Bhadkamkar
CEO, Dentsu Aegis Network India
PAYWALL AS PER USER PROPENSITY METER
There is always a fear of losing unique visitors on the news site when one creates a paywall, in terms of traffic. In such a scenario, the news sites apply the paywall as per the user propensity meter – under which a few stories are made available for free to non-subscribers. The paywall will show on content after the user has hit the maximum article consumption limit.
