News publishers' digital dilemma

Do audiences reading ad-funded news deserve only fake and inaccurate stuff? Does the rise of subscription-led news make good journalism a privilege of the well-educated or well-to-do? Does it kill collective discovery and consumption of news, thereby harming a democracy? As news publishers find succour in subscription revenues, these are some of the questions worth worrying about. 

The Digital News Project at the Oxford-based Reuters Institute for the Study of Journalism (RISJ) tracks online news and its impact on journalism and the business around it. Earlier this month, it released “Journalism, Media and Technology Trends and Predictions 2022”. 

Three-fourth of the sample of 246 editors, chief executive officers, and digital leaders across 52 countries say they are confident about their company’s prospects for 2022. “A key part of publisher confidence has been the continued growth of subscription and membership models through the Covid-19 pandemic. The New York Times now has 8.4 million subscriptions, of which 7.6 million are digital. For many of these early-movers, digital revenue now outstrips print and many upmarket titles can see a path to a sustainable future. But so too can a number of smaller digital-born publishers, such as Dennik N in Slovakia, Malaysiakini in Malaysia or Zetland in Denmark,” says Nic Newman, a senior research associate at RISJ, in the report. Mr Newman has been anchoring the report since 2012. This is in line with what is happening in India. Many of the early movers and legacy brands like The News Minute, The Quint, The Hindu and Times Internet are focussing their efforts on subscription revenue — with good reason. 

It takes thousands of reporters on the ground, lots of time and money to get the quality of journalism that informs a healthy democracy. For too long, publishers have relied on advertising — which brings 70-80 per cent of a newspaper's revenues — to fund news. Even as the internet grew, print circulation and revenues continued to rise, making it one of the most profitable segments of the Rs 1.38-trillion Indian media and entertainment business. 

According to Comscore data, 18 of the top 20 news sites in India are from legacy brands. The Times of India, NDTV or The Indian Express, among others, get huge amounts of viewership/readership online. But more than half of these come through Google and Facebook. Google reaches almost all of the 468 million internet users India had in February 2021. Facebook is marginally lower at 436 million. Not surprisingly, then, the duo walked away with over 90 per cent of the Rs 23,500-crore digital ad pie in 2020. This leaves just 10 per cent for hundreds of digital publishers. This dominance has invited the attention of regulators. In Australia and France, Google has been forced to pay out to publishers. In India publishers recently dragged Google to the Competition Commission of India. Meanwhile, for years offline subsidised digital growth. 

The pandemic destroyed that model. As ad revenues plummeted even while audiences rose, publishers figured the best way to future-proof the business was by going pay. Currently, India has just about a million subscribers to news sites. Entertainment OTTs have over 100 million. It will take many years, lots of money on tech and content for news publishers to get to those numbers. 
 

That brings us to the questions this column raised in the beginning. Will this rise in subscribers create a walled garden of the well-informed? Does it leave the masses reliant on an algorithm-driven, free news cycle that is being weaponised by political parties and other groups to amplify fake news and polarise society? Mr Newman’s report raises the issue of “information inequality” and points to some of the experiments around the world to deal with it. The Daily Maverick in South Africa offers a “pay what you can afford” membership. In Portugal, lottery funding has been used to fund 20,000 free digital news subscriptions for eight media outlets. 

In India, many of the newly minted news sites ask for reader contribution or donations (not subscriptions) so that they remain open to access. Others experiment to get more from advertising. Inshorts, one of the largest news aggregators in India, launched an open platform, Public in 2019. Till early 2021, it had 60,000 creators, including ward members, MPs, MLAs among local residents in hundreds of small towns, who use it to upload short videos on local happenings and news. Last year, Public brought about 80 per cent of Inshorts’ 75 million unique users, contributing significantly to the Rs 102 crore the firm made in March 2021. Incidentally, Mr Newman does say that news on TikTok or short videos will be the battleground to get to younger audiences. But it could easily become a cesspool of fake news. 

There are no easy answers to the question of what will replace the broken business model of news journalism. While subscription is a healthy trend, not all ad-funded news is junk. There are many brands where owners have the vision and more importantly, the spine, to stand by good quality journalism. You need more of those, a good dose of capital and some out-of-the box thinking to get journalism out of its rut. 

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