When readers pay for news

Does a slight shift towards paid subscriptions herald the arrival of pay revenues for online publishers?

Is there hope for pay-for-online news? Most people consuming news online believe that plenty of free options makes paying for news irrelevant. That roughly is what the Digital News Report, brought out by the Oxford-based Reuters Institute for the Study of Journalism (RISJ) every year, says. However, the 2017 report, which surveys 30 countries, has one big exception.

Americans paying to access online news doubled from eight per cent in 2015 to 16 per cent in 2016. This includes ongoing subscriptions, one-off payments and donations. This rise, popularly referred to as the Trump Bump, came in the run-up to the election and subsequent victory of Donald Trump as president of the United States. The New York Times added around 500,000 digital subscribers in the six months since the election and The Wall Street Journal has added around 200,000 members, says the report. A deep dive into the survey data by Richard Fletcher, a fellow with RISJ, shows that the proportion of people aged 18-24 paying for online news rose from four per cent in 2016 to 18 per cent in 2017. “Much of this growth has come from those on the left and the young effectively showing support for the media’s efforts to hold the president and his policies to account,” says the report. Almost 29 per cent of the American respondents said a key reason for paying was because they “want to help fund journalism”. 

That is what a dozen-odd experiments in getting readers to donate or pay for news are discovering in India. “Millennials are all right paying for news. They don’t have an institutional memory of not paying, of disposing off stacks of newspapers as rubbish. They pay for Netflix or Gaana, so they are okay paying for news,” pointed out Rohin Dharmakumar, co-founder, The Ken at Digipub, a digital publishing event last month. The Ken, launched last year, offers one original business story of 2,000-5,000 words every morning. It charges Rs 2,750 a year (excluding goods and services tax) and has 20,000 subscribers for its newsletter. Of these, paying subscribers are in “the low single digit thousands,” says Dharmakumar.

In May 2016, Shivendra Gaur started Rocket Post Live. It offers local news from Pilibhit district in Uttar Pradesh through WhatsApp. Of the 14,000 people who use the service, more than 11,000 pay Rs 100 each, a year. The Wire is finding that both traffic and donations are coming in as it does investigative and comment pieces that newspapers and news channels don’t touch. It has raised Rs 7 crore in grants and donations within two-odd years of its existence. There is VCCircle, this newspaper and several others that are attempting to charge a fair price for the journalism they provide. Then there are some attempts at e-commerce from NDTV and ABP. 

But so far advertising drives the Rs 7,690-crore digital media market in India. It makes for a flawed online news ecosystem.

This is because like in the rest of the world, a bulk of the digital ad spends end up with Google and Facebook. That leaves publishers, who spend crores in original reporting, writing and putting the content online, with a few paise per reader as their share. If they sell ad space directly, the rates for news rarely go beyond Rs 30-150 for every thousand readers, depending on language and other metrics.

To get better rates many resort to native advertising, the biggest source of revenues for news websites. It works by “looking like an editorial”. This means using the same style, font, language and design as an editorial. In December 2015, the US Federal Trade Commission had listed guidelines to ensure that consumers are not deceived. In India the Advertising Standards Council of India has set out basic principles. But it remains a grey area ethically. 

Pay, it seems, is the only the way to go. “In five-seven years, I don’t think any amount of digital revenue will offset the loss from print unless we monetise our audience through pay or make the site commerce-enabled,” emphasises Pradeep Dwivedi, CEO, Sakal Media Group.

A lot rides then on the first few brands trying to crack online pay revenues.

Twitter: @vanitakohlik