Profitable in 100 days: Ananda Vikatan’s digital subscription strategy

India’s Ananda Vikatan has a long and rich history in print, but the publication has also been very active online, and launched a digital subscription model fairly early on, which quickly proved itself successful.

by Neha Gupta | February 20, 2019

Ananda Vikatan was established in 1926 as a monthly publication. Over the years, it evolved into the Vikatan Group in the Tamil Nadu magazine industry. The Indian Readership Survey in 2017 saw Anada Vikatan as the second-largest circulated regional weekly.

In this interview, the group’s Managing Director, Srinivasan Balasubramanian, tells us how the group forayed into the digital space more than 10 years ago, while still being profitable.

WAN-IFRA: Ananda Vikatan was India’s second largest circulated magazine in 2017 and the largest circulated Tamil weekly magazine. When did you decide on digital subscription?

Srinivasan Balasubramanian: Ananda Vikatan boasts of a strong legacy in content creation, curation and credibility in the magazine industry for over 93 years.

In the late 1990s, during the early internet era, we forayed into the digital publishing space as an exploratory medium rather than as a subscription based one.

Our digital journey was fuelled by our desire to serve our loyal NRI readers whose copies were delayed in transit, hence becoming irrelevant in the ever-changing digital space.

Our content was free, but Vikatan was incurring substantial investments in infrastructure costs. To recover those costs, we decided on digital subscription in 2005 as an experiment. To our surprise, our operations turned profitable in a span of about 100 days.

Please break down for us the brand’s subscription model, and the thought process behind its implementation and pricing.

Our magazine and e-books have been behind a paywall since 2005. Readers can purchase products for as low as Rs 15 ($ 0.21) for a single issue, to Rs 16999 ($ 239.36) for a lifetime subscription to all our products, except e-books.

Our highest-selling subscription product is the annual, all-magazine combo pack of 12 that includes access to archives since 2005. This product retails for Rs 1499 ($ 21.11) and sells for an average price of Rs 1249 ($ 17.59).

The thought process behind the pricing model is simple – we took the magazine pricing, deducted the trade commission, the paper and printing costs and selling overheads, and arrived at the mean content creation, curation and publishing cost.

How have your print readers responded to the paywall?

We have been operating on a freemium model where our readers, who fall under two groups, enjoy a limited amount of free content.

· Traditional print readers – both domestic and Tamil diaspora – migrating online because of ease of access. Paywall is not a restriction for them.

· New digital readers, who can be classified as ‘social scanners’ and ‘content discoverers.’ Social scanners are content skimmers who access free content across the internet. Content discoverers display strong brand connect and loyalty. They are willing to pay for curated content and go beyond the paywall.

Publications are increasingly putting long-form, investigative, exclusive content behind paywalls. Do you see hard news being monetised similarly in the future? Tell us about the content you put behind the paywall.

Vikatan’s storytelling abilities are a derivative of its strong magazine background, that is narrative, longform and often exclusive. We have evolved our own investigative brand of journalism through Junior Vikatan Magazine.

Our readers don’t come to us for breaking news. Our exclusivity, curation and credibility are the core values that drives Vikatan’s journalistic philosophy.

Subscription is a compulsive step for loyal readers, both online and print. In this era of fake news and user generated content, online readers are slowly evolving from being passive consumers of junk to active consumers of credible content, and they are willing to pay for it.

We have been putting high quality long form content behind the paywall for a long time. We are now serving our readers with exclusive long form and interactive content. A plan to have more non-print content behind the paywall is in the works.

Media houses in India are facing declining advertising revenues. How do you think implementing a paywall has affected this?

On the contrary, our digital revenues – including pay and ad revenues – have been growing by a compound annual growth rate of 35 percent over the past four years, ever since we started our digital transformation journey.

We have advertisers who swear by the response and audience connect on our site. Several of our ad campaigns are response driven.

A paywall strategy for content is an equally compelling revenue model. Though not a substitute for declining ad revenues, it is a conscious move towards quality content and reinventing core journalistic ethos through credible content. I’m confident of news media finding alternate revenue sources to (or sans) ad revenues.

Paywalls can cut into the number of readers coming to the site and decrease the effectiveness of the advertising space. Do you agree? What would you say are some cons of implementing a paywall? 

Implementing a paywall is a balance that every media house learns to achieve through experience and experimentation. We have been practicing this for more than a decade.

Do you see mainstream media implementing the paywall soon?

I would love to see mainstream media follow our example. Business Standard is doing it; pure digital players such as The Ken and Bloomberg Quint have also been practicing it in India.

However, when I peer at the crystal ball, I would say, not soon. It is unfortunate that the greatest of risk takers and marketing genius that led to the outburst of the newspaper and the print revolution in India, are refraining from taking the plunge and pricing their content.

When Facebook, Google and YouTube are shoring up the bulk of potential ad money that flows through internet pipes, I am confident that a pay-to-read model will prevail.

If Netflix, Amazon Prime and Hotstar can charge for premium ad free content, why can’t we?

What is the brand’s revenue from print circulation? Could you give us comparative percentage of the last three years?

Anandha Vikatan boasted of the second-largest regional magazine readership in the Indian Readership Survey 2017, with a total readership of 2708 (000s) TR.

The percentage of print circulation revenue has remained relatively stable over these past years, even though the advertising revenue has, unfortunately, faced pressure.

Are paywalls a way to make up for lost print circulation?

Why would I make up for lost circulation? I am creating new readers online – on mobiles, on applications.

Digital, now, is a formidable part of our ecosystem, contributing (paywall and advertisements, together) 10 percent of our FY 18-19 topline. In three years, this number will be a third.

“Indians don’t pay for news,” “India is not ready for paywall.” How true are these phrases?

With an internet user base of 450 million and growing, Indians are adapting to a digital news consumption culture and will, I assume, pay for the value received.

The question is: Would we be willing to understand the desire of the customer value perception and able to consistently deliver it?

Neha Gupta

Multimedia Journalist

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