At WAN-IFRA’s recent Digital Media India conference, Rohin Dharmakumar, spoke about India’s first subscription-only news brand.
Dharmakumar was joined by FT’s Head of Product, Gadi Lahav, who talked about the brand’s subscription strategies and metrics, and Srinivasan Balasubramanian, the Managing Director of India’s Vikatan Group, which was paywall pioneer, launching theirs more than a decade ago.
The Ken boasts of being India’s only purely subscription-based news brand, and has proved that mastering a niche can be a lucrative business for publishers.
The brand unapologetically follows a motto that is widely considered an anathema in the news business – selling journalism.
“We need to sell journalism because journalism deserves to be a product. The editorial and business functions of a media house cannot be separate from each other. Quality content and a good product need to go hand in hand,” said Dharmakumar.
Launched in 2016, The Ken is a business news platform that publishes one original story, with in depth reporting, per day. Each of their stories is deeply researched and substantial, with most being at least 2,000 words, sometimes going up to 5,000 words.
In India, an annual subscription costs Rs 3,245 (approximately US$46); outside India, that rises to about $108 (INR 7486). The brand has never discounted its subscription cost and has been growing at a rate of more than 100 percent for the past two years. As of the end of 2018, they have more than 10,000 active subscribers.
The brand has various subscription products. They diversified into corporate and patron subscriptions from retail only subscriptions. They also have campus subscriptions such as Harvard Business School, Indian School of Business and IIM Ahmedabad.
“The beauty of the subscription business is that each year the quantum of recurring revenue from your subscribers only increases. If you do your journalism, revenue will come in,” –Rohin Dharmakumar, co-founder and CEO, The Ken
Like the FT (and more on them in just a moment), The Ken has concentrated on encouraging readers to form habits. For example, every story is published at exactly 8:00 am, and a personalized e-mail is sent out at 8:05.
“Our subscribers have written to us saying it’s like their morning cup of coffee. The reason print continues to survive and grow in India is habit,” Dharmakumar said.
The Ken’s enormous success was achieved organically, without spending on marketing. The website does not support advertising and uses e-mail as a source of subscriber acquisition and engagement.
The brand also does not offer trials, does not syndicate its stories, does not have a leaky paywall and has only increased its subscription cost. Potential subscribers do, however, have the opportunity to get a good idea of what they’ll get by subscribing through some 150 stories (as well as 250-word summaries of all Ken stories) that are available free to people who register on The Ken’s website.
Striking a revenue balance between ads, subscriptions
Ananda Vikatan, a Tamil language weekly and the second-largest regional weekly in circulation in India, has had its fair share of ups and downs. The 93-year-old brand started as a single magazine company and took the digital plunge in 1997.
To tackle the problem of NRI audiences receiving their magazines up to three weeks late and paying Rs 800 (approximately $11.50) more than an Indian reader, the company decided to put its content online, free for consumption.
Owing to advertising revenue being limited, this move proved harmful for the brand, revenue wise. In a desperate bid to save the magazine from getting pulled down, the company implemented a paywall in 2005.
“Most of what we have done in the digital space is to either stay alive or understand how things work,” –Srinivasan Balasubramanian, Managing Director of Vikatan Group
The brand only started its digital transformation in 2014, by hiring innovation consultants who helped the brand navigate the technicalities of a subscription-based revenue model. Even though the brand’s revenues peaked in 2016-17, they started plummeting soon after.
“Our NRI audiences who were a substantially number started dropping and Indian audiences started growing, but the varying subscription costs didn’t quite make up for the lost revenue,” said Balasubramanian.
The Vikatan Group realises that it is sitting on a treasure trove of indic content, with an archive that goes back nearly 100 years, which offers huge potential to bring in revenue.
The company missed zeroing in on its north star in 2016-17 when it recorded about 75 percent advanced renewals, which has now fallen to 45 percent and given way to single-issue purchases.
“Close to 100,000 users have only purchased single issues from us. Some of them have bought multiple single issues whole value amounts to more than the value of subscription,” said Balasubramanian.
Finding your north star
On 1 April, the Financial Times reached a major milestone: 1 million paying readers, a long-term goal that the publisher achieved a year ahead of schedule, thanks to a personalised engagement metric that correlates directly with user retention.
Among the most expensive daily newspapers in the world, the FT has a monthly subscription rate of $45 (INR 3,119).
The FT’s biggest market is in the UK, serving more than 25 million households. The brand became digital first in 2014 and now boasts of a 1.9 million daily readership. Of the 1 million paid-for customers, around 80 percent are digital-only.
The company’s model is like that of Netflix and Spotify, reliant on technology and subscriptions, rather than that of a traditional media house, that is reliant on advertising.
“We are now safe, even if print were to die tomorrow,” –Gadi Lahav, FT
A data-driven company, the FT has an analytics team of more than 20 people. It also has a growing data science team that came up with an RFV (recency, frequency, volume) model and a north star – a metric that consistently co relates with the brand’s goals.
Handling data translates into two major challenges – using metrics that are proxies and having more than one truth. “A company must have only one truth, which is the north star,” Lahav said.
The RFV model is based on recency (the last time a user visited the FT’s website), frequency (the number of times a user visits the site) and volume (the number of articles a user reads). With that in place, the FT was able to give the correlation between engagement, revenue, cancellation rate and conversion rate a hard look.
The ideal customer has a low recency and a high frequency score, whereas people who come to the site less often are the ones whose attention needs to be grabbed, so they can be turned into more frequent users.
In line with FT’s goal of amplifying itself as an independent source of truth and helping people make informed decisions, the brand has developed various products.
myFT functions as an intra-brand Twitter, where a user can choose to subscribe to various topics of interest, upon which they receive a daily e-mail digest. The brand registered an 86 percent increase in RFV in 2017, in addition to the 35 percent increase in 2016.
The company launched a faster website called fastFT in 2013. A minimum viable product (MVP), fastFT featured merely 10 articles on the homepage and instantly found increased user engagement.
“Even though the old website was only 3 seconds slower than the new one, it decreased the RFV across the board. One slow second translated into a 5 percent loss in engagement across the board,” — Gadi Lahav, Head of Product, FT
Now, the brand concentrates on myFT and its iOS application as drivers of engagement, without investing resources elsewhere.