Chandalia was taking part in a discussion with Krishna Prasad, former editor at Outlook magazine, during WAN-IFRA’s recent Indian Media Leaders eSummit.
Likewise, substantial growth in digital media spend during the past decade underscores the need for news media organisations to ratchet up the digital portion of their revenues, Chandalia said.
Globally, for media organisations, a third of their revenue comes from advertising. In India, however, this has been about two-thirds.
During the pandemic, overall advertising budgets have dropped drastically. Despite some signs of economic revival, sectors such as tourism, hospitality and retail, all of which contribute significantly to print, continue to struggle. This calls for a rethink of news publishing business models.
A plan for digital growth
According to Chandalia, digital in India is expected to grow close to 3x in the next five years and COVID-19 is expediting this. Most news media players in India today operate in digital, however, the size of their digital business is fairly small.
“The one thing each player has to look at is ‘How do you drive the digital part of the revenue up across different formats?’” he said, offering a seven-point agenda for future operating models for news publishers.
- Put your audience first – Almost 75 per cent of a publisher’s revenue should come from subscribers and readers for a sustainable future. That means you have to put your reader at the centre of your business.
- Transform ad sales – Create an efficient ad sales organisation. Media sales organisations have worked in very different formats. Between 2005 and 2015 when advertising growth was just beginning, advertisers often came to publishers. Today, like the audience, the advertiser is also a stakeholder. Publishers, therefore, need to think of how to create products that drive more outcome-oriented pricing instead of mere display advertising.
- Investing in marketing technology – Many global players, in the move to performance-driven marketing, have invested in creating digital assets and capabilities. These are meant to help them leverage, not just the print reach but also the reach of the digital business to help boost performance-driven marketing and performance-driven advertising solutions.
- Build scale quickly through alliance – Google and Facebook are the two stalwarts in the digital marketing space and everyone else is a minor player compared to them. So how do you compete in this space? There have been a lot of talks about creating alliances and joint go-to-market platforms where publishers can come together, offer the inventory and get a fair price. In Europe, some publisher alliances have been able to create a reach that is equal to the big platforms within their markets.
- Cost optimisation – The cost optimisation cannot be just incremental, the entire cost structure needs to be rethought.
- Accelerate to consumer pay models – In India, most readers refrain from paying for content from Indian news media, but at the same time many consumers will pay for subscriptions to international publications, such as The New York Times. So publishers need to think about how to get readers to pay by providing them differentiated quality content.
- Leveraging analytics – Use insights and analytics to understand how to make news more relevant for readers and drive engagement.
Chandalia noted that globally, consumers have been demonstrating a greater willingness to pay for content.
“Whether it’s about news, OTT, Pay TV, consumers have shown an appetite to pay for content,” he said. “And wherever that has happened it has been through differentiated content which is driven and led by a point of view, and offering a unique perspective to the reader.”
He stressed that whether it is through digital or print, publishers need to make reader revenue the main share of their revenue mix.
“Companies who get to that point faster will be the ones who would be able to operate profitably and survive not just the pandemic, but the long run,” he added.