The model and the code

Print edition : March 07, 2014

At the conference on 'Media, Public Interest and Issues of Regulation: Indo-U.K. Perspectives' held in Chennai in February, (from right) David Levy, Director, Reuters Institute for the Study of Journalism; N. Ram, former Editor-in-Chief and now Publisher, The Hindu Group of Publications; K.N. Shanth Kumar, Director, Deccan Herald Group, and Chairman, PTI; and James Lamont, Managing Editor, Financial Times, U.K.. Photo: R. RAVINDRAN

THE news continues to be grimly challenging for those in the business of purveying news. In its study, “News Media Outlook 2014”, with the chastening strapline, “Navigating the Minefield”, the International News Media Association (INMA) suggests that the industry, to survive, must heave itself out of the legacy of print and take to the new medium and idiom of proliferating digital platforms of news dissemination and reception. The study invokes the metaphor of a funnel through which all news brands will have to pass and emerge substantially altered as “print + Web + tablet + smartphone + many line extensions”.

This digital “disruption” of the traditional news media that the funnel transition implies is, according to the INMA report, uneven across the world. While North America and Europe are quickly crossing over to digital, and some of them have already adopted a “digital first” strategy, South Asia, Latin America, Africa and the Middle East (West Asia) continue to be largely print driven. In the context of South Asia, the study makes the drastic recommendation, soft-pedalling considerations of the bandwidth and speed available on the ground, and at what cost, that “maybe it’s more effective to give away tablets to households than to distribute millions of print newspapers daily”. It makes a curious reference to the prospect of “Tata-isation” of hand-held devices in India, going on to explain in brackets, rather mistakenly, that Tata who created the low-cost car is in the business of providing low-cost alternatives to high-end products.

Despite such aberrations, it is not as if the study urges an abrupt leap into the digital—when this will take place will depend on where each country is in terms of the digital tooling of its society. It recognises that in at least half the world, which includes South Asia, there continues to be considerable “headroom” for print, which must be exhausted before the total transition to reception on digital devices. Pakistan typifies a case in the region where newspapers like Jang or Dawn are strapped for newsprint and yet cannot think of going digital because “they would do so without an existing customer infrastructure behind them”. Singapore, on the other hand, represents a category which is already in the conversion funnel and a group like Singapore Press Holdings, which publishes The Straits Times, is “acutely aware that it is sitting on the tipping point between print and digital”, knows “that the shift doesn’t come gradually, but in one sudden lunge”, and “is preparing—from advertising to editorial—for the tsunami”.

The schema outlined by the study resembles a marathon relay race where the baton changes hands from printed newspaper to digital device at different points on different tracks depending on how print-fatigued and digital-media-ready each market is. The overarching symbol of this handover is the purchase of The Washington Post by the founder of Amazon.com, Jeff Bezos, from the Graham family last August. Explaining the decision to sell The Post, its CEO, Donald Graham, said the paper had been posting losses for many years, and although cost-cutting measures had been taken and the paper could have survived under the small public limited company run by the family, it could not really have succeeded. Bezos, on his part, pointed to the change that was inevitable in The Post whether or not there was a change in ownership, because the “Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs. There is no map and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment.”

The INMA study speaks in terms of a “longer landing field” to facilitate this changeover. It speaks to the need for experimentation and a scale of operation that calls for larger capital that can be infused into, and stay invested in, the effort and search for variable alternatives to the staple advertising revenue model. “The sale of The Washington Post,” it says, “put a familiar face on the slow-motion transition to multimedia.” The study, then, seems to allow for both the tsunami-like tipping point that Singapore Press Holdings anticipates and the longer haul that the Bezos investment in The Post represents as dual trajectories proceeding ahead together. While it is no longer a case of if but when the transition will take place, its timing, pace and cost will vary according to the specific condition of the market. Also, the binary model of advertising and subscription revenues will expand and diversify into such forms as content marketing, e-commerce, private equity plays, search advertising, sponsored content, online video and event management. Some of these look like they skirt dangerously close to the kind of “paid news” which had raised a stink in the Indian press, and it is likely to be more and more difficult to keep the line between monetising or selling news and “buying off” news from blurring.

The coming digital wave

The one big takeaway from a conference of senior editors and media professionals held in Chennai recently was that the dominant print-reliant section of the industry was bracing itself for the digital wave it was sure would engulf it, waiting for the new media revenue model to kick in before it let go of its newsprint editions and migrated firmly online. The few online portals already in business in India, on the other hand, were impatient for journalism on the Net coming into its own, both professionally and commercially. Prem Panicker of Yahoo India drew a distinction between journalism on the Net and Internet journalism. Journalism on the Net was a mindless extension of print, determined by the requirements of print, whereas Internet journalism would bring the multimedia potential of digital technology, and language to match, to bear on the stories; and this when for the new generation the opportunities for storytelling are the best ever. Sundeep Khanna of Livemint, too, was ebullient about the digitally native generation of youth whose interests are far more eclectic and, despite the trolling that dogs the unwary netizen, about the interactive comments that build on, and often surpass, the original story.

Sheela Bhatt of Rediff.com was a forceful conscientious objector to the malpractice, abuse and defamation rampant in what she chose to call the republic of the Internet, ostensibly implying that it was a wild domain that was a law unto itself. There was, first of all, the philosophical issue of why the ethics and norms of social discourse accepted offline should not be equally applicable online, and their violations as liable to attract censure or punishment. People got away with heaping allegations and abuse that traumatised sensitive minds, even leading an 18-year-old girl to commit suicide, because they operated incognito on the Net. There was, in her view, a case for de-anonymising the Net user. There was also, she felt, a social hierarchy in force on the Net. It is dominated by the equivalent of the ‘Brahmin-Bania’ upper echelons in society, who not only do nothing to make the Net meaningful to the lives of those who cannot be on it, but end up accentuating the digital divide.

Coming from one self-admittedly addicted to the Net for over 14 years, these views may seem strange. They may seem to fly in the face of what is often considered the liberative and alternative scope of the Net which, by not requiring one to identify oneself, is seen as enabling a public sphere of free and fearless expression. Yet they give pause to the notion of the Net being a democratic salve to the inequities of the real world. The virtues of the virtual world, it would seem, come at a social and moral price. A code of practice for the Net becomes important as much to protect this realm from ethical corrosion as from viruses (and, perhaps not entirely coincidentally, as Sheela Bhatt disclosed quoting the National Security Adviser Shivshankar Menon, India has the dubious distinction of being the biggest source of viruses on the Net, bigger than even China).

The FT experience

The search for a revenue model in online journalism does not, as of now, take us too far or too long because there are just so few who have cracked it. In his account of how Financial Times, United Kingdom, successfully reinvented itself as a “digital first” brand (a strategy its Editor, Lionel Barber, set for the paper), its Managing Editor, James Lamont, highlighted a series of departures from the print-centric workflow and cycle. There is automatically a shift to new and young journalists more at home online. It is more about short form, real-time journalism, away from GMT deadlines, geared to mobile devices. There is great reliance on Web analytics to monitor who is reading what and when and to concentrate resources to meet the readership peaks in the course of a day. Product innovation seeks to deliver the brand across multiple platforms. Tiered services cater to different socio-economic demographics, among them premier offers like the FT Executive Coach, a “bespoke service” for senior executives.

Simultaneously, the FT’s print circulation is “managed down” to 250,000 so that the paper is not caught in the double bind of rising circulation and falling advertisement revenues; and yet the overall readership is higher than ever before because of the rapidly growing digital offtake. Content revenue exceeds advertisement revenue in this revised business model and the paper’s margin of profit moves into double digit, at 10 per cent, this year. A striking aspect of this success story is the size of the mobile audience, which constitutes 60 per cent of the subscription consumption. Mobile advertising, too, keeps pace with year-on-year growth of 26 per cent.

But FT’s online makeover may not quite be trendsetting across the board because it is a niche upmarket brand and its formula may not be as easily replicable for the general interest vanilla journalism market. The limited experience thus far seems to suggest that an incremental paywall which protects any content that can attract and fetch a payment, the rest being available free, and which enables a revenue mix that increasingly moves away from advertising and into subscription or payment for content is the online way forward.

There is the further problem raised by N. Ram, former Editor-in-Chief and now Publisher of The Hindu Group of publications, of whether, or to what extent, Web analytics should dictate the nature, and positioning, of content on a news portal. For instance, as Ram pointed out, the editorial, which has a defining role in a newspaper, but which may be regularly followed by only a small minority of the readers, may tend to get sidelined in a purely Web-analytics-driven format. There is then the danger that the process could slip into a reflexive and reactive formula of just giving the readers what they want. This may have implications for the larger social function—even social engineering role, in the enlightened sense of the term—and agency of a newspaper, online as much as offline. Of course, this may not be a risk for a paper of the reputation of FT which, as Lamont stressed in his presentation, keeps its core values of “accuracy, truthfulness and honesty” in constant focus through its transition into its digital avatar. But the same cannot be assumed of others so caught up in the market paradigm of the news business that they turn a blind eye to the social purpose of journalism. Again, there is the sense of a need for a business model for news on the Net being tempered by a code of practice for the Net.

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