Mushrooming digital platforms and content are changing patterns of consumption, and the battle to keep up is heating up
“Where is the story in a samosa?” That question intrigues entrepreneur Samir Patil every time he looks at the popular snack. And, as an answer, he recounts an article written by Pakistani-American author Daniyal Mueenuddin in the New Yorker magazine in 2012. The story was steeped in personal history and was set in Pakistan with the samosa at its core, detailing how the crispy, stuffed savoury helped build bridges between communities.
The lilting, long-form article got Patil, a Massachusetts Institute of Technology alumna and former associate partner at McKinsey & Co (in New York), thinking about why media tends to shy away from such stories. “In many ways, the story of the samosa is the genesis of Scroll.in,” says the 45-year-old, who co-founded India’s leading digital news venture in early 2014, along with senior journalist Naresh Fernandes and Jennifer O’Brien, a former business development head at travel startup Trabblr.
In the same year, Patil partnered with American company Atlantic Media to launch Quartz India, a business and economic news website. Later, in 2015, Hindi media publishing company Satyagrah joined forces with Scroll to mark Patil’s foray into the regional language space.
Prior to Scroll, he had launched ACK Media (publisher of flagship comics brand Amar Chitra Katha)—which he and his partner sold to the Future Group in 2011. A veritable news junkie, he reads five newspapers a day and scans at least 20 articles online, apart from content from his own platforms.
Patil belongs to the growing breed of Indians who are fuelling the aspirations of the country’s content startups. This new generation of news ventures are riding the wave of expanding internet usage, rising mobile web consumption and cutting-edge technology to deliver content in a manner that is different from traditional media.
The digital form of delivery has been unanimously accepted as the future of media consumption by entrepreneurs and investors alike. “People are spending more time than ever on their mobile devices. There is a greenfield opportunity to create a $1 billion media conglomerate in India with the right team and right content,” says Vivek Raicha, executive director and investment head, Emerald Media, a pan-Asian platform established to advise private equity firm KKR and media holding firm The Chernin Group on investment opportunities in the media and entertainment industries across Asia.
While the digital content landscape is evolving at a galloping pace, various stakeholders—not just entrepreneurs, but journalists and technologists as well—are experimenting to fine tune a business model that will generate quality content and drive revenues too. “There are more new and interesting experiments in Indian journalism than in most other countries in the world,” say Arijit Sen, journalist-turned-human rights researcher with Amnesty International, and Rasmus Kleis Nielsen, director of research with the Reuters Institute for the Study of Journalism at the University of Oxford, in their May 2016 report on ‘Digital Journalism Start-Ups in India’. Sen and Nielsen spell out the truth for all content firms. “In terms of distribution, most of these startups recognise they are unlikely to be destination sites or apps for large numbers of users at this stage and have prioritised social media distribution to build reach and engagement,” they note in their report. “But they are poised to seize the opportunities represented by the rapid growth of internet use and digital advertising in India; they are often innovative and novel in terms of the journalism they do, how they distribute it, and how they try to fund it.”SOMETHING FOR EVERYBODY
In a sense, India is a unique market for digital natives. For one, not everything that has worked the world over is a success here. Buzzfeed India, the desi outpost of New York-headquartered internet media company Buzzfeed, is still finding its feet two years after launching country operations in June 2014. Says Rega Jha, the 24-year-old editor-in-chief of Buzzfeed India, “We are throwing things at the wall to see what works. The lessons learnt in the US can only take you so far. In the US, brevity is your best friend but in India people will [also] watch a long video.” The team now produces up to five videos a week from none a year ago.
It was baptism by fire for the then 22-year-old Jha, chosen to lead India operations just one year into the profession. Her initial struggle was less about how an American media company would fare in India or deciding on office space, rentals, hiring or building a team. “It was about getting a stable Wi-Fi connection,” says Jha, who recounts battling weak data connections at coffee shops or residences to send office emails.
It was also about realising the different modes of content consumption, of which the mobile handset was emerging as a very powerful platform for sharp, snappy content. It’s not surprising that young people have taken the entrepreneurial plunge in this segment. Take the case of startups like InShorts and DailyHunt, which bring news to your mobile.
__PAGEBREAK__The InShorts app was founded with a simple hypothesis: If one delivers news in 60 words or less on the handset, people will want to read it. It was this seemingly simple hypothesis that became the genesis of the venture which was started in early 2013 by 23-year-old Azhar Iqubal, together with his IIT Delhi classmate Anunay Pandey, and Deepit Purkayastha (from IIT Kharagpur) (incidentally, they were selected as part of Forbes India’s 30 Under 30 list for 2016).
InShorts was started as a Facebook page, called News In Shorts, and contained summaries of news articles with links to original write ups. The app has close to 4 million downloads. With a 4.6 rating on the Google Play Store, it is also one of the highest rated news apps around globally (only apps with more than 100,000 downloads are rated). Since its inception, the company has raised close to $24 million from Tiger Global and Rebright Partners among others. It is now moving towards collaborating with news publishers to create a larger quantity of short form content for its services. “We have moved completely towards a data-based approach to sponsored content,” says Iqubal.
This approach is diametrically different from that of Sakshi Juneja’s, for whom content is all about sharing personal stories on a topic that people mostly tend to shy away from—homosexuality. Juneja, (30), runs an independent site on the Indian gay community called Gaysi.
“Currently we barely earn Rs 10,000 a month from our blog and YouTube channel. Since we cater to a niche audience and the fact that homosexuality is still a taboo topic in the country, private advertisements are hard to come by,” says Juneja who started Gaysi as a blog in 2008 and turned it into a website in 2011. From a mere 50 hits a day in 2008, today it gets over 3,000 hits a day.
Ventures like hers only serve to underscore this point: The rise of digital media has granted unfettered access to content and democratised journalism. Take the case of ScoopWhoop, Buzzfeed’s premier rival in India, which was founded in 2013 by five fresh graduates from the Indian Institute of Mass Communication in New Delhi. Last year, it raised Rs 26 crore through funding from venture capital fund Kalaari Capital and is using the money to expand its video production unit—it produces about 150 videos a month.
This year, ScoopWhoop doubled its monthly page views from 35 million last year. With its sister concerns GazabPost and VagaBomb, the site attracts a combined 20 million unique visitors each month and clocked a revenue of Rs 12 crore in FY16 (from Rs 2 crore in 2014). “We have three to four tools that help identify things at cusp before they go viral,” says Sattvik Mishra (28), one of its founders. (Jha declined to disclose Buzzfeed’s India numbers; globally, Buzzfeed attracts 200 million unique visitors each month, of which 50 percent is international traffic, including from India.)
Entrepreneurs are constantly working to develop different models to disseminate content: There are newsgathering sites like Scroll and FactorDaily, aggregation-based platforms like InShorts and DailyHunt, video content providers like All India Bakchod and Click Digital Studios, podcasters like Indicast and Audiomatic and data creators like CapitalMind, among others.
The one factor that brings all these models together is technology—sometimes as a facilitator and sometimes as a subject. Take the case of months-old FactorDaily that marries both roles. In mid-May, journalists Pankaj Mishra and Jayadevan PK, and technopreneur Titash Neogi, started FactorDaily, a storytelling platform focussed on news, insights, videos and commentary on technology and how it is shaping India’s future. Both Mishra and Jayadevan are journalists with multiple years of experience in the technology and startup space.
FactorDaily has already raised $1 million from Accel Partners, Blume Ventures and Vijay Shekhar Sharma, the founder of Paytm. “We can’t be a digital content company without technology. We want to put technology in the pilot seat,” says Mishra. “It’s both disruptive and transformative.” FactorDaily recently launched India’s first messenger news bot as it believes the next generation of human computer interaction will happen purely through conversations.
Such new-fangled ideas are catching the investor’s eye and funds are being ploughed online. But there’s one element that threatens to spoil the party: Revenues. Says Buzzfeed India’s Jha, “We need to monetise our content; we are trying to figure out what should be monetised and what not.”
And it’s not just Jha. It’s a concern that’s giving digital forerunners the world over sleepless nights. SHOW ME THE MONEY
Monetisation is a critical issue across all genres of digital content. One of internet’s biggest advantages—abundant space—is eating into online ad revenues. Besides, consumers have a propensity to seek online content for free, further making a dent in monetising potential. In April, international news agency Reuters conducted a poll with 1,230 of its readers and found that 81 percent of respondents felt that a news brand was synonymous with trusted content. But, more importantly, two-thirds said they were not willing to pay for any online content, irrespective of the quality, the report noted.
One of the longest running podcast services in India, Indicast, has been fighting this battle ever since its inception in 2005. Although the company’s downloads have grown from 500 to 30,000 a month over a decade, the scale isn’t good enough. “You don’t have the millions of downloads for advertisers to say: I’ll put money on this,” says Abhishek Kumar who is a part of the two-man team behind Indicast. (Disclaimer: Forbes India’s podcasts are conducted by Indicast.)
__PAGEBREAK__There are three strategies to make best use of this digital economy, according to a white paper released by Scroll Media in 2015. The first is to radically reallocate ad spends toward digital media, especially in under-tapped social media and online video sectors. The second is to create digital-first campaigns that can use the intrinsic advantages of digital media, such as interactivity. And the third is to focus on ad formats designed to drive greater engagement in mobile platforms. Most digital content startups in the country are looking at the first strategy to create revenues, where monetisation is a big challenge.
India’s current digital advertising spend is estimated to be 12.7 percent of the total advertising spend in 2016, according to GroupM ‘This Year Next Year report’.
“I don’t buy the pessimism around revenue models,” says Patil of Scroll, adding that the digital ad market is opening up now, compared with seven or eight months ago. His platforms get nearly 4 million unique visits every month and the focus will be on monetisation in the next two years.
Perhaps he can take a few lessons from NextBigWhat, a B2B content platform that was launched in 2011 to bring feedback and advice to the startup community in India. NextBigWhat is one of the few content companies in India that is completely bootstrapped and profitable since 2014, and its revenue streams include community-focussed online ads and B2B conferences. “I clearly see that audiences are everywhere and awake all the time. Earlier it used to be 9 am to 6 pm but now even if we publish something at 11.30 pm, it gets traffic,” says Ashish Sinha, founder NextBigWhat.
The reader, you see, is always hungry. And that’s what the digital channels are banking on. MAINSTREAM MEDIA GO DIGITAL
Not just startups, but traditional media behemoths are also taking the digital route and analysing evolving patterns of consumption to zero in on what works.
In 2011, Network18, which has channels like CNN-News18 and CNBC TV18, launched Firstpost, an online news and views platform, which gained traction due to its edgy, opinion-based pieces on current affairs, policy, politics, economy, cinema and world business. (Disclaimer: Network18 is the publisher of Forbes India.)
Anant Goenka, the new media head of the Express Group, believes that “in digital content, the news which works is based on emotion. Huffington Post, Buzzfeed have it. Successful digital news talks more to your heart.”
Goenka has spearheaded the digital business of the group and propelled its revenues to Rs 28 crore in FY16, a spike of 133 percent from Rs 12 crore in FY15. He expects the topline to see a 50 to 70 percent jump in the current fiscal.
And he’s hopeful that the new digital startups would be able to rake in the money too. “In the last five to 10 years, having an [ideological or political] slant has also worked,” says Goenka.
The 29-year-old also emphasises on the importance of choosing a character for a digital platform. And this is where, he believes, traditional media platforms hold an edge over the startups that still dabble with content in a haphazard way.
For Indianexpress.com, he says, quality content, and not entertainment and promotions, is at the core of any adaptation. “We are still a content-first, and not technology-led, company. Scroll, ScoopWhoop and The Wire capture interesting stuff but when it comes to big news, people come to mainstream media,” says Goenka, adding that high quality content and analytics together should command a premium.
Goenka is not too concerned that startup content companies are hiring journalists and moving towards long-form, investigative journalism. “This is the easiest take-me-seriously tool there is. If you want long-term viability you have got to do more than entertain the audience.”
Agrees Shivendra Gupta, executive vice president at Business Standard Ltd: “News and information-related startups will face the pressure of moving from eyeballs and page views to revenues and then profitability; currently they survive on syndicated content. Soon, they will be under pressure to invest in newsrooms, which is when costs will start escalating.”
The business daily has introduced partial paywalls on its site and is hoping that it will help ramp up print subscriptions too, similar to some international publications.
Now, that’s another space many would be watching closely.
(With inputs from Angad Singh Thakur and Shruti Venkatesh in Mumbai and Gayathri Chandrasekhar in Bengaluru)