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| Vanita Kohli-Khandekar: The future of news |
| Vanita Kohli-Khandekar / New Delhi Aug 25, 2009, 00:50 IST |
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Indians are a news-crazy lot. By all reckoning we have the largest number of news channels and are the second-largest newspaper market in the world. If you add up the average across newspapers, news on TV and news online, in 2008, Indians spent an average of 50 minutes a day consuming news.
During the same period, advertisers spent Rs 12,000-odd crore to reach news audiences in those 50 minutes, according to data put together by Starcom MediaVest, a media buying agency. Add in subscription revenues and news is a roughly Rs 16,000 crore market. That makes it the second-largest media business in India after entertainment — in audience share, topline and (arguably) investor-interest too.
That said, which are the news media that are likely to survive in future? All the analysis and subsequent agonising so far has been about newspapers and how they will die. What about the other news platforms?
Last year, I carried out a simple analysis of which news media can survive the vicissitudes of doing business in India (see table).Radio and mobile came across as winners because of penetration, ease of use and their relative immunity to electricity problems. But since private radio stations cannot offer news, that pretty much rules them out — leaving us with the mobile phones as a source of news.
With over 427 million subscribers, India is one of the largest and fastest-growing mobile markets in the world. The nature of the mobile phone — small instrument, small screen — combined with bandwidth issues means that it will be a very long time before it becomes a serious entertainment medium. Yet it is perfect for news — a snack-in and snack-out genre in trade parlance.
Most importantly, news on the mobile is easy to monetise. Consumers are used to paying for calls, SMSes and other stuff. So there is none of the agonising that goes with figuring out how to monetise content on the PC.
This is the theory, but what is the reality?
Vital Analytics, a Bangalore-based research firm that specialises in the Indian mobile market crunched some numbers for me. According to it, of the 9.3 million urban Indians who accessed the internet via their mobile phones, 5.5 million or over 59 per cent did so to read news. This was in the quarter ending July 2009. In the two quarters before that, the figure had hovered around 55 per cent, on a growing base. In comparison, only 13 per cent of the 17.9 million active wireline internet users that IMRB surveyed in 2008, accessed it for news.
Remember, the Vital Analytics figures only track people who are accessing the internet via their mobile. There are a variety of news options on the mobile phone that do not need an internet connection — for instance, from airtime operators or companies such as Netcore. The latter’s MyToday, is a free service that users have to opt for. It offers news, stockmarket, cricket and health among several other content channels on mobile phones. The user gets headlines with an advertisement at the bottom of the screen. Since it was launched in 2006, MyToday has got about four million subscribers. News is the second-most popular service after cricket and was (when I last spoke to them) one of the highest revenue earners.
There are, however, snakes in this Garden of Eden. One, revenue share. In India, unlike most other markets, operators get a bulk (70-odd per cent) of the revenues from any value-added-service which goes through their pipelines. In Europe or rest of Asia, the content firms get the bulk of revenues. Two, convincing advertisers that mobile as a news medium works. MyToday is far from filling up its entire ad inventory.
So from a content company’s perspective, even if penetration is going up, monetising news is not as easy as it seems. With any luck these will turn out to be evolutionary issues that will get sorted out. If Indians remain as news crazy as they have always been, selling news on the mobile has to start making sense soon.
The writer is a media consultant vanitakohli@hotmail.com
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