17 November 2013

Business Models of Nepali Online News Portals

     By Harsha Man Maharjan

Day by day the number of online news portals is increasing because it is easy to start. Having two three computers or laptops and two three journalists are enough to start up.  Any eligible person who dreams to have media can start it in a shoe string. Many online news portals are sprouting without proper planning on their economic sustainability. But Setopati, a digital patrika which was started on 1 April 2012 sought suggestions from its readers or visitors for its appropriate business model and came up with a mixed model of subscription and advertisement. This initiated a debate for and against Setopati’s plan. So, this is the right time to discuss about the appropriate business models for Nepali online news portals in light of models being practiced in the world.  

Media products are different from ordinary products as often they don’t get used up even if people consumed it. Media economic scholar Gillian Doyle uses words, ‘public goods’ for these products whose production cost of a unit is higher and this cost becomes minimal in the next unit. This is glaring in print media’s case. In broadcasting media, once a product is made, there are chances of distributing it time and again. So, digitization of media content has made distribution easy and fast making the distribution cost is almost zero and money used for distribution in print media can be used in the process of content production. Another media scholar Robert G. Picard says, “Digitization cuts costs by simplifying production. More content can be made and distributed by more enterprises and individuals than ever before. However, while the internet creates opportunities for online content, it yields only limited monetization for news and general information providers.” Due to this, unless the news portals operators do sound planning, making money out of news portals in Nepal and abroad is not easy.
Though advertisement, subscription are the business models most prevalent in the world, in Nepal only advertisement is in practice till now. When online news portals like Parewa.com came into existence as an amateur activity on 4 March 2006 through the initiatives of four active journalists, Krishna Dungana, Umesh Shrestha, Deepak Bhattarai and Rajan Shrestha, they had never imagined that local advertisers would be interested. In the beginning, google ad sense was only its economic source. Gradually Nepali advertisers like a money transfer company showed interest, and according to a research carried out by Shreeman Sharma in August 2007, this portal was earning Rs 30 thousand per month by the time it was closed in August /Septmber 2006.  This is also true in the case of Onlinekhabr.com, the most popular news portal in Nepal. According for editor in chief of this portal, Dhrma Raj Bhusal for one year, no Nepali advertisers desired to display advertisement in his portal in the beginning. As shown by Shreeman Sharma’s research, during August 2007, advertisements covered 40 percent of its monthly operational cost of 60 to 70 thousand. Now it has largest numbers of advertisement among all Nepali online news portals.

When Setopati sought suggestions, many of them went for advertisement with cautiousness. They made aware that Setopati had to refrain from being influenced by advertisers. For an example Santosh Pokharel who has completed Masters in Journalism and Mass Communication wrote this with a warning: “The continuation of healthy journalism rarely possible without advertisement, but advertisements should not influence news. In Nepal many news are manufactured according to advertisements of corporate houses. Please do take advertisement, but don’t take suggestions from corporate houses for news”. And corporate interest is increasing in online news portals. Dharma Raj Bhusa, the initiator of Onlinekhabar.com claims that his journalism is also business- the business with social responsibility. “To have or not to have influence of advertisers is in the online news portal manager’s hand. If the managers are strong, they can resist influences”, Bhusal says. But Onlinekhabar is also publishing advertisements as news. For example, on 4 October 2013, it has published a news with the headline, “Shopping Centres of Darbar Marga are Waiting for Customers”. This news is full of prices of different brands. This kind of presentation violates the ethics of journalism which urge journalists not to present advertisements as news. It is a kind of corporate influence.

When Setopati sought suggestions, no one went for the idea of subscription. When it decided also to start subscription in monthly basis, many inquired about the process of subscription and few even resisted. This kind of resistance is obvious as there is a mentality that “information is free” in internet. As shown by Fred Schiff the most of time when online news portals or internet newspapers go for subscription, visitors resisted. In the world many online news portals are retreating from charging visitors for its content but many others are opting for charging. So, both models are prevailing. For example, though in New York Time’s portal almost all news is free, yet, one reader can only read 10 articles a month. Economist.com contains both free contents and those requiring subscription. In the UK the Times, http://www.thetimes.co.uk, Times.co.uk let domestic readers to access its content freely, but requires subscription to it’s the content from abroad. In Malaysia, people have to subscribe to access  Malayasiakini.com, alternative online news portal. In case of Setopati, Ameet Dhakal believes that without readers contributing monetarily, online news portals or digital newspapers can not sustain. He even argue in absence of this revenue, Setopati or other news portal might need to kowtow advertisers’ pressure. But the problem with Setopati and other online portal is lack of new and exclusive or premium content.  While studying online news media in Greece and the UK, Alexander Arampatiz claims that some online media have put columns and “personality driven pieces” like opinion pieces for subscribers only. Could that be a model of Setopati or other online news portal for subscription? The chances seem slim.  

Till now advertisement seems to be the viable business model of online news portals but the portal operators must be able to check unwanted and undesired influence of advertisers. If any portals want to seek fees from readers they have to produce premium content targeting niche market. Making readers pay for the content of online news portals with the nature of content they are serving today is not easy. News and views are available through also FM radios, 24 hours television channels, etc. These online news portals should deliver contents different from other media.


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