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.

Nepali Online News Portals in Fledgling Stage

By Harsha Man Maharjan

Note: This is the draft of my article I sent to Republica on 2 October 2013 but remained unpublished till today. So I have decided to upload it on my blog.

Though online news portals are mushrooming in Nepal, their content and operation show they are in fledgling state and are fraught with problems. Yes, the demands of these portals are increasing day by day as these new media have advantages over traditional media-they are highly interactive or participatory and instant. Among all, online media made possible multimedia technology marrying text, audio and video. None the less many of Nepali online portals could not shoulder the burden of providing instant and interesting news. Either they lift news/features from online or other sources with or without proper courtesy or update other’s news which is a kind of tinkering.

It is difficult to present the exact picture of online news portal in Nepal as no authority has the information of the exact number of these portals. According to the statistics of Online Media Association there are over 100 such media. When the Press Council Nepal opened a call to submit online news portals for a listing by publishing a notice on Gorkhapatra, Nepali daily, about 56 such portals provided information till 22 September 2013. Many of them have not provided the exact location of their offices in their website. One reason for this might by they don’t have offices and even if they have it is only on the websites. According to information collected through website www.alexa.com, which does free website analysis, on 24 September 2013, top five news portals in Nepal are onlinekhabar.com, ekantipur.com, nagariknews.com, setopati.com and ujyaaloonline.com simultaneously. Only onlinekhabar.com filled the form for the listing. And the list contains news portals like dhadingnew.com (from Dhading about Dhading), janamanch.com (of Dhorpatan weekly from Dhaulagiri zone), Kchhakhabar.com (Itahari), newsatnepal.com (Nawalparasi) which are operating from out of Kathmandu. These portals are basically based on news agencies and other sources for national news.

Mainly Four problems are prevalent in overall Nepali online news portals besides the lack of proper regulation for online journalism in Nepal. Many of them are also related to the top five online news portals I just discussed above.

First, though the penetration of internet is increasing day by day due to the use of internet via mobile phones, still its reach needs to be increased. So, there is problem of Internet access. The Census report of 2011 has showed that 3.3 percent of total households of Nepal’s population has access to internet whereas the data from Nepal Telecommunication Authority this access has reached to about 19 percent. According to Dharma Raj Bhusal, editor in chief of onlinekhabar.com, the flow of visitors per day in his news portal is about 170 thousands usually and among them 55 percent are from Nepal and others; abroad. Similarly in case of Nargariknew.com, Krishna Dhungana informs that the flow is 160 thousands and among the ratio of visitors from Nepal and abroad is 60: 40. Both Bhusal and Dhungana believe that had there been improvement in the access, it would make online media market bigger.   

Second, except in the case of onlinekhabar, it seems that advertisers are less interested in online news portal. Even this news portal started to target Nepali advertisers forcefully after the google ad sense stopped its advertisement to this portal perhaps after complaints were lodged against the onlinekhabar.com before about eight months. During an interaction program organized by Martin Chauatari on Online news portal, Bhusal had informed that this cessation of the google ad sense made this news portal to think more about Nepali market. Within eight months this website has succeeded in getting the most advertisement among Nepali news portals. On its home page there are about 25 advertisements. Ekantipur only has about 10 advertisements on its home page whereas nagariknews has about 5 advertisements. After not displaying ads from the day it was started on 1 april 2013, Setopati.com has vouched to go for advertisement from 27 September2013 and earmarked 10 places for advertisement. But getting advertisement for online is not easy. Advertisers are less enthusiastic in using online media to promote their services and goods and it is weakness of the online portals and its managers of not being able to convince the power and reach of online to advertisers. Online media is the most transparent media-one can exactly find out the number and location of viewers and media owners could use this characteristic to persuade advertisers.

Third, as many online news portals are economically unsound, they lack trained and energetic human resources. So, they either post news using sources like the top five online news portals and portals started by big media houses, news agencies, press releases and news from radio networks. Main source of them is monitoring these sources-they would just tinker other’s news. Except for few online news portals being operated professionally and managed by committed media people, other news portals are shunning from arduous journalism and pandering news related to sex and crime available on internet. In popular portals started by committed team of journalists or media houses, the number of dedicated human resource is comparatively good. No doubt, among the top three news portals, ekantipur and nagariknews exceed in terms of the number of human resources, yet onlinekhabar is ruling Nepali market. There are 26 committed journalists for onlinekhabar in Kathmandu where as these numbers for ekantipur and nagariknews are 10 and 5. All together there are forty journalists working for onlinekhabar in Nepal whereas ekantipur.com and Nagariknews.com are using all journalists working for their print newspapers.

The fourth and the biggest problem is lack of planning and research. Due to the lack of planning and research, many portals are copying the layout and content. After onlinekhabar promoted contents related to sex to attract Nepali people working in gulf countries, many other portals copied it. Similarly after setopati came up with news layout similar to online huffingtonpost.com, not only portals with similar name like ratopati and khabarpati were established, their layouts were also similar. Many of news portals being operated by big media houses are running glamorously -media owners are seemed to be less interested in planning and research.  Their priority is on other media; they have started online portals because operating online has become a fashion. The media owners of these portals have to invest on planning and research. They must have better plan on how to make their news portals, different from other media they own.

Online media have better future in Nepal and many portals are on the gold rush. The environment is being favorable-the access to internet is increasing, users of android and smart phones are increasing and internet is being cheaper. Not all portals would succeed and only those who succeed in overcoming these four problems could secure the gold.

Cut-Paste Journalism (Hubahu Patrakarita) in Online Media in Nepal

During the recent program organized by the Press Coucil on 22 september 2013, Kishor Shrestha, from the Council  informed that there is not only investigative journalism, but also cut-paste journalism in Nepal. He was referring to hubahu journalism in print media, but this kind of journalism is popular in online news portals too.

The way online media are practicing this is different from what tv and radio are doing. Usually FM radio and television stations are reading selected portion of the news from newspapers. But some online news portals are lifting matters from websites from print media. For example in the issue of Nepal magazine on 22 September, Sitaram Baral has wrote a long cover story on the conflict inside the family of Gyanendra Shah. This reporting was uploaded on ekantipur next day and other news portals like http://muldharnews.com, http://topnepalnews.com, http://realkhabar.com, etc started to upload this article citing the source, Nepal magazine. None of them mentioned who penned that reporting.

I think there is urgent need of the guideline on using whole materials from other online media. 

link

http://www.ekantipur.com/nepal/article/?id=5935

http://topnepalnews.com/thought-interview/20932

NEWSWEEK BY THE NUMBERS

Source: http://www.journalism.org/commentary_backgrounder/newsweek_numbers

June 3, 2013

By Katerina Matsa
On Tuesday, May 28, Variety reported that IAC, Barry Diller's media and internet company, is considering selling Newsweek. It would be the magazine's second sale within a three-year period that included a merger with The Daily Beast and the decision to cease publishing a print edition. Editor-in-chief Tina Brown confirmed this in a memo on Wednesday, May 29. "Newsweek is a powerful brand," she wrote, "but its demands have taken attention away from The Daily Beast."
The news magazine genre in general has faced a difficult time transitioning to the digital space. But for Newsweek, the past few years have been especially tumultuous. Between 2007 and the end of 2009, when the magazine was still owned by the Washington Post Co., Newsweek reduced its total staff by 33%, according to Pew Research analysis of the magazines' staff boxes. Its revenues plummeted 38% in that three-year period, according to internal Newsweek documents. With these revenue declines, the magazine had an overall loss of $6 million in 2007 (before pension credits), which ballooned to $56 million in 2009. In August 2010, Newsweek was sold to audio industry businessman Sidney Harman for $1, plus the assumption of liabilities.
The losses continued after the sale. In 2010, Newsweek's internal documents projected a $22 million dollar overall loss for that year, less than half of what it had been the previous year. The next year, 2011, with the merger completed, IAC reported losses of nearly $14 million in its media group, which included Newsweek, The Daily Beast and several other websites.[1]
There were some signs of stabilization in 2012, the last year that Newsweek published a print edition. But that may be mostly an indication of the newsweekly reaching bottom. And the end of the print product in December 2012 will likely further reduce revenue, even if it helps usher the Newsweek brand into a mobile and digital future. Brown still says she expects Newsweek to break even by the fourth quarter of 2013, but executives have been saying that since at least early 2011.

Managing Decline: Deep Losses in Revenue and Audience

In the magazine industry, a publication's health is typically measured by two key indicators: circulation (the number of copies sold, either on newsstands or through print or digital replica subscriptions), and sales of advertising copy, known as ad pages. Pew Research analysis of these benchmarks paints a rather grim picture for news magazines in general, but especially for Newsweek.
Newsweek's overall circulation (single-copy sales and subscriptions together) plunged 50% over the span of 10 years, according to the Alliance for Audited Media: From 3.2 million in 1992 to 1.5 million in 2012. Time, by comparison, saw a 22% decline in that time period.

The more niche oriented news magazines fared far better in the last decade, though their overall print audience has been smaller than both Time and Newsweek. The Atlantic and The Week grew the most, with the Atlantic enjoying a 4.7% rise in total circulation to 485,300 copies sold and The Week growing 4.4% to 551,658 copies. (For more read the State of the News Media 2013: News Magazines' Overall Circulation)
Though single-copy sales make up only a small portion of news magazines' overall circulation (just 3%, in Newsweek's case),this indicator is considered a more objective measure than subscriptions of a publication's health. Here, Newsweek's biggest plunge occurred from 2008 to 2010, falling 55%. Its single-copy sales fell just 5% in 2012, while other news magazines saw their single-copy sales plummet, including 27% at Time, 17% at The Economist and 18% at The Week. Newsweek's smaller decline, though, is quickly put in perspective. The magazine sold 57% fewer copies in 2012 than in 2007. (For more read the State of the News Media 2013: News Magazines' Single-Copy Sales)

Subscription figures, which many magazines control with heavy discounting, show similar declines for Newsweek. (Subscriptions numbers began including both print-only subscribers and digital replica copies in 2012). Since 2007, the magazine has lost more than 50% of its subscribers-again a much more dramatic decline than among other news magazines. And the transition to digital-only has shrunk that subscriber number further. Newsweek's 1.5 million print subscribers at the end of 2012 fell to only 470,000 digital subscribers in the first quarter of 2013.[2]

The total web audience for these magazines extends well beyond subscribers to their print or digital titles. Time boasts by far the largest online readership, with an average of 7.7 million unique monthly users in 2012. But, this is one area where the influence of Newsweek's merge with The Daily Beast has likely helped the title: Its combined audience grew about 50% in 2012, according to Nielsen Netview data.

Revenue figures paint a dark picture for Newsweek. From 2002 to 2012, Newsweek's ad pages - on par with its tumbling circulation - declined 60%, according to Publishers Information Bureau. In its last year in print, 2012, Newsweek saw somewhat better figures. Its ad pages increased 5.5% - the first growth in six years - as advertisers seemed to acknowledge the magazine's redesign. This occurred as other news magazines suffered declines. Hardest hit was The Week, which suffered a 24.5% drop in ad pages. The Atlantic, The Economist and Time all fell about 12%, while The New Yorker managed to keep its ad page losses in single digits (6%). This slight boost for Newsweek, though, does little to make up for its decade of heavy loss. (For more read the State of the News Media: News Magazines' Ad Pages)    

And, while the digital space offers new opportunities for magazine-style reading, it is still far from balancing out the slide in print revenues. Most news magazines do not break out such revenues separately, but industry leaders say the trends mirror those of the broad industry. Investment firm Veronis Suhler Stevenson (VSS) estimates that revenue for news magazines on digital platforms will more than double by 2016, to $2.9 billion. But that money will still bring in a small share of total consumer magazine revenue: VSS projects it will tally just 14.5% of total revenue by 2016, compared to 6.6% in 2012. (For more read the State of the News Media 2013: News Magazines' Shift to Digital & Mobile)   

The explosion of tablet and smartphone ownership offers opportunities for news magazines to reengage readers in the digital space. Mobile news consumers, Pew Research surveys have shown, are reading more long-form news content, more stories in one sitting and reading stories they were not necessarily searching for - all very different habits than the quick, search and find tendencies of desktop news consumption.  But magazines still have a long way to go to capture a solid portion of that mobile news audience. Just 11% of smartphone owners read magazines on their phone weekly, as do 22% of tablet owners. And revenues, both in digital subscriptions and digital advertising are far from what the print realm was providing. (For more on this topic read the Future of Mobile News and The Tablet Revolution)


Source: http://www.journalism.org/commentary_backgrounder/newsweek_numbers

A Notice

From now on I will be posting interesting articles on media by others also in this blog.