Digital journalism start-ups in India
Extracted from a report by the Reuters Institute For The Study Of Journalism.
Introduction
India today combines the fastest growth in the number of internet users in the world, a vibrant and diverse legacy news media sector in both print and broadcast, and widespread concerns that some news media are compromised by their pursuit of short-‐‑term profit, by weak professional ethics, outside pressures on journalists, and by conflicts of interest related to their owners’ other business and political activities. In this report, we review a range of digital journalism start-‐‑ups in India that all aim to build on the opportunity afforded by rapid growth in internet use while navigating between on the one hand legacy news media competitors and international technology companies who increasingly expand their online activities and on the other hand the economic, professional, political, and proprietor-‐related pressures many journalists in India have to confront.1
The cases we look at in some detail – the Quint, Scroll, Inshorts, DailyHunt, The Wire, and Khabar Lahairya – all represent different approaches to digital journalism in India, in terms of their content strategies, their distribution strategies, and their strategies for funding journalism on a for-profit or non-profit basis. At this stage, none of them compare with the reach and editorial muscle of leading legacy news media like the Times of India, NDTV, or Dainik Bhaskar. In India, as elsewhere, established media dominate digital news provision and employ the vast majority of journalists.2
But all of the cases we discuss here represent important examples of how digital journalism might be done in new ways and by new players in India. By extension, they also shed light on how digital journalism might evolve in other growing low-income democracies with a rapidly developing digital media market, like Ban gladesh or even Indonesia.
In this opening section, we will briefly outline the rapidly growing digital media market these start-ups are navigating and summarise some key features of how digital journalism start-ups have developed in other countries that help us understand the situation in India. In the second section, we discuss two cases that are both for-profit content-based start-ups with a clear editorial focus, namely the Quint and Scroll. In the third section, we examine two cases that are for-‐‑profit aggregators with a greater emphasis on technology, namely Inshorts (formerly NewsInShort) and DailyHunt (formerly NewsHunt). In the fourth section, we look at two examples of non-profit content-based start-ups with very different editorial ambitions, namely The Wire and Khabar Lahairya.
The three sections and six case studies are selected to illustrate a range of different ways of thinking about the strategic choices digital journalism start-ups have to make around content (what kind of journalism are we doing and how?), distribution (what is our target audience and how will we reach it?), and funding (what are our sources of income and how will they fund our journalism?). We write on the basis of interviews done between October 2015 and February 2016 with 20 people involved in a wide range of start-ups, as well as background conversations with outside analysts and with legacy media players.
The start-ups we examine have very different origins. Some were launched by well-‐‑known journalists like Raghav Bahl and Ritu Kapur of the Quint or Siddharth Vardarajan and Sidharth Bhatia of The Wire. Inshorts and DailyHunt, in contrast, were launched by people with a technology background. Others, like Khabar Lahairya, are growing out of legacy media. At each of them, we have interviewed key individuals involved in launching and running each enterprise.
We have singled out these six start-ups for special attention because they together represent some of the variety in the Indian digital journalism start-up scene. (At the end of the report, we provide an overview of a range of other start-ups.) They also indicate where there is less variety, in that many of them are fully or mostly English-language oriented in a country where most of the population does not speak, let alone read, English. At this stage, Hindi and other local-language digital journalism start-ups are few and far between, especially when it comes to original, on-the-ground reporting.
This report investigates what digital journalism is and how it is developing in India. It is a portrait of a rapidly evolving situation that aims to help us learn from early experiences and understand where things are heading in the future. We examine individual start-ups not to predict their eventual success or failure, but as examples of how digital journalism is being pursued in a context that is very different from that of high-income democracies. We look at how technology, the media market, and audience demand is changing in India. But also at how Indian journalists are trying to seize the new opportunities. As Sidharth Bhatia, co-founder of The Wire, said in our interview with him: ‘Digital is not going to be the revolution. The revolution is going to be the people behind it.’3
We have talked to some of those who want to lead the digital revolution in Indian journalism. Our aim is to understand the journalism they do, how they use digital media to distribute it, how they plan to finance it, and where their ventures fit in to the wider and rapidly evolving Indian media market.
* * * * *
Digital journalism start-ups are not alone in pursuing this opportunity. Legacy news media titles like Times of India, NDTV, and Dainik Bhaskar are all investing in their digital operations and all have greater reach than most of the start-ups we examine here. The most important new international players are from the technology sector. With China largely closed off, most major Western internet players are looking to India for growth. Google, Facebook, Amazon, and other technology companies have all made major investments in India. International publishers like the New York Times, the Wall Street
Journal, the Huffington Post, and BuzzFeed have also tried to establish a presence in India. Faced with strong domestic brands, many international publishers have failed to build much of an audience in India (and several have scaled back their investment or pulled out). But some international technology companies are doing well. As is the case across the world, search engines – primarily Google – and social media – primarily Facebook – dominate digital advertising. In 2014, search and social media accounted for an estimated 48% of all digital advertising in India, leaving everybody else to compete for the remaining half.4
The Indian digital media market in which the journalism start-ups we examine here aim to establish themselves has a number of additional specific features that it is important to keep in mind. The first is the comparatively low average revenue per user in terms of digital advertising. With around 400 million people online in 2015 and estimated total digital advertising revenues of $975m, the total advertising revenues were only about $2.5 per internet user. The same figure for China is over $5 per user.
The second is that the reference price for news and media content in India is very low. Print newspapers are sold for INR 5–10 ($0.07-‐‑$0.15) or less, little more than their recycling value and heavily subsidised by advertising, and basic pay television packages cost as little as INR 100 a month ($1.5). This means that getting Indians to pay for digital news may be even harder than in high-income democracies where the reference price established by print newspapers and pay television is much higher, even in relative terms.
The third is that – like most of Europe but unlike for example the United States – India does not have much of a tradition of domestic philanthropic support for news and media. International donors have supported various news and media related initiatives in India, but individual donations are uncommon and larger foundations like the new ‘Independent and Public Spirited Media Trust’ (launched in October 2015) are rare.
Lessons Learned from Start-Ups Elsewhere
No other country in the world offers the huge opportunities afforded digital journalism start-ups in India, but it is still worth examining lessons learned from start-ups elsewhere. The first, sobering thing to note is that most digital journalism start-ups – like most start-ups – fail. A frequently repeated estimate is that 75% of all start-ups across all sectors fail, and only 5–0% meet their own stated goals in terms of growth.5 ‘Failure is the norm’ says Shikar Ghosh, from Harvard Business School (while underlining that entrepreneurs should still be valued for their initiative and experience even when some of their ventures do not succeed).6
Looking specifically at some of the most highly visible digital journalism start-ups launched in the United States, it is clear that, even when launched in a favourable environment characterised by rapid growth in both internet use and digital advertising, start-ups need both money and time before they break even, let alone begin to make a profit.
Take-off, to use the Silicon Valley jargon, often requires a long and potentially expensive runway. The Huffington Post was launched in 2005 and reported its first profit in 2010. After it was bought by AOL in 2011, millions more was invested in expanding the site’s global reach, and the site only reported a profit again in 2015. BuzzFeed, launched in 2006, reported its first annual profit in 2013.
Politico, launched in 2007, announced its first profit in 2011. All of these sites have pursued a path of ‘users first, profits later’ that requires significant investment and patience from their backers. All have first carved out a distinct niche in the United States and then turned to the pursuit of a global audience to reach the scale necessary to break even. All of them have been launched by people with strong networks in other media companies, leveraged for visibility and investment, confirming the wider point that innovators are rarely young, new entrants and more often are people who bring confidence, business knowledge, and social connections accumulated from prior experience at existing organisations to a new venture.7 Not all of them survived. Some otherwise very impressive start-ups, much lauded at the time, have not made it – like the mobile-first news service Circa and the technology news site GigaOm.
European markets, some of which have as high levels of internet use as the United States, but where country size and language barriers mean that the markets are smaller, where digital advertising has generally grown less rapidly, and where legacy media are often stronger, have been less fertile ground for digital journalism start-ups. One review of nine leading sites across France, Germany, and Italy from 2012 found only one breaking even and concluded that start-ups needed to have very lean operations, diverse business models, and carve out a clearly distinct niche in the market to survive.8 With limited opportunities for international expansion in other languages than English, the European digital journalism start-up scene has predominantly been made up of niche players who have targeted relatively small, very clearly defined, and often affluent specific audiences and produce editorial content that stands out from what other media provide.
Across the United States and Europe, even where digital journalism start-ups succeed in developing new and interesting forms of content, in finding an audience, and in establishing a sustainable business, news markets continue to be dominated by those legacy brands that have most successfully moved online, and digital markets more generally are dominated by platforms with far wider scale than any legacy or start-up news organisation. 9 Only in those contexts where legacy media are very weak, have decided not to invest in digital, or where people have lost confidence in them do we see digital brands dominate online news provision.10
In those markets where journalism start-ups have established themselves as central players in the digital media market, the constant evolution of the digital media environment – with the rise of social media, mobile media, and now increasingly online video – can be as challenging to navigate for digital-born start-ups as for older legacy media. First generation start-ups like Salon and Slate in the United States, or historically important portals like AOL and Yahoo, have not been able to capitalise on their first-mover advantage.
(Similarly, the first wave of Indian digital news sites, like the website of the news magazine Tehelka and the newspapertoday.com site of the India Today Group, have not been able to maintain their first-mover advantage – though sites like Indiatimes.com and Rediff.com still have millions of users.) Established digital news organisations like the Huffington Post are finding that they, no less than older pre-digital legacy media organisations, have to ‘pivot’ and constantly adapt and update their editorial, distribution, and business strategies as the digital media environment continues to change.
We turn now to a series of case studies of how six different interesting Indian digital journalism start-ups are making their own decisions about what kind of journalism they want to do, how they distribute it, and how they will fund it. These case studies are based on interviews with people at each start- up supported by other data. We start with two examples of for-profit content- based start-ups (the Quint and Scroll), then turn to two for-profit aggregation- based start-ups (Inshorts and DailyHunt), and then to two non-profit start-ups (The Wire and Khabar Lahairya). At the end of the report, we have compiled a longer list of other interesting digital journalism start-ups in India for reference.
The full report is here.
1 For recent research on developments in Indian media and journalism, see e.g. Parthasarathi and Srinivas (2012), Kohli (2013), Mehta (2015), and Ramaprasad et al. (2015). For a recent journalistic treatment, see e.g. http://www.caravanmagazine.in/vantage/the-big-five-the-media-companies-thatthe-modi-government-must-scrutinise-to-fulfill-its-promise-of-ending-crony-capitalism. The most recent review of press freedom by Reporters without Borders highlight increasing pressures on journalists from religious groups, political actors, and commercial interests: http://rsf.org/en/india. Painter (2013) presents a range of journalists’ perspectives on contemporary Indian journalism.
2 See e.g. http://www.caravanmagazine.in/perspectives/minority-report and Newman et al. (2015).
3 Sidharth Bhatia, co-founding editor, The Wire, interviewed by Arijit Sen.
4 FICCI-‐‑KPMG (2015).
6 http://hbswk.hbs.edu/item/why-companies-failand-how-their-founders-can-bounce-back .
7 Audia and Rider (2005).
8 Bruno and Nielsen (2012).
9 Meeker (2015).
10 Newman et al. (2015).