Readers or advertisers: Who should foot journalism's cost?

Readers or advertisers: Who should foot journalisms cost?

The audience has always been and shall remain forever the numero uno priority for Khaleej Times.



By Vicky Kapur (From the Executive Editor's desk)

Published: Sat 21 Sep 2019, 7:00 PM

Last updated: Sun 22 Sep 2019, 6:27 PM

Journalism is at a crossroads and all the three primary parties in the ecosystem - readers, publishers and advertisers - are well aware of this fact. For as long as we'd known it, the news model worked on the basis of a happy arrangement where the cost of journalism was being subsidised for the reader by the advertiser. That should come as no surprise given the average cost of producing a newspaper is far greater than the average price that a subscriber pays for it.
Such a relationship is unique because, in most other businesses, it's the end-consumer that directly compensates the producer for the goods and services s/he consumes. The tailor, hairdresser, restaurant, theatre, taxi service, etc., all bank on the payment they receive from final consumers. In the case of media, however, readers were/are paying only a fraction of the total production cost, with the rest being subsidised courtesy the commercial revenue that the newspaper receives in return for carrying the advertisers' messages to its readers. The underlying premise here is that enough of the brand's target audience among the publication's readers will follow the 'call to action' in the ad message for it to be a win-win for everyone.
And it was a win-win equation for a long time. The newspaper industry could focus on the reader's interest and raise issues on behalf of its audience thanks to stable ad revenues. Publishers continued to invest in quality journalism with an eye on the evolving needs and wants of their audience, indulging in and perfecting the art of informing them, educating them, entertaining them, and engaging with them. Readers enjoyed quality journalism at a fraction of its production cost while advertisers continued to find value in a well-informed, educated, entertained, and engaged audience.
Until, that is, the dynamic digital platform started offering an explosion of precisely targeted avenues and opportunities to advertisers for reaching their potential customers in a cheaper and/or more interactive ambience. If news was the only medium that the digital consumer was consuming online, then it would have been a simple matter of the same advertising moving from print publishing to digital publishing platforms. In such a scenario, all three stakeholders could afford to continue to feel important and supercilious.
But the online opportunity is much more extensive and expansive than news. From social media to gaming, chats and messaging platforms, maps and navigation tools, music and movies, a host of digital applications engage the audience on a real-time basis. An advertiser today has all of these new platforms available at their disposal to get their messages across. To compound matters and confound publishers, there's this triopoly of platforms hogging two-thirds of all digital advertising revenue. These giants - Google, Facebook and Amazon - are aggregators and have little or no reason to cater to individual content creators' audiences unless we're talking huge platforms a la a Walt Disney Studios or a News Corp.
While you, the audience, has always been and shall remain forever the numero uno priority for Khaleej Times, the good news is that reader satisfaction is set to be the driving force of the entire media landscape in the future. The likes of The New York Times, Financial Times and The Guardian have a successful reader-revenue model, but advertiser revenue remains the bread-and-butter of almost every local and regional publisher of note. In the face of dwindling print ad revenues and limited digital ad revenues, though, most publishers are now exploring the reader-revenue opportunity. For news publishers and media organisations in general, a pivot to reader revenue means that a focus on the reader is no longer a choice - it is an existential precondition even if that switch to reader revenue isn't immediate and remains to be realised at some time in the future.


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