Doing extensive training and consulting with media companies across south and southeast Asia, I often started my work saying that I was like a character from the Terminator films, here to help them avoid the media apocalypse. Over the second half of my career focused on digital transformation with major media companies including the BBC, the Guardian, and US newspaper chain Gannett, I have had to adjust constantly to disruption and rolling cuts.
When I started doing extensive work in Asia four years ago, many publishers dismissed those concerns. They spoke as if the pressure on print was a uniquely Western problem, or possibly even a uniquely US problem. Their economies were booming, and in India, publishers have been enjoying a dramatic expansion in vernacular language newspaper sales due to a rise in literacy rates and the view that newspapers are an aspirational purchase.
However, beginning two years ago, the mood started to change in the region. I started to hear from publishers, editors and their staffs that the pressures felt in the West were coming to south and southeast Asia, especially amongst English-language media in the region.
And the challenges were laid bare by the recent WAN-IFRA World Press Trends report. The report showed that revenue was down 1.8 percent “in large part due to the continued decline in print revenues, which still make up about 90% of publishers’ revenues”.
Does the Duopoly Own Asia’s Future?
The WAN-IFRA Press Trends report found that despite the decline in print advertising, digital advertising spend is growing, but the picture is complex in south and southeast Asia. Digital development varies widely across the region. You have everything from advanced digital markets such as Singapore to several rapidly emerging digital markets including Pakistan, Myanmar and Bangladesh. In January, Zenith Media counted Myanmar and Bangladesh as two of its top 30 fastest growing advertising markets.
Despite those differences, many publishers in the region are facing the same challenges. While digital advertising spend and digital audiences are growing quickly, monetising those audiences is proving challenging, especially at a level that will offset declines in print revenue, the same issue that many publishers have faced in the West.
More than that, I started to ask myself: What would happen to publishers in Asia if they saw a decline in their print business but struggled to grow digital revenue due to the fact that internet giants Google and Facebook or Chinese internet giants already had an entrenched position? In the West, we at least had a period of time before Google and Facebook when we could have built successful digital businesses. In Asia, just as many publishers were taking digital seriously, they often found that Google and Facebook already had a strong, seemingly unassailable position.
Across the region, Facebook partnered with mobile phone carriers to bring discounted rates for using the social media platform. In Bangladesh, mobile phone users can buy low-priced Facebook data bundles. In the Philippines, Facebook messenger is integrated with local mobile payments systems. I heard time and again across the region that for many users, Facebook is the internet. And in most countries, while Facebook, Instagram and WhatsApp are dominant social networks, Google, especially via YouTube, holds an as dominant, if not more dominant position than Zuckerberg’s suite of social properties.
Let’s get into specifics by looking at India. Digital ad spend accounted for only 15 percent of the Indian advertising market in 2017 but is growing quickly. However, just as in the West, it was estimated that 80 to 85 percent of digital ad spending go to Google and Facebook, according to media, digital and creative communications services company Dentsu Aegis.
Good luck getting solid figures on digital advertising in Bangladesh. But last year, I was told by a local digital editorial leader that Google and Facebook captured 70 percent of digital ad spend, and the major Bangla language captured half of the remaining 30 percent, leaving other publishers and market players to fight for the remaining 15 percent.
All this is creating Clay Christensen’s innovator’s dilemma played out at high speed. I watched as publishers were reluctant to invest in their digital futures because print remained the major source of their revenue, as WAN-IFRA’s report found. But as pressures are growing on many print businesses across the region, the digital market is competitive and full of challenges.
Scepticism Challenged by Results
But if media companies hope to maintain strong products and resilient businesses as audiences shift to mobile-focused digital media, they have to innovate, and if there is one thing I’ve learned in my career it is just as important for Asian media businesses to innovate commercially as it is for them to innovate editorially.
Fortunately, there are examples in the region, many that mirror or in some cases pre-date the development of these market innovations in the West.
While it took the Financial Times and, especially the New York Times, to prove the potential of digital reader revenue in the West, reader revenue has been a key development at innovative startups and storied brands in Asia.
In Malaysia, independent digital news startup Malaysiakini showed the way forward with its paid content strategy in 2002. A strong editorial product coupled with a call for reader support has been key to its success. As Kini co-founder and CEO Premesh Chandran told me several years ago: “It is very important for a site to ask why does it exist, what is unique about its content. Who really wants its content? Who is going to be willing to pay for this content? If you don’t have a differentiator with your competitors, it is going to be really difficult (to charge for content).”
In India, Tamil media house Ananda Vikatan launched a website in 1997, but by 2005, they needed a new digital strategy as the costs for the site were outstripping revenue. The group asked readers if they would be willing to pay, and Srinivasan Balasubramanian, managing director and head of content, said that the answer was a resounding yes. Their subscriber numbers grew 30 percent compounded year-on-year, giving their digital efforts a sound foundation.
Vikatan is doubling down on its digital strategy. The group has committed itself to growing digital revenues by fivefold by 2020 to become a digitally-led company. I did revenue workshops with their editorial ad commercial teams last year. The teams were as data-driven and advanced as any you would find in London or New York, and focused on not just reader revenue, but sponsored and native content campaigns and other cutting edge revenue streams.
Or look to fast-growing digital startups like The Quint in India. It has grown aggressively in three years to have 75 m users and more than 150 m followers on social media, and it has fueled its growth not only with the proceeds of Raghav Bahl’s sale of Network18 but also innovative native advertising.
Yes, digital disruption has come to south and southeast Asia, driven by the same forces that drove it in the West, a rapid adoption of mobile and the dominance of Google and Facebook. But media business innovators who didn’t ignore the changes in digital have shown that they can succeed even in the age of the Digital Duopoly.