Subscriber retention, building AI, ML capabilities key focus areas for 2024: Pradeep Gairola

While highlighting a stark reality, Pradeep Gairola, VP and Business Head - Digital at The Hindu Group, said that heavy reliance on ad revenue is no longer a sustainable model for news publishers. The industry is actively exploring new avenues for income, with subscriptions emerging as a promising focus that's capturing widespread attention.

However, Gairola believes that there is a need for more experimentation with alternative revenue streams as diversifying revenue sources becomes crucial with publishers navigating the complexities of balancing subscription-led and advertising-led business models in the ever-evolving digital landscape.

In an exclusive interaction with BestMediaInfo, Gairola shed light on The Hindu’s goals set for 2024, particularly in terms of digital presence, engagement and revenue growth. He said, “As we are currently setting our goals for the financial year 2024-2025, our organisational focus remains on digital transformation and strengthening capabilities for reader revenue. Specifically, subscriber retention will be a key area of emphasis in the coming year. Building upon the progress made in recent years, efforts to enhance audience engagement, user interface (UI), and user experience (UX) will continue.”

A significant portion of The Hindu’s investment will be directed towards augmenting its data capabilities, with a keen emphasis on leveraging artificial intelligence (AI) and machine learning (ML) technologies. The development of these capabilities is anticipated to contribute significantly to the publication’s organisational objectives, he said.

“Crucially, we aim to ensure substantial growth in our digital business, and we are committed to taking the necessary steps to facilitate and accelerate this growth. The strategic alignment with digital goals reflects our dedication to staying at the forefront of the evolving media landscape and delivering enhanced value to our readers,” Gairola added.

He also spoke about the role of e-papers in the Hindu’s digital subscription revenue and how significant its contribution is.

“E-papers play a crucial role, contributing approximately 50% to our digital subscription revenue at The Hindu. In the current era of information overload, where staying informed can be challenging, the E-paper offers a sense of completeness and fulfilment. It serves as a meticulously curated compilation of information by some of the country's finest minds, presenting content in a clear format that allows readers to anticipate the nature of different stories,” Gairola said.

Furthermore, he emphasised that a well-crafted newspaper provides a clear sense of what's essential to know for the day, offering an invaluable service. In areas where the physical copy of The Hindu is unavailable, readers often choose our E-paper subscription.

“While our E-papers initially mirrored the print products, recent months have witnessed a shift toward creating exclusive E-paper content. The absence of newsprint costs in the E-paper format allows us greater freedom to experiment. A notable success was the launch of 'Text and Context' in The Hindu's E-paper in November 2021. Its popularity prompted its incorporation into the physical newspaper, marking a rare instance where a digital product influenced the creation of a physical one,” Gairola said.

“In July 2023, we introduced an International Edition of The Hindu exclusively for E-paper consumers. Distinguished by its ad-free format, the International Edition, which consists of about 20 pages daily, focuses on Science, World, and Sports. It features a significant number of stories that require a full page of the newspaper to explain. On average, every month it showcases about 75 stories in a full-page format. The expansive full-page format empowers our editors to present well-researched stories on nuanced subjects, leveraging their expertise to interpret and explain to readers. In my opinion, this International Edition stands as the premier newspaper in the country,” he added.

On being asked, if are Indian publishers still figuring out how to strike a balance between subscription-led and advertising-led business models, Gairola said that the advertising-backed business model has been in existence for more than 25 years. Still, unfortunately, ad rates have not kept pace with the times.

“Having entered the digital news industry in 1997, I have yet to witness ad rates surpass the Rs 100/- CPM mark,” he added.

Gairola pointed out that for a brief period, digitally savvy organisations like HuffPost, Buzzfeed, Vice Media, Vox Media, and others led us to believe that building a sustainable business model solely based on advertising was possible. However, their success was short-lived. Consequently, it is now abundantly clear that publishers cannot rely solely on ad revenue for a sustainable business model. As a result, publishers are actively seeking new revenue sources, with subscriptions showing promise and garnering considerable attention.

“However, in my opinion, there is a need for more experimentation with alternative revenue streams such as digital events, affiliate revenue, e-commerce, and archives. Diversifying revenue sources becomes crucial as publishers navigate the complexities of balancing subscription-led and advertising-led business models in the ever-evolving digital landscape,” he added.

On being asked if there would be a standard model or it would be a customised model for different publishers, Gairola explained that the publishing industry is characterised by its dynamic and diverse nature, making it clear that there is no one-size-fits-all standard business model for news publishers. Rather, the prevailing trend is towards customised and adaptive models that consider a range of factors, including the type of content produced, target audience, geographical location, and technological advancements.

“Examining The Hindu Group itself provides a concrete example of this diversity. Within our portfolio, products like Frontline and e-papers have business models that are subscription-dominant, emphasising the importance of reader contributions. In contrast, for Sportstar, the subscription model takes a back seat in favour of advertising as the primary revenue source,” Gairola said.

“Our mainstream news site, www.thehindu.com, is likely to adopt a more balanced approach, with revenue being generated both from advertisements and subscriptions. Meanwhile, BusinessLine may have a larger share of revenue coming from subscription services and events, reflecting the unique positioning and focus of the business-oriented content it offers,”  he added.

He also highlighted that this diversity underscores the need for publishers to tailor their business models to fit the specific dynamics of their content and audience. It's a continual process of refinement and adaptation as publishers navigate an ever-evolving media landscape.

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