Online news generates Rs 200 crore from subscriptions and Rs 1,900 crore from ads in 2023

Online news subscriptions generated Rs 200 crore from 1.7 million paid subscriptions in 2023, primarily driven by premium and exclusive content, as per the latest EY-FICCI report on M&E industry. The report further stated that the online news platform generated Rs 1,900 crore from ad revenue.

Newspaper digital products will increasingly go behind paywalls for exclusive content, custom knowledge, and passion content. Therefore, EY expects news and related products to generate subscription revenues of Rs 390 crore by 2026, which could increase to over Rs 700 crore through intelligent bundling.

In 2023, Comscore data indicates that online news had a reach of 456 million (over 80% consumed news on their mobile phones) as compared to 574 million smartphones in India.

According to the EY estimates, the reach of online news will grow to over 508 million by 2026.

The digital news platforms of newspaper companies generated less than Rs 1000 crore in ad revenue, as per the report.

“Content distribution of digital news from social media was affected by the shutdown of Insta articles feature by Meta, leading to a potential dip in approximately 50% online traffic to news publishers’ platforms. Frequent changes to algorithms used by large platforms resulted in news publishers generating lower ad CPMs, forcing them to rely more on direct deals,” it added.

However, both digital CPMs and views are on a downward trend, posing challenges in maintaining rates, stated the report.

Stating an interesting trend of online news consumption, the report mentioned that the consumption would not necessarily be on news apps or portals, but could shift to social media, D2C apps, aggregator apps or any place with a large online audience.

“Monetisation will remain a challenge, as programmatic rates will remain low, making a case for a focus,” mentioned EY in the report.

Many publishers struggled to generate digital subscription revenue, given the plethora of free and indistinguishable alternatives available.

Another finding from the report is that online news reached approximately 32% of India’s population, of which, 75% of news consumers were 18 years of age or above, while 50% were NCCS AB audiences.

News consumption was primarily mobile-driven

• The mobile was the preferred mode of consuming online news, comprising 86% of total reach.
• 80% consumption of news was on the web, while just 14% was on apps.
• On an average, consumers spent 137 minutes consuming news each month, with short video and short text being the most preferred formats for consumption.
• On an average, consumers used more than two platforms to consume online news, and 38% of them consumed news more than once a day.
• Times Internet’s digital platforms had the highest MAU among legacy news companies, while Dailyhunt had the highest MAU among news aggregators.
• Except for Times Group and DB Corp, most news publishers had an extremely low proportion of app based audiences.
• The most common source of news consumption is now social media. A survey of online news consumers indicated that 79% consumed news on or via social media. Consequently, most news publishers generate over 80% of their MAUs on their websites, which serve fleeting and transient traffic, in effect becoming an ad-rate arbitrage business with extremely high churn.

Hyperlocal news content services continued to grow

• 73% of online news consumers in Indian languages showed interest in hyperlocal news, with the highest from Hindi and Gujarati language users.
• Local apps like Way2News, Lokal, OneIndia, Public, etc., had built hyperlocal news products to differentiate from mainstream news publishers.
• Indian language consumers also relied on homegrown content creators and engaging in local chat groups to stay updated about locality and neighborhood news.

Fake news became a serious concern

61% of survey respondents believed they had been served fake or misleading news in the last month, and one in three was unable to identify the authenticity of such news.

The report stated that the advent of generative AI and deep fake technologies can only make this issue more prominent going forward, and there is a crucial need for self-regulation and boundaries to be created to prevent this malaise.

The Digital News Publishers Association, a body comprising online news brands of legacy TV and newspaper companies, has requested the regulator to assist its members in growing sustainably.

It has requested that the scope and definition of social media intermediaries be widened to include all platforms which use news generated by others. It believes there is a need for the inclusion of a bargaining mechanism, followed by arbitration and best efforts, to ensure buyers and sellers reach a negotiated value which is mutually determined. It has also recommended that to manage the menace of fake news, intermediaries must be made accountable for all content on their platforms along with publishers

Strategies that can help online news platforms grow subscription and ad revenue

• Focusing on building peripheral revenue areas like paid digital courses and events around areas of interest of the news audience.
• Building additional pricing layers for value-added interactive services and newer formats of news reporting with paid access like audio podcasts, AR/ VR news.
• Bundling of news subscription services with other non-news value-added services like OTT subscriptions.
• International expansion targeting diaspora with curated content.

News subscription will continue to search for scale

EY report stated that the news OTT will double between now and 2026, driven by exclusive content and premium CTV formats; yet it would remain a marginal revenue source for most legacy news companies.

“News platforms will need to aggregate sticky and loyal customers, and thereby build first party data, for which they will need to drive more user registration and build app audiences as compared to transient web audiences,” wrote EY.

“Consequently, we can expect to see a string of common interest communities come into existence, with increased content than just news, and transaction-led monetisation capabilities,” it added.

Custom recommendation-based connected TV products to serve top-end audiences will come into being, both ad supported and subscription-based, across areas of interest

EY report suggested that news publishers can launch an “India news” app, where content of all news publisher members will be available, and monetisation performed independently, to save on customer acquisition cost and create a credible alternative to internet news platforms and social media news.

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