News sector will have to rethink its business model

New Delhi: As news consumption moves to online video and text, and youth consume news on social and other platforms, news media will need to think about their content, monetisation and measurement strategies.

According to the latest FICC-EY report on the M&E sector, content will need to be created in multi-format and multimedia and separately for younger audiences and for different segments.

Key findings of the report for the TV and digital news ecosystem

Premium and mass audiences would require different products and pricing. 

Alternate revenue streams like IP, branded content, and exclusive products will be introduced.

News will also move to a “News+” content model, covering a wider variety of themes to reach wider audiences. 

The TRAI mandate that channels offered for free on FreeDish cannot be pay channels on Pay TV can create a significant disruption for news channels, which rely for around a quarter of their viewership on FreeDish. 

Hence, news channels will need to rework their distribution strategies in 2025 to manage viewership, stated the report.

News OTT will continue to struggle for scale

According to EY analysis, news OTT ad revenues will continue to struggle unless loyal, app-based audiences are built; EY expects to see a large industry-wide news app come into being to manage customer acquisition costs and increase customer lifetime value, but that will require making news content exclusive.

In case more aggressive bundling strategies are adopted, EY expects that by 2027, the number of subscriptions will increase to around 10 to 11 million. 

Given the increasing cost of content and customer acquisition, news media companies will focus on building their app-based audiences, which have a higher lifetime value. 

Platforms which have high web-based or transient traffic (such as online news) will provide more incentives for app downloads and/or partner and collaborate to create premium destinations with higher utility, aiming for audience stickiness and transactions.

News is moving from platform-based models to creator-based models; building multi-platform reach will define the next phase of growth, but talent costs could considerably increase.

News viewership grew 13% in 2024

On the back of the general elections, several important state elections, and many news events, the viewership of news increased by 11% to now comprise 7% of total TV viewership. 

Regional news dominated the genre, comprising 64% of total TV viewership, while Hindi news comprised 35% and English was just 1%.

Online news audience was 463 million in 2024

Online news reached 463 million of India’s 1.4 billion population in 2024, which is 32% of India’s population.

The reach has reduced compared to earlier years as younger audiences have started consuming news on alternate platforms, mainly social media and communication platforms, which has a direct impact on the reach of news and information platforms, highlighted the EY report.

The news was consumed most on mobile phones

Mobile was the preferred mode of consuming online news, comprising 90% of total digital reach.

On average, consumers used more than two platforms to consume online news, and 38% of them consumed news more than once a day.

49% of respondents surveyed by Reuters Institute relied on social media for their news; the survey indicated that 54% of Indian respondents consumed news from YouTube, 48% from WhatsApp and 35% from Facebook.

News subscription grew, but remained sub-scale

News subscription revenue remained minuscule at Rs 3.25 billion, primarily driven by premium and exclusive content and e-papers for consumers who had given up the physical product.

Apart from mainstream news brands, specialty publications for career growth, education/awareness, finance, etc., gained popularity; Network18’s MoneyControl advertised that it had crossed a million paying subscribers in 2024.

The proliferation of free news platforms, as well as the AI summaries of news articles on search platforms, are deterrents to the growth of news subscription revenues.

News publishers tried several innovations in 2024 to grow revenues, including:

• Limiting the number of free articles on aggregator platforms ƒ 
• Providing festival and other discounts ƒ 
• Bundling with other news products as well as other media platforms ƒ 
• Providing ad-free experiences ƒ 
• Keeping quality and exclusive content behind a paywall ƒ
• Selling subscriptions on various e-commerce platforms and creating a magazine store on the ONDC

Digital news will be a collaborative effort

News publishers will focus on creating a credible digital story. Some initiatives could include:

• Providing “certified inventory” to increase trust in advertisers and thereby increase ad yield
• Building 1P data through interactivity, partnerships and data sharing, to enable better targeting for advertisers
• Enabling cross-platform measurement, so that print + e-paper + mobile + CTV audiences can be packaged and sold together
• Leveraging digital audiences for content commerce and integrating sales teams for cross-platform advertising 
• Rolling out a One-India news app with participation from all leading news brands as a united platform with a massive consumer base, thereby saving on customer acquisition costs as well as generating usable consumption and audience data, particularly in a cookie-less world, where first-party data becomes critical for ad efficiency.

Digital revenue of print publishers grew 12%

The digital revenue of print publishers has been growing every year and is likely to see a steady growth of 10% to 15% in the next three years. 

While EY estimates indicate that digital comprises 6% of total revenues and 9% of ad revenues, industry discussions indicate that it is still well below 5% of most print companies’ total revenues. 

E-papers have grown significantly, and some industry experts estimate that their readership could be as high as 10% of physical readership. 

However, industry discussions indicate that the growing use of AI in search engines and the use of web crawlers have been detrimental to the digital revenues of many print companies. 

Several of them have (or are planning to) ban the use of web crawlers on their original content.