The walls are crumbling fast. Last month, tech billionaire Marc Benioff and Lynn Benioff, his wife, purchased Time, the 95-year-old storied newsmagazine, for a pittance: $190 million (Rs 1,400 crore). Marc Benioff is a co-founder of salesforce.com, a cloud computing pioneer with a net worth of $6.5 billion (Rs 48,000 crore). The Benioffs are following in the footsteps of Amazon’s Jeff Bezos, who bought the 140-year-old Washington Post in 2013 for just $250 million (Rs 1,875 crore).
Almost two years later, Britain’s Financial Times, another venerable print title, was gobbled up by Japan’s Nikkei group. Fortune and Sports Illustrated are on the block as well. In the United States, print is dying slowly, asphyxiated by a combination of factors.
First, millennials read the news on smartphones, not newspapers. Second, advertisers are fleeing print. Classified ads used to be the mainstay of newspapers. Online sites like Craigslist put an end to that many years ago. Third, newspapers like The New York Times have slashed editorial staff. Those who remain operate out of a common digital newsroom. Fourth, speed. With social media reporting news virtually as soon as it happens, few have the patience to wait till the next morning for newspapers.
Dailies in the West are fighting back with their online sites, putting up news as soon as it breaks. Newspapers have tried to monetise their digital editions using paywalls, which has had mixed success, with The Times and The Sunday Times in Britain losing online traffic after they went behind a paywall.
In India, things are very different. Print is expanding, not contracting as in the West, on the back of rising literacy rates and purchasing power. Growth in regional print has been particularly strong. And internet penetration is still low. But the digital storm blowing in from the West will at some point make landfall in India. Are media firms prepared? The consolidation of content is happening, but in a uniquely Indian way.
Quietly, without the public noticing it much, Reliance Industries’ Mukesh Ambani has become one of India’s biggest media barons in five short years. He looks upon content as a commodity, not unlike oil, gas or chemicals. Its main function is to feed Reliance’s broadband service Jio.
For Ambani, voice is passé. Big data too is old hat: everyone’s doing it. But original, creative and engaging content is what will make eyeballs stick. That will decide the winners in India’s fiercely competitive mobile telecom market as news and entertainment migrate to smartphone screens.
Reliance now owns a slew of TV channels in news, business and entertainment (CNNNews18, Colors, CNBC-TV18, etc), as well as online sites such as Moneycontrol and Firstpost besides business magazines like ForbesIndia. The idea is to fill Jio’s expanding pipes with more and more content. A proto-Netflix could be spun off in the future.
Other print media houses are gung-ho on digital too. The owner of one of India’s largest newspaper organisations famously told his editorial employees, pointing to a computer screen showing the paper’s online edition, “You don’t know it yet, but that’s what will pay your salaries in future.”
Count the advertisements in India’s largest newspapers. Apart from front-page wrap-arounds in the festive season, ads are shrinking. Many are migrating to online platforms. The problem with online, however, is low ad rates. Response is click-based and, unlike in newspapers, ad rates can hit bargain-basement levels.
While news is going from paper to phone, entertainment has entered a radical new era. At the Emmy television awards in Los Angeles, Netflix picked up more awards than many traditional broadcasters. Netflix and legacy cable broadcaster HBO both won 23 Emmys. NBC, one of America’s oldest and biggest TV networks, followed with 16 Emmys, and Amazon Prime caught up with CNN, each winning eight Emmys. CBS and ABC won just three Emmys between them and the Disney Channel won one.
As with news, the migration of entertainment content from establishment media to digital media has been slower in India than in the West and Japan. Yet the success of Hotstar and other local digital platforms points to an inexorable drift online. The decision by La Liga, the popular Spanish premier football league in which Barcelona’s Lionel Messi is a big draw, to switch from live TV broadcasts in India to live Facebook webcasts is another straw in the wind.
The print-to-digital migration in India is slower than elsewhere because India remains an underserved digital country. Internet speeds are among the slowest in the world. Average mobile download speeds in Norway are 62 mbps compared to 9 mbps in India, according to a report by popular speed-test company Ookla. Even Myanmar has download speeds better than ours. Indian mobile companies are in deep debt. The rollout of 5G networks will be hobbled by high spectrum costs and poor broadband infrastructure. The Tokyo Olympics meanwhile will showcase a fully 5G-ready Japan in 2020.
The future lies in regional languages online. The local language social platform ShareChat recently raised as much as Rs 720 crore in a new funding round. In December 2017 ShareChat was valued at Rs 431 crore. This new round of funding, just nine months later, values it at over Rs 3,300 crore. ShareChat plans an IPO in the future when it expects to command a valuation in the region of Rs 14,000 crore. That is nearly ten times the value of Time magazine, founded in 1923 and now part of a cloud computing company.