Founding Editor, The Wire
News gathering is an expensive business, whatever the medium. Legacy print and TV businesses dominate news online by using traditional revenue streams to subsidise their websites, often at a heavy cost. With low ad rates online, can an independent news website ever survive?
Siddharth Varadarajan - former editor of The Hindu - and his co-founders Sidharth Bhatia and MK Venu are trying to get around the problem by ignoring ad revenue and betting instead on grants and donations to fund their website, The Wire, which they set up in May 2015. Two years later, The Wire has picked up both size and credibility. So, is this an alternative route for news journalism online? (Incidentally, The Wire is published by the Foundation for Independent Journalism, a not-for-profit company registered under Section 8 of the Company Act, 2013.)
Sreekant Khandekar, curator of Digipub World and a co-founder of afaqs!, spoke to Varadarajan recently to find out what exactly he has in mind.
Khandekar: In a start-up, the founders tend to have different skill sets. At The Wire, however, all three of you are journalists. Did you deliberately decide against a partner with a business background?
Varadarajan: With the benefit of hindsight, it would have helped if we'd had one. However, when we created The Wire the most important element was that we wanted to push the boundaries of good journalism, especially when existing media was confronting a crisis - not just a crisis with its business model but also a crisis of integrity.
It was far more important that we were three like-minded people who were coming together to send out a signal to the wider community of readers, writers that we intended to do something to create a new platform.
We had very little idea about the business side other than that we wanted to be a not-for-profit. One of the reasons media in India has gone off the rails somewhat is because investors are putting money in the business and then calling the shots - that, plus an overdependence on advertising.
Khandekar: In business journalism, the companies you write about are sometimes your advertisers. But is conflict rampant in general news? Have things really got as bad as you say?
Varadarajan: There is the example of the Tatas blacklisting The Economic Times. Then again, during Jayalalitha's regime the Tamil Nadu government denied advertising to The Hindu because she didn't like its coverage. State governments across India practice this kind of thing.
Now, this may not matter beyond a point to The Times of India, Hindustan Times or even The Hindu but if you are a small paper, a government's decision to withdraw advertising could be the kiss of death. The same is true with large advertisers.
Advertiser pressure is one part of the story but the rot runs deeper. Till the 1960s, the share of advertising in an Indian newspaper's total revenue rarely exceeded 50-60 per cent. Today, it is 90-95 per cent. This is completely unhealthy. You don't see these numbers anywhere in the West although newspapers there are in decline.
Khandekar: One could argue that dailies in the West have declined because they kept the cover price high. In any case, online advertising doesn't work in the same away as it does in print. For example, governments don't have any leverage. Then why are you opposed to advertising?
Varadarajan: That is why I am trying to shift this discussion away from advertising pressure alone. The problem online is not that you will get pressured because of government advertising. The issue is that online it will not reach the level where it will pay for news gathering expenses.
Khandekar: You are a 30-person team at The Wire. How do you fund yourself?
Varadarajan: We ran the first year, beginning May 2015, with the money we founders contributed. This was for technical expertise. We appealed to writers and photographers to contribute for free which they all did because they were happy to support this initiative. We didn't pay a penny to any of them in the first year.
Then we got a grant of Rs 50 lakh from Rohan Narayana Murty who wanted to support science journalism on The Wire. That was the first major donation outside of friends and family.
Later, we got Rs 3.95 crore for a year, beginning July 2016, for the English and Hindi websites. This was from The Independent and Public-Spirited Media Foundation, a Bangalore-based venture set up at the initiative of people like Azim Premji, Rohini Nilekani, Vikram Lal and Cyrus Gazdar. It is made up of 15-20 public spirited high networth individuals (HNIs) who saw value in funding independent media. We are one of the beneficiaries.
Khandekar: What are the terms? How do they measure your success?
Varadarajan: Informally, the understanding was that they would back us for three years. Unlike investors who would worry about revenue or returns, the Foundation wants to know that The Wire is being read. So we've worked out a matrix based on unique visitors, video views and so on. We have fulfilled those expectations and more.
The Foundation will back us for three years at a declining percentage of our total burn - from 70 per cent in the first year to 50 per cent in the third year. So, this year we will get about Rs 3.50 crore.
We have ambitious plans. We are appealing to readers more directly so that our business is sustainable on a regular basis.
Khandekar: How much do you need to raise in this way? And have you now got yourself a business partner?
Varadarajan: We have got ourselves a product manager which is the closest we will have to a business person! In addition to the Rs 3.5 crore from the Foundation, we want to raise Rs 3-4 crore ourselves. So our overall expenditure for the year will be about Rs 7-7.5 crore.
Khandekar: Do you visualise raising large sums of money - say Rs 1-10 lakh - from HNIs you may know or getting, say, Rs 1,200 per year from the common reader?
Varadarajan: We do want the support of HNIs but we think that if we want The Wire to live on forever, we must get small contributions from the wider universe of readers. We will unveil a membership scheme fairly soon.
Khandekar: Is there any particular news brand which gives you hope on the path you have chosen? Could it be The Guardian (of UK)?
Varadarajan: The Guardian is the closest because it is owned by a trust. The paper loses money and is subsidised by the Scott Trust whose corpus is diminishing as a result. So, they have used their website to ask their readers for donations and that has had some measure of success. We don't want to put our content behind a paywall.
Khandekar: What Rohan Narayana Murty has done by funding the science section on your website is interesting. Could the same idea be extended - so that somebody supports, say, the coverage of the arts or agriculture perhaps?
Varadarajan: We have had a conversation with someone who is concerned that there isn't enough rural reporting. This kind of support could work as long as it is not too narrowly defined and there is no conflict of interest.
Khandekar: Are you committed to never ever taking advertising?
Varadarajan: We don't have a theological objection to advertising. As long as we are not overly dependent on it, we are fine. But I am not at all bullish on online advertising being able to support news.
Khandekar: Since revenue is not your ambition, what is?
Varadarajan: The most important targets for me are unique visitors, time spent on page, bounce rate. These are conventional parameters but are indicators of influence, which is the important thing. I would be happy to run 10 pieces on instances of Japanese encephalitis in eastern Uttar Pradesh and Bihar as long as it impacts policy formulation or sensitises the public.
Khandekar: Online editors are driven to cover stuff that will get shared or is trending. The Wire may not be driven by revenue but you do want to reach more people. It's not so different. How has your editorial judgement been shaped by social media pressures?
Varadarajan: That's a great question because it's a dilemma we wrestle with every day. We want readership and it is tempting to chase a trend. Some stuff trends for good reason. For example, the story about Ajay Singh reportedly buying NDTV generated enormous curiosity. The fact that it is trending is an added impetus for us to write about it.
We try to keep off trending stories that are not part of our core area - say, a crime story or a controversy involving Kangana Ranaut and Hrithik Roshan.
If an important topic is trending we'd like to put out our take on that. The idea is to push the boundaries of what we consider to be good journalism rather than trying to convert that into revenue.