The first edition of 'What's NXT Digital: Where is the money?' held at the Taj Vivanta in New Delhi on April 3 saw a panel discussion on the type of content that will drive businesses, and how digital companies can target the right consumer to generate return on investments (ROI).
The speakers for the session were Sanjay Trehan, head, Microsoft India; Alok Mittal, managing director, Canaan Partners India; R Sukumar, editor, Mint; Mukul Singhal, vice-president, SAIF Partners; and Sreekant Khandekar, director, afaqs!. The session was moderated by Shailesh Vikram Singh, executive director, Seed Fund.
Mittal replied, "The nature of the publishing business has changed. It will be wrong to say that digital publishers are not making money. While the old set of publishers remains, the digital world is also witnessing the rise of a new kind of publishers." According to Mittal, going forward, publishing will be about user experience.
Agreeing with Mittal, Trehan explained, "It is a misconception that digital companies are not making money. In fact, one-third of the overall revenue of the Financial Times comes from digital. Another good example is The Wall Street Journal, which has created a very successful subscription-based model when it comes to generation of revenues. Content should have quality, it should be differentiated and should have value-adds in case of digital in order for it to work."
Sukumar of Mint, however, had a different view. He said, "Digital companies misunderstand the meaning of content. Content can be anything, from news to entertainment and information. Companies need to work to build a brand that people believe in and will have to define what it stands for through the kind of content it delivers, year after year. Running behind eyeballs will not help in the long run. Also, anything that generates eyeballs is not content."
Next, Trehan of Microsoft India talked about the role of an aggregator. According to him, while the role of an aggregator is not passé, portals really need to move beyond this and take on the role of a curator by delivering content that will help in decision making of consumers. Also, there is a need to create new advertising models, he said.
Khandekar spoke on why there is a lack of urgency in India. "Unlike Western nations, newspapers are not yet slaughtered in India. In the West, the circulation numbers are decreasing every day, which has forced publishers to look at digital as another option to generate revenues," he said.
Khandekar gave the example of the websites, afaqs! and The Mobile Indian. He remarked, "Companies will have to recognise large communities and build relevant content. While afaqs!, which is a business-to-business (B2B) news website, gets 10-12 per cent of traffic from Facebook and has its own set of followers, The Mobile Indian (TMI), on the other hand, gets about 20,000 to 25,000 visitors every day through organic search, that is, Google. In case of TMI, which is a business-to-consumer (B2C) site, the role of a search engine is larger."
Singh then asked the panel if Google is the real deal-breaker for publishers.
Sukumar answered, "For any content-based site, it is worthless if 40-50 per cent of visitors through search do not interact with the content."
To this, Trehan added that smart companies will not worry about Google.
Sukumar stressed on the need for digital companies to find an audience which appeals to advertisers. In this case, sponsored sections will play a big role.
Trehan then talked about how brands have started advertising online, with almost 80 per cent adopting some form of online advertising now.
Singh next asked the panel about local content and how to manage it. In response, Singhal cited the example of news channel TV9, which gets 59 per cent of its revenue from the local market. "But, in case of digital, local is very challenging," he conceded.
Khandekar recalled that that during the launch of The Mobile Indian in Hindi, it was very difficult for the team to get any insight on the local market.
However, Trehan provided a different insight. "I would prefer going for local portals, rather hyper-local, as the job of the internet is to reach out to the common lowest denominator. A lot of work needs to be done when it comes to local portals, so that it can develop properly."
Towards the end, the panel reached the conclusion that this is an exciting time and digital will surely grow. To tap this growing opportunity, companies need to identify large communities with common interests.