The Covid-19 pandemic has resulted in a collapse in advertising revenue for newspapers globally. The crisis has brought this fact to the fore, and for newspaper companies to be sustainable in the long term, they need to develop a multi-channel revenue model, said Gary Liu of the South China Morning Post (SCMP) in his keynote to the Wan-Ifra Indian Media Leaders eSummit.
“Due to the disruptions caused by the pandemic, our advertising revenue collapsed, and so we realized that we have to depend on multiple revenue channels to sustain ourselves. We are doing it by becoming a platform company from a product company,” Liu said. He added that newspaper companies would need a mix of advertising, subscriptions, events and B2B to have a successful multi-channel revenue model.
Beset with multiple challenges over the past fifteen months, the SCMP’s print advertising and digital advertising fell sharply during November-December 2019 and March 2020. However, at the same time, average monthly digital users increased at a fast clip. In March 2020, SCMP has 51 million average users monthly with 2.7 million in Hong Kong, 18.7 million in the US, 14.1 million in the rest of Asia, and 15.7 million in the rest of the world. Its monthly video views in March 2020 were 250 million, while its print readership stood at 0.4 million.
The numbers in March 2020 are significantly higher than what they were in January 2017 when SCMP’s average monthly users were 4.3 million, with 1.3 million in Hong Kong, 0.8 million in the US, and 0.7 million in the rest of Asia 1.1 million in the rest of the world. Its monthly video views were 4.1 million in January 2017, with the print readership even then at 0.4 million. It shows that all the readers the newspaper has gained in a little over three years are in the digital space.
As SCMP’s chief executive officer, with effect from January 2017, Liu’s appointment is part of the transformation of the SCMP since Alibaba Group Holdings bought it in April 2016. The digital transformation aimed to make the 113-year-old newspaper the go-to source for political and business stories about Greater China from an Asian perspective.
Unique value needed to for multi-channel revenue
Although Liu argues that newspaper companies need to construct multi-channel revenue models to sustain, they need to offer unique value to develop that model. As per Liu, the SCMP’s exceptional value is in its deep understanding of China.
“China’s rise on the global stage will be one of the most important stories of the world. And we are best positioned to cover the country. The way we understand China is the unique value we provide. From Hong Kong, we are objectively able to cover China for the world,” he says.
Role of technology
In a world that is fast getting digitalized, technology plays a crucial role. However, Liu believes that technology should not be adopted just for the sake of it. “Technology is fundamental as it makes newsroom faster and more accurate and productive. Technology also allows us to package and distribute our content everywhere. Our content should be translatable across social media. If not, we are irrelevant,” he said.