SCMP’s Gary Liu delivers keynote at Indian Media Leaders eSummit

Newspapers need a multi-channel revenue model

Gary Liu of the South China Morning Post Photo: SCMP
Gary Liu of the South China Morning Post Photo: SCMP

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.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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