Revenue diversification: a new recipe in the digital age for journalism economy

June 21, 2024 - 09:37
Press agencies are under significant pressure to revise their business models, with an adaptive approach to content creation and distribution to boost revenues in the context of digital economic development.
A news stand on the street in Hà Nội, a rare sight nowadays as the digital world is reshaping the journalism and communication landscape. — VNA/VNS Photo

HÀ NỘI — Diversifying revenue streams beyond traditional print and advertising is ever more critical in the context that the digital world is reshaping the journalism and communication landscape.

The traditional journalism economy models are facing significant challenges, from sharp declines in revenue, especially from advertising, while the revenue streams from new media forms have not been able to make up for the falls, Nguyễn Huy Dũng, Deputy Minister of Information and Communications, says.

Addressing the need for a vital healthy journalism economy, Dũng says that press agencies are under significant pressure to revise their business models, with an adaptive approach to content creation and distribution to boost revenues in the context of digital economic development.

Revenues of newspapers and magazines dropped by 9.4 per cent in the first nine months of 2023, compared to the same period in 2022, while radio and television stations saw a fall of 23 per cent. Most stations could not fully exploit the advertising time allowance per day on their channels as permitted by the Law on Advertising, ten per cent of all broadcasting hours and five per cent for paid channels.

The challenge comes from the heavy dependence on advertising revenue, he says.

Advertising revenue has historically been the primary source of revenue for publishers, he says, adding that for some, advertising accounts for 60-90 per cent of their total revenues. Meanwhile, the rapid expansions of digital platforms such as Facebook and Google have taken away around 70 per cent of the revenue of press agencies.

In addition, the annual regular expenditure and investment from the State budget on the press is modest, at below 0.5 per cent and 0.25 per cent, respectively.

Several e-electronic newspapers and magazines have started to collect fees from readers, such as VietnamPlus (since 2018), VietnamNet, Ngày Nay (since 2021) and Người Lao Động and Tuổi Trẻ (since 2022). The fee paying model is mainly just a pilot scheme for some categories with more investments in quality and content.

“Paywall and subscription are just at early stage in Việt Nam and have not brought significant revenues for the press agencies." Dũng remarks.

The strategy for digital transformation in journalism by 2025 has set a goal for optimising revenues. It is for around 30 per cent of the existing press agencies to increase revenues by at least 20 per cent – “a big challenge in the context of such economic difficulty,” he says.

According to Bùi Chí Trung, Deputy Director of the University of Social Sciences and Humanities’ School of Journalism and Communication, the development of journalism and communication economy should not be looked at from a few specific cases, or a single model, but requires a comprehensive evaluation of the press system in the context of rapid digital economic development.

Weather the storm

The decline of print media has hit media outlets worldwide.

Globally, the advertising revenue of print media has declined sharply from US$35.1 billion in 2019 to an estimated $21.4 billion in 2024, while digital publications posted a modest increase from $11.6 billion to $11.9 billion in the period.

The circulation revenue of the print media is forecast to fall below $40 billion this year from $53 billion in 2019. The revenue from paywall and subscription increased from $5.3 billion to $8.4 billion in the period, but still fails to make up for the decline of the print media.

Diversifying revenue streams from the digital transformation efforts becomes a vital trend for the journalism industry. “Technology will redefine the journalism and communication economy,” says Editor-in-Chief of online newspaper Vietnam Plus Trần Tiến Duẩn.

According to the World Press Trends 2023-24 from the World Association of News Publishers, publishers worldwide expect 20 per cent of their total revenues to come from new streams, besides advertising and reader subs.

New revenue streams include organising events, capital raising, cooperating with digital platforms, e-commerce, affiliate marketing or data business.

A survey by the Việt Nam Journalists Association shows that here, however, primary sources of publishing revenues remain advertising in printed media, the State budget funding and media contracts.

Duẩn says that revenue sources that world newspapers are promoting have not yet been implemented across newsrooms in Việt Nam, in particular revenues from paywalls and subscriptions remain modest.

He points out that new revenue streams are mostly effects of digital transformation, demonstrating that only a robust digital transformation strategy will allow media outlets worldwide to weather the storm successfully.

“Digital transformation has helped a number of press agencies to explore new lands, perhaps not as fertile as expected but undeniably potential,” Duẩn says.

According to Lê Quốc Minh, member of the Party Central Committee, Editor-in-Chief of Nhân dân (The People) newspaper and Chairman of Việt Nam Journalists Association, the media publishers must diversify revenue streams away from the dependence on advertising. He says that each publisher should apply at least three to four new revenue streams to grow sustainably, urging them to embark on a “dare-to-do” spirit.

Editor-in-Chief of Đầu Tư (Vietnam Investment Review) newspaper Lê Trọng Minh also shared the same viewpoint that press agencies need to find ways to diversify revenue streams in the face of rapid digital transformation. However, the code of journalism is the quality of the publications to the public, Minh stresses.

No longer free?

According to Quốc Minh, media publishers should eye revenue from readers as a safe revenue stream.

“We have made an irreversible mistake that is posting all of context online for free, which has formed the readers’ habit of accessing information for free.”

While media publishers can no longer rely on advertising, which is falling rapidly and chasing ads and traffic can easily produce “cheap” content, collecting paywall and subscription fees is vital in the digital transformation process of the journalism industry, Minh says.

But, he stresses, it must be alongside truly quality journalistic content.

More than a decade ago, when talking about paywall or subscription fees, there were objections. Meanwhile the global press made mistakes and corrections to achieve today’s success so today, major press agencies in the world charge fees for reading and there is no reason for Việt Nam’s journalism industry to wait any longer, he says.

Minh also points out other potential revenue streams for media publishers are providing communication services, producing programmes and contents, organising events and even providing information technology services.

He cites an example that Washington Post has developed their own technology products which support more than 400 websites, bringing in significant revenue. The New York Times T Brand products offer programmes and content for customers such as Cartier, Google and American Express.

According to Đỗ Anh Đức from the University of Social Sciences and Humanities, paid-to-read is a potential path, however, each press agency needs to develop a proper content strategy to attract readers and encourage them to spend on accessing content. Given the current situation of Việt Nam, a paywall is more appropriate, he says. — VNS