After spending close to 13 years in corporate jobs, mostly with companies in the telecom sector, Virendra Gupta saw a potential business opportunity in the Indian language mass media. In 2007, Gupta founded the mobile value-added services (VAS) company Verse Innovation and tied up with top telcos to send job classified alerts via text messages.
Five years into the business, Gupta and his team orchestrated a pivot from a classified ad company to a news aggregator after acquiring Newshunt (now Dailyhunt) in 2012 to provide regional language news and other content. The pivot had become inevitable, given that the VAS ecosystem, with companies like Verse Innovation providing content like ringtones, music and pictures to consumers and sharing revenue per download with telcos, had begun to collapse amid regulatory concerns over the spread of spam and as mobile Internet started to take off.
“When we were doing the earlier (mobile VAS) business, providing SMS alerts on information services like jobs, properties, matrimony, local language news on SMS, at that time, our main aim was to empower people with utilitarian information. There was no data on phones; it was just SMS and USSD (unstructured supplementary service data)," Gupta, 45, recalled in an interview.
Moving to an app-based business from a VAS structure wasn’t easy. Gupta says it was akin to shifting to a business-to-consumer (B2C) firm after starting as a business-to-business (B2B) company that worked with telcos to distribute content to telecom customers.
In 2012, Verse Innovation acquired mobile news aggregator Newshunt, a small start-up that had a Symbian app mainly for Nokia phone users; Android was just getting there. The company then made the transformation to a local language news aggregator.
“So, we aggregated content and we took user inputs via SMS and USSD for differentiating various content," Gupta said.
“As the country moved away from operator context services, and as WiFi and data became popular, we were working with Newshunt at that point of time, in the local language content. We were seeing that this wave was inevitable. The industry was starting to move towards data, wherein instead of a walled garden, you will have open ecosystems, where B2C business was promising. At that time, we started working with Newshunt, which was an application which aggregated news content in local language," Gupta said.
Indian language content had started going mainstream way back in 2008. That year, Rediff.com, one of India’s early search and email service providers, started offering its email and other Internet services in 22 Indian languages.
The very next year, in 2009, Internet giants Google and Facebook made their entry into the Indian languages space. Google launched a transliteration application on the web in May 2009 which let users type in Hindi using an English keyboard, and Facebook unveiled an option to surf its service in six Indian languages, namely Hindi, Kannada, Malayalam, Tamil and Telugu.
In an effort to ramp up its executive management team, Dailyhunt recently appointed Umang Bedi, former managing director (MD) of Facebook India as its president. Bedi had quit Facebook India as MD in October 2017.
Newshunt had already started expanding into Indian languages before Verse Innovation acquired it in 2012. A year before the acquisition, Newshunt launched an Android app in 2011, moving on from the early Symbian platform. The app was originally developed by ex-Nokia employees Umesh Kulkarni and Chandrashekhar Sohoni in 2009. After the acquisition by Verse Innovation, Kulkarni stayed back as chief technology officer. With a new management team, Newshunt ventured into the e-books’ space on the Android app in four different Indian languages—Hindi, Malayalam, Tamil and Marathi besides English.
In 2015, Newshunt was rebranded as Dailyhunt in an exercise that required a major overhaul on both the design and the product front. The new app had a personalized feed, favourite tags, a fresh user interface (UI) and support for more Indian languages, namely Assamese, Sindhi, Nepali and Bhojpuri. “We (Dailyhunt) are an Indic language-focused company. We don’t even think otherwise. We have just started adopting English language content a little bit now. Around 95% of consumption on our platform is non-English content. We only understood and focused on that market (Indian), and we believe that it’s a very large market, " Gupta said.
“The next 200-300 million users who are going to come to the Internet are going to come only on local languages. And since we are a content company, I don’t think a mere translation of a transaction page into Hindi actually helps. In our case, we are a content consumption platform, and the way text is sourced and viewed in local text, related very well to the user," he added.
Dailyhunt didn’t expand by just adding new languages and sourcing more publishers. Like any other online content aggregator, it had to find ways to render Indian language text on mobile screens and understand what its users preferred to read the most using analytics. So Verse Innovation acquired BuyT, a discovery and recommendation tool in 2015, to build a recommendation engine for Dailyhunt users. Not just that, the company used resources from the acquisition to build a native mobile advertising and monetization platform. Before rebranding as Dailyhunt in 2015, it made most of its revenue from content sales in the form of e-books and other small content pieces.
In 2015, Verse Innovation also acqui-hired Vauntz, a design and analytics start-up, to help scale up Dailyhunt’s machine-learning capabilities. Note that both Vauntz and BuyT were acquired before the rebranding from the earlier Newshunt brand name.
Vauntz was, perhaps, the company’s most important investment, since Dailyhunt needed a core analytics engine that understood what consumers are reading in real-time. This allows Dailyhunt to create a personalized news feed for users, based on their past interests. Without showing relevant content to users, it would be difficult for an Internet company to retain customers.
“In B2C, as you know, you are directly impacted by the customer. Customer gives you direct feedback. You have a lot more analytics, a lot more information, lot more ability to impact the product design using analytics. You can make changes to your product without going through a guideline given by someone else, instead you can simply rely on user feedback to make changes to your app," Gupta said.
“I think there was a drastic shift in the mindset of the company (after moving from VAS market to mobile apps). But so far, the core fundamentals of the company was about building a product for a mass market. The understanding of the business changed in terms of the KPIs (key performance indicators) we use, as well as how we saw user engagement. And to build an analytics-focused Internet service, you also need to add more people skills, and more people in your company who are more design-led with more knowledge in analytics," he added.
Challenges in content space
Over the years, Dailyhunt has faced a lot of hurdles in the content segment. The whole landscape of the content industry evolved fast due to growing penetration of Internet in the country, with even news consumption itself starting to move online. From simple challenges like rendering Indic text, from when Dailyhunt started off as Symbian app, the problems have changed over a short period of time, according to Gupta.
Mobile apps require a lot of bandwidth to load content onto a device. Dailyhunt was content-intensive, and its second biggest hurdle was slow and patchy Internet connections. So, the company had to make a lightweight app that didn’t require a lot of data. Moreover, when Dailyhunt started off in early 2012, users had smaller mobile phones with very limited memory and this limited how the app stored and retrieved data from the Internet. But as the smartphone industry started launching high-end phones at low prices, and as mobile data prices hit record lows, Dailyhunt saw its business booming.
Over the course of time, Dailyhunt started solving very different set of problems, as it started adding more publishers and new users. As of now, the app has over 50 million users on Android, Windows and iOS, with news articles being sourced from over 650 publishers mostly in 14 different Indic languages.
“Now as users started coming in loads, now the problem was to figure out how to give a personalized experience to every other user logged in to the platform, and every other person that logged in. It became a game of personalization and content curation using machine learning. And if you try to do that with local language, the problem amplifies 10x, because you got to understand what the content taxonomy is, what the tags are. And you got to understand the preferences of the user base, based on their clicks," Gupta said.
“Because we don’t ask any login information, we don’t have any information about you because it has to be seamless for users. So based on the experience of the user, and based on his clicks, we are refining the content, we are able to identify well-written articles, trending articles, breaking news, and other articles that the user likes and use this to construct a feed for the user. And that has given, you know, a 40% improvement in our click-through rate (CTRs) in the last few months, and we are on that path where we are hoping to improve this further," he added.
What Dailyhunt meant for publishers
As consumption started shifting online, publishers were facing the heat to expand their distribution channel among online platforms, and the biggest channel turned out to be social media. The likes of Facebook and Twitter have become a major destination for both consumers and news publishers, but these platforms also tend to limit how publishers reach out to readers. Print news outlets, realizing the inevitable change, started investing more money into online. But at the same time, they had to spend more money for producing digital content, making it visible among social media users, and by hiring social media editors and teams.
Pew Research in 2016 studied how regular social media users consumed news online. It found that 66% Facebook users it studied got their news on the site itself, while 59% of Twitter users surveyed consumed news on Twitter itself. Additionally, Pew Research highlighted in its 2016 report that a majority (64%) of the social media users it surveyed, discovered news on Facebook only, while the rest consumed from other social media platforms.
But Dailyhunt is solving the problem of content distribution by just acting as a distribution medium, and are not directly impacting publishers, according to Gupta. News outlets are free to make contracts and end it on their own terms and conditions with Dailyhunt. Gupta said that several publishers have ended contracts with it in the past and have also come back after a while. “Social media is a black box for the media companies, and in our case, we do direct partnerships with the publishers, we generate traffic and we share revenue with publishers out of it. So the amount of analytical data and information that we pass on to the publishers is much higher than what social media conveys," he said.
“I think our proposition to publishers is very clear. One is, you got to be where the users are. Second thing is, digital is inevitable, now we work along with publishers to give them a lot (of) science about what content works and what doesn’t work, what are the stories and new segments that they can get into to produce new stories. And third thing is we give them distribution, and attribution on comScore for their reads, and we give them revenue. So, I think we have a full package around that," he added.
ComScore is a media measurement and analytics company providing marketing data and analytics to media and advertising agencies, and publishers.
New formats of content consumption
In recent months, India has seen a growth in the number of companies expanding into the content boom. Big names such as Amazon and Netflix are going head-to-head with video streaming; Indic-language-focused content start-ups like ShareChat, Clip and Pratilipi are attracting investor attention; and payment companies such as MobiKwik and Paytm are adopting local languages on their apps to add more users. This means that content consumption trends in the English language front will also affect the Indic language front. New formats like GIFs, audio, and interactive videos have surfaced and most mainstream media companies like Facebook, Twitter, Snapchat among others have already adopted these formats.
When asked whether Dailyhunt would consider expanding into newer content categories/formats, Gupta said, “In our view, we want to be a big destination for content consumption, from news, to non-news, lifestyle, women’s segment, among other multiple content categories. We are also expanding across multiple formats like videos, audios, text, GIFs. Definitely we are also looking for content sourced from both users and publishers to grow our base in the future. Shift into digital is inevitable, it is not that we are driving the shift, it is what consumers are driving. People want information in real time, nobody wants to wait till tomorrow. So, this is how the consumer is dictating the ecosystem."
“From a monetization perspective world over, ad dollars are shifting to digital and mobile and so and so... I think as it shifts, we are one of the few content players, who have proved to generate a sizable business on ad dollars on mobile. You will not find many people doing this, and that’s a lot of hard work taken by businesses into establishing this. When the funnel gates and toll gates of digital advertising increases, we will be well positioned to make use of that," Gupta added.