Home / Industry / Media /  A subscription dollar is better than an advertising dollar: Shailesh Prakash

NEW DELHI : When Amazon founder Jeff Bezos bought The Washington Post in 2013, it was a newspaper in decline, facing a severe cash crunch. Within three years of the acquisition, the newspaper has stopped haemorrhaging, saw its web traffic swell and advertising revenue grow. Among the people responsible for this transformation is Shailesh Prakash, chief information officer and executive vice-president of digital product development, who swears that the transition could not have been possible without top-notch technology and design. Prakash, who was in New Delhi to attend an event organized by the International News Media Association (INMA) last week, spoke about the challenges facing legacy media attempting to balance the print and digital worlds, the importance of going pay and the future of digital news. Edited excerpts from an interview:

In your presentation, you spoke about engineering versus journalism. Do you see a recalibration happening in digital publishing?

Look, I am the tech guy speaking here and I have a bias. In our (Washington Post) case, there is no less focus on journalism. Journalism has to be excellent, and needs to do what it takes. At Washington Post, we have grown our journalism significantly not just on the investigative, opinion or politics side, but also in new verticals. We have built travel, food and technology verticals. We have built a vertical for millennial women. So, there is a lot of emphasis on journalism, but also a huge focus on technology. The disruption and the demand is coming from the consumer. Everybody has a smartphone. Google is now a utility. You can search for anything, and they will give you highly relevant results in milliseconds. So, when you are used to that type of speed and relevance, you cannot go to a slow website of Hindustan Times or The Washington Post. You can’t say that you are a publisher, so you can be slow. That’s not going to work.

So, we have to have the speed of Google, the beauty of Apple, the convenience of Amazon. And that’s not journalism unfortunately. You can have the best journalists in the world, but if your site is slow, the app is terrible, consumer service is not good, you have nothing to offer on Alexa and your tweets look terrible, the consumer doesn’t care. In one click, he will go to

Do you think that the relationship between a consumer and Amazon can be replicated between a reader and a publisher?

Yes, you will see that happening. I am 100% convinced of that because those who do it will have an actual relationship with the subscriber, and those who do not will lose. I would caution those who are not going into subscription to start going into it as soon as possible. If I am a journalist, my relationship with the ad sales department is not synergistic. Typically, the sales side is selling to the corporate interests. And the journalist is talking not to the corporate entity but the reader. But if the journalist is being talked to about the consumer paying for his content, this is aligned with how he thinks. He wants to provide value to the reader and not the corporate sponsor.

Going pay is a journey. Retailers build long-term relationships so that you go to their stores again and again. Media companies are only now beginning to think like that and maintaining relationships. The Wall Street Journal, The New York Times and we are pretty good at it. It takes a long time to build staff who thinks about giving you the sense that you are a premium person I care about.

If you look at big tech companies like Apple, Facebook, Amazon and Google, you find that the consumers tend to choose the best and the second best is very far behind. I used to work for Bing, and we spent a lot of money building that search engine. In many ways, Bing is better than Google. But the consumer has chosen Google. Even Amazon dominates even though Walmart and Target have got decent e-commerce. That’s coming in media too. There won’t be 15 or 30 winners. There will be just a few very good places that users go to. The second or third one will be very far behind. That’s how we are thinking at the Post that how can we be the destination of choice because in media, consumers will behave just like they do for search and shopping. Our subscriber numbers are not public but we announced that we crossed a million two years ago. And the growth has been very strong since.

In moving to subscription and writing for the reader and not the advertiser, how do you manage the contradiction as subscription will not give as much as advertising?

I cannot talk about our numbers, but one of the reasons we have become profitable is subscriptions. So, the whole concept that advertising is a huge amount of money and subscription is a smaller part is not true for us. I can’t say, but I don’t think it is true for The New York Times either. The goal should be to get a large number of subscribers. What we find interesting is that if you become a subscriber, your consumption skyrockets. And that means more ad revenue because ad revenue is determined by the target group. So, if you become a subscriber, I am not only getting your money, you are consuming more; so I am also getting more ad revenue. We should also consider if a dollar earned in advertising is the same thing as the dollar earned in subscription. Financially, it is the same. But you as a subscriber are much more of a reliable and recurring source of revenue than the advertising campaign that ran. So, there is some premium to the dollar that you get from a subscriber.

What are the challenges of changing the newsroom to be digitally ready?

Please caveat I am the tech guy. The easy ones are the two: there often are these tools for which people say…this is so hard to do, why do I have to do the same thing five times, why is the video CMS so complicated…But I also think it’s a false narrative. The digital tools aren’t awesome, but they aren’t horrible. Just to get that out of the way, we have spent a lot of money building those tools, which is a system called Arc that we have built for ourselves, and are now offering other subscribers. The second challenge is under-resourcing. I’m not a journalist, but I hear this a lot—that I not only have to do my story but also ensure it has a video in it, photos are right, I have to tag it properly for the search thing, it has to go out on Twitter, now you have added the burden of Snapchat... And over many years of doing that, I think there comes a point where people just say, I’m going to focus on my story. I don’t know about the rest. And I think that is a very dangerous stance to take unfortunately. It’s okay to write your story, you better make sure your story is good, journalism is excellent, but unfortunately that is not enough. If you, the author of the story is not involved in how the story is presented on all these other platforms, I think there is a loss there. That’s why I think the best combination is where the journalist works closely with the digitally savvy designers, product managers and engineers. And that is the holy grail.

As advertisers get savvier, will ad dollar become more important than subscription dollar?

I doubt it. In order for advertising to truly work for us publishers, it has to be the case that advertising is very relevant. Go to The Washington Post or The New York Times, how relevant is that advertising? Maybe a little bit here and there but in many cases, it’s kind of irrelevant.

But in case of Amazon, you have extremely relevant advertising.

I agree. It is in platforms where the data exists but, by the way, the trend is against that with all the privacy stuff going on. But let’s talk through this—in a regular site, I go to CNN now and then, they keep telling me about a wedding ring sale. I have been married for 25 years, I don’t care that there is a wedding ring sale going on near my house. So, they’ve got my location right, but it’s irrelevant. And that has led to consumers doing the ad-blocker stuff. If the ads were very relevant, the ad-blockers would be irrelevant.

So, advertising has a very long way to go before it becomes relevant and personal. Look at Facebook. It knows everything about me. I don’t tell them but they can infer it. But look at the relevance of ads on Facebook. It is not bad, but not hugely better than on CNN or the Post and they know everything about me. So, I do think that advertising personalization is very hard to do. Simple things are easier but the Terminator-type of AI is far away.

While companies like Amazon have the data, they will be even more fearful to use it, let alone give it to somebody else because of reasons of privacy. Amazon will not give me the data. Can you imagine them selling me your shopping history, they will protect it even more. If you go to Google now and say I want to delete all my searches—that is very valuable for Google—but they will allow you to delete it. In fact, they have instructed their engineers where at any time the customer should be allowed to say, I want to be forgotten. If you look at the startups, the trend is all about paying the end user for the data.

Will news curation online become automated?

In the long-run, I don’t think the machine will be winning it, and I don’t think humans only will win it. There is only so much real estate you can get on mobile or desktop. We have tried some concepts. So, if you look at our home page, first of all, on mobile, the percentage of traffic on home page versus article page is very low, something like 9%. If you look at all our on-web traffic, about 9% is coming from home page, the rest is all article. If you look at desktop, that number rises to 27%. People are coming to our home page, and the number one reason is real estate. If you go to the mobile home page, you can see four stories. If you go to the desktop, you can see 36. So, I do think in the future, the top-most important stories will be human-driven. Machine can suggest but you make the decision. But for the bottom parts—do you really want 10 people looking to figure out that piece or should the machine fill it and the human can have veto. That’s the world we will end up in, and we are fairly close to that. For the top, the machine suggests but you are the decider. For the bottom, the machine puts it, but you can take it out if you don’t like it.

What are the other grey areas that have come up in your experience where you still have no proper answers?

The basics are—print versus digital is still not figured out. I still think that there are pockets in the newsroom, pockets in engineering, who long for an easier time. It’s not solved.

Then, subscription versus advertising is still an area of confusion, no consensus. Other area is video, is it a good thing to do, is it a bad thing to do, is it profitable or is it not? How much should you do? At the Post, we built something called Post TV because we wanted to do more Netflix-type news shows and train the user to come to the Post at 2 O’clock to listen to a half-an-hour show and to come at 6 O’clock for another one. We launched with four shows, spent a lot of money on building it, but it was a complete flop. Users did not come to look at those long shows. We ran it for, maybe, six months and didn’t get the traffic. So, we changed our video strategy to do video that is basically part of the story, the more traditional stuff.

But now, you have to ask if this is a grey area. Should we do deep investigative videos? Or should we try to spread video as much as possible? Because from a business perspective, pre-roll for video is very lucrative. We are talking to $40-50 CPM (cost per mile or cost per thousand impressions denotes the price an advertiser pays for one thousand views of an ad). So, what we do is we try and put as many videos in articles as possible. And if you come from social or search on mobile, I will auto play the video for you because the chance that you are going to be a subscriber, if you come from those channels, is very low, so I might as well try and see how much money I can make from you. And the code will look to see if there is a video on that article and if there is, I will auto play it. Auto play means pre-roll will run first. That drives the revenue through the roof. It may be a good business strategy but what do consumers think? Do they really want to see your video? So, there is a debate on the future of video. It’s a grey area.

Are we getting distracted by the long tail?

It depends on what you mean by the long tail. Let’s take the Olympics. If it means covering the scores and blow by blow account of every sport, I think it is the long tail if you employ humans to do that. But, if the machine is doing that, and there is no risk in that as it is not an opinion piece, why would you not want it in your brand? Is it a distraction? It is not if it is easy to do. It is easy to do if the machine is doing it, and the risk is less. At the Post we have started the Morning Mix team. This team stays overnight and writes on what is going on around the world—it could be an event in Australia or breaking news in Sweden. It certainly drives a certain amount of traffic for us. So are we distracted by the long tail? Not when you are in the advertising business. If you are a subscription business, you probably are. If you are subscription-oriented, you have to do the original, investigative, heavy-duty stuff.

You have said cutting costs is never the solution. But in a newsroom, where we see fewer and fewer resources, how do you sell this to the owner?

You will make your numbers for sure by cutting. But how do you ride the ship? You can never win. Cutting excess is one thing, but by just cutting, you can’t win.


5 things to watch in digital publishing

Automated content creation: Automated content creation will have a significant impact on a publisher’s overall web traffic, especially if they are an ad-driven news site as all of them are page views. With a machine you can build the long tail. So, automated content creation is going to become mainstream in the next five years.

Fake news menace: The menace of fake news has reached a point where readers have stopped believing the internet news. Detection of fake news and leveraging technology to curb it to protect journalism brands has become crucial. Those who can maintain their brand, and focus on subscribers, will survive the fake news menace in the future.

Interactive voice technology: Augmented reality (AR) or virtual reality (VR) are good for video games but not journalism. Using voice technology such as Siri (Apple) or Alexa (Amazon) to make news more interactive will be a big thing. In the next five years, listening to news will become interactive either on a device, phone or a connected car.

News curation by tech firms: Technology companies are increasingly becoming news aggregators; therefore, newsrooms have to adopt technology at a faster pace. Firms such as Facebook and Google have access to cutting-edge technology, but now they have realized that building up the content business would require investment in excellent journalism.

War for talent: Technology companies have a lot of money, and they can offer fat pay cheque and stock options. It will be hard to keep journalists from joining the big technology firms such as Apple, Facebook, Amazon and Google as they start curating news. The war for talent is a big deal that will make or break news companies in the future.

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