Content Startups – Are Indians Willing to Pay for What They Read?
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A few sips of hot tea and a wholesome newspaper all to yourself was what described a typical morning for every, common man out there. But times changed, as people who are now on the go 24X7 and have developed a habit for a variety of faster and crispier forms of content. The 24-36 page newspaper has safely been replaced with a light-weight phone wherein people now command access to different genres of news articles every day.
The digitization of media outlets coupled with mobile penetration and affordable data packages has encouraged the launch of digital media platforms and news aggregators.
Content startups – a term collectively used for these startups have different focus areas depending on the end consumer of news. While some work on the B2C model, there are several of those who work according to a B2B model, wherein content produced by the reporters/journalists are then sold to different national and international level news organizations.
Pankaj Bansal, Founder and CEO, Newspatrolling.com claims that his company is taking the concept of news aggregator a notch higher. “Our company is not affiliated to any political party, organization or individual, something that helps us maintain the integrity of our news stories and opinions. We are the voice of several individuals and organizations that utilize our platform as an effective alternative for mainstream media,” Bansal said.
Where these startups stand today?
According to data provided by startup research firm Tracxn, there are 146 startups in the Content space (specific to News) in India. Out of these 146 startups, 9 startups have raised funding since November 2015. These startups cater to different news domains such as lifestyle, politics, development and social issues and sports. Some startups also that act as aggregators that package several news items together.
- In 2016 the biggest round of $25M was raised by DailyHunt in Series D in Oct 2016 followed by $2.2M by OneIndia in Series A in July.
- In 2015, the biggest round of $40.5M was raised by DailyHunt in Series C in Feb, followed by $20M round by InShorts in July
Are investors being finicky while betting their money ?
Despite the fact that most of these news portal and aggregators have garnered the right amount of readership from their respective target audience, investors are still very cautious about placing their bets. According to most entrepreneurs at these startups, VCs generally expect quick returns from these business models.
What makes it even more challenging is the unwillingness of B2C Indian consumers to shell out money for quality content as people are still prone to buying a newspaper for a few INRs.
Gangadhar Patil, founder and CEO of 101 Reporters, a news platform which sources original stories from grassroots reporters across the country, then edits and markets them to the national and international media. Patil, who has previously worked as a journalist with several mainstream outlets, said VCs are generally in search of startups that can grow to become a billion dollar company in future. On the contrary, Patil said that it was easier to convince angel investors hailing from a media background with this idea.
Some of the major concerns that bother other angels are authenticity of reporters and their sources, filtering junk from genuine stories and the availability of tools to audit their stories.
“VC companies are driven by probabilistic equations and are largely apprehensive until and unless they come across a really bright idea,” Newspatrolling.com’s Bansal said. The company recently secured seed funding from an undisclosed investor.
Here’s what investors basically look for!
According to investors, there are some high quality content companies which are seen emerging from India. However, it will be interesting to see how these companies utilize the benefits of affordable data plans like Reliance Jio to expand their reach in the country.
“With paucity of time, the short form content always helps, with technology one can direct the relevant content to users and can save time. However the monetisation could be challenge till time critical mass is there on platform to consume content aggregated thru technology,” Anil Joshi, Managing Partner of Unicorn India Ventures said.
Shalini Prakash, Principal at 500 Startups believes that it would be interesting to explore companies that are focusing on vernacular content. . Quality of content, user acquisition strategy, team and their domain expertise are some of the most important qualities that she would evaluate prior to investing in these startups.
Readers today are willing to shrug old habits and experiment with products that provide faster and packaged content. However, it will be interesting to see how this domain maintains its sanity and quality while monetizing their content.