Media properties become profitable in 4-6 years: The Quint’s Bahl, Kapur

Raghav Bahl and Ritu Kapur’s The Quint was one in a burst of independent digital news outfits that launched in 2014-2015. This was soon after they had exited Network18, a firm they founded in the nineties. After six years, that is, in July 2021, The Quint reached 24 million unique users, going by Comscore data. Quint Digital Media – which has The Quint (English), Quint Hindi and Fit – generated Rs 22 crore in revenues in the year ending March 2021. Besides, Bahl and Kapur have invested in Youth Ki Awaaz, Owlet, The News Minute and Quintype, among other digital media firms. These are separate from Quint Digital Media. Vanita Kohli-Khandekar spoke to them on what it takes to build a digital news business in India. Edited excerpts:

What has the journey of building The Quint been like?
Raghav: When we started, digital was just coming into its own. There was the anticipation of growth but the pace at which it has grown is astounding. More than 80 per cent of Indians get their news and information on social media; about 68 per cent get it from a handheld device. The Quint’s journey has mimicked that exponential growth. Mainstream media brands are no longer experimenting with digital advertising.

Ritu: The challenge is how the subscription and ad revenue work out even as legacy brands get in. Till one year back, they were all talking about digital being a separate thing.

Won’t new sites like Bloomberg-Quint have an upper hand in the subscription game, given they were born digital?
Raghav: You need to compare apples to apples— say Bloomberg-Quint to ET-Prime. Bloomberg-Quint has done better on subscription growth and been more aggressive because it is a smaller product with lower costs and traffic. More importantly, it does not have a legacy business to protect.

Ritu: Two years back, 55-60 per cent of our traffic was only younger people. As the audience base grew, the 30-45 years age group has grown too. This has to do with how we are positioning ourselves. Also, older people have a higher propensity to pay.

How do you balance the monetisation bit? With 70-80 per cent of digital advertising going to Google/Facebook, only 20-30 per cent of the pie is left. And, hard journalism is a high cost business…
Ritu: It is important for us not to chase reach. For NDTV or HT, their USP is reach. Indian Express gets a chunk of its traffic from its Bollywood content. We don’t have that pressure of keeping up with the SEO (search engine optimisation) game. There may be months when the SEO guy puts out say five stories on say ‘How to make friendships;’ they give us a spike. But what really helps us is deeper investment in our stories and video to get subscribers.

Raghav: Media properties become profitable in 4-6 years — whether it is Colors, CNN-IBN or The Quint — they all follow the arc. There is a lot of upfront investment and it takes 4-6 years for revenue to go ahead of cost. So, you have to come in with the thought that you will fund this for 4-6 years. The Quint has been profitable for the last four quarters. In the current quarter, it generated free cash flow and we are in our sixth year. There is a very similar trend in Bloomberg-Quint. It hasn’t broken even yet, but is very close to it. The News Minute is very close to profitability, Youth Ki Awaaz is already profitable. At Network18, we had to spend Rs 200 crore before we started seeing profits. At Quint, from Rs 100 crore upwards, there is return on capital employed.

What is the rationale behind investing in The News Minute et al?
Raghav: We wanted to run the business at scale because after Network18, we couldn’t do just one site. Strategically, we run only two of these — The Quint and Bloomberg Quint. On The News Minute or BookMyShow and some of the others, we are pure investors; we have no say in how they run their business. The idea is to have synergistic investments in digital media. Quintype was funded by us from scratch; Owlet is the only entertainment firm in the portfolio.

Where does The Quint – with its hard journalism-driven content – sit in the digital news ecosystem today? Given the new IT rules and the current atmosphere…
Ritu: On a day-to-day basis, we don’t look over our shoulder. Digipub (the digital publishers association that The Quint, among others, founded) has over 75 members (including individual journalists) and we follow those rules. What people are wary of is IT (income tax) and ED (Enforcement Directorate) rules. The petition (against the new IT rules) is in court. On where we fit: Over two years back, we shifted from a lighter millennial focus to becoming a more mainstream, hardcore news-driven but broad-based brand. Whatever we do, we do it seriously — even film or sports.

Raghav: We have chosen to be unique. Our future competitor is NDTV. Usually, sharp verticals — say on sports, or entertainment — get early success. We are quite clear that 10 years out, the entire game will be digital. That is when we will have a level-playing field with the large, legacy players when there is no newspaper to amplify the story.

What are the lessons from linear that are good for digital and vice versa?
Raghav: The interactivity of the medium overwhelms you, when you come from linear. The sheer volley of return traffic is something else. It would be foolish to either ignore it or to be run over by it.

Ritu: My advice to legacy media would be to prioritise your non-linear platform. They have so many feet on the ground: they can break more stories. But they hold onto it for prime time. On digital even a fraction of that news does well. Business Standard