Addressing Economic Challenges For The Journalistic Media In The New Period - Giải Quyết Bài Toán Kinh Tế Đối Với Báo Chí Truyền Thông Trong Giai Đoạn Mới

Keywords: journalism economics; subscription model; economic effectiveness; journalism; Vietnamese media.

Tóm tắt: Trong bối cảnh khoa học công nghệ phát triển, truyền thông báo chí có những bước phát triển mới ở quy mô toàn thế giới, vấn đề phát huy tính kinh tế hiệu quả, tự chủ tài chính trong hoạt động báo chí trở thành một xu hướng tất yếu, ngay cả tại Việt Nam. Do đó, bài toán kinh tế đối với báo chí nói chung, báo chí truyền thống nói riêng trong giai đoạn mới trở thành một chủ đề nóng được các nhà quản lý, tổ chức đào tạo báo chí, nhà báo, chuyên gia… bàn luận, tìm các giải pháp phát triển lâu dài cho lĩnh vực truyền thông báo chí ngày càng được quan tâm mạnh mẽ. Bài viết này mang tới một cái nhìn tổng quan, gợi mở về thực trạng thực hiện kinh tế báo chí tại Việt Nam, rút ra các nhược điểm, hạn chế còn tồn tại, từ đó đưa ra các khuyến nghị, đề xuất để nâng cao hiệu quả phát triển kinh tế báo chí tại nước ta trong giai đoạn mới.

Từ khóa: Kinh tế báo chí, mô hình thu phí, hiệu quả kinh tế truyền thông báo chí.

1. Introduction

According to the Prime Minister's Approval of the National Development and Management Plan for Journalism until 2025 (Decision 362/QD-TTg issued on April 3, 2019), the financial mechanisms for journalism serving political and social communication such as entertainment and commerce tasks are clearly defined. The State is responsible for investing in and ensuring the fulfillment of specific tasks by certain media outlets that serve political purposes. Other journalistic activities that fall outside the scope of this Plan will be proactively undertaken and maintained by the unit in charge of press activities. This financial mechanism raises issues of financial autonomy and balance in terms of expenditure and revenue for press agencies in Vietnam.

In the current context, numerous newsrooms are performing a dual mission: first, ensuring the fulfillment of their political and social duties in accordance with the purpose and principle of the newspaper; second, engaging in legitimate economic activities and business operations to ensure their survival. The development of the economic aspect of journalism has emerged as a matter of significant concern for both the Government and press agencies have focused on in recent years.

Assoc. Prof. Dr. Le Thanh Binh (2021) defines the press and media economies as models, pathways, strategies, plans, and methods of organizing mass media activities to achieve economic efficiency and profit^[1]. In other words, press and media economic activities refer to activities undertaken by media agencies to generate revenue and profits, thereby ensuring the operations and development of the press agency^[2]. Thus, press economic activities include: (i) direct revenue and (ii) indirect revenue coming from advertising, organizing events, donations, renting equipment and facilities, cooperating or associating in implementing communication and PR projects with other partners, and so on.

Currently, press agencies’ revenue mainly comes from providing advertising services. However, in the new context where the global economy is encountering unprecedented shifts, revenue from advertising fluctuates and brings risks of revenue decline, especially when the print media competes with emerging digital, personalized, and interactive advertising models. Consequently, the pursuit and application of economically viable business models for journalism have become a crucial task for press agencies in this new era.

2. The status quo of journalistic activities associated with economic performance in recent years in Vietnam

2.1. From the perspective of press agencies

According to the research data from the Institute for Policy Studies and Media Development (IPS- under Vietnam Digital Communication Association), the five main sources of revenue for press agencies include: (i) advertising in newspapers (including print, broadcast, visual, and electronic newspapers), (ii) revenue form publishing print newspapers or access fees for certain online platforms such as the digital version of newspapers, magazines, online newspapers specializing in consulting, services, specific instructions, etc.), (iii) media contracts, (iv) sponsored content and (v) affiliate marketing and digital advertising^[3]. Among these revenue sources, affiliate marketing and digital advertising are the new sources of revenue that press agencies can make use of thanks to the digital transformation process.

However, in line with the trend of global journalism, the two main sources of revenue for the press, namely advertising in print media and print newspaper circulation, are currently experiencing a significant decrease. Even revenue from advertising in broadcast media and television is consistently declining. Specifically, according to the information from the 2023 Press Economic Forum, in 2021, the overall revenue of the print newspaper sector decreased by 30,6%, while the total revenue of the magazine sector witnessed a considerable drop of 44,6% compared to the previous year^[4].

The current context presents a significant challenge to the journalism and traditional media industry as their reliance on advertising exposes them to the risk of declining revenue. This is evident as social media platforms like Facebook, Instagram, or Tiktok continue to gain popularity. These platforms offer advantages in terms of customer profiling and effective distribution of personalized advertising content to specific groups of target audiences. Thus, they have enabled businesses to advertise their products on digital platforms, instead of traditional media channels as they did in the past.

The rise of social media has brought about changes in readers’ news consumption habits, especially in their shift towards online platforms. According to Vietnam Media Landscape Report 2023-2024 (published on December 15, 2023, by Global PR Hub in collaboration with the global advertising platform MGID), Vietnamese people send an average of 2 hours and 11 minutes for newspapers and magazines. This figure is relatively modest when compared to the average time that Vietnamese spend on accessing the internet, which is 6 hours and 23 minutes.

At the discussion session on diversifying revenue sources of press agencies within the framework of the 2024 National Newspaper Conference held in Ho Chi Minh City, Mr. Tran Xuan Toan, Deputy Editor-in-Chief of Tuoi Tre Newspaper stated that: “Recently, readers’ habits have changed, leading to a shift in revenue structure of Tuoi Tre Newspaper. Revenue from print advertising has seen a significant decline. Previously, 75% of our revenue comes from newspaper sales and print advertising, however, 75% of our revenue comes for digital platforms now.”^[5] (Nguyen Anh, 2024, Mr. To Dinh Tuan, Editor-in-Chief of Nguoi Lao Dong Newspaper, also acknowledged the difficulties arising from the decline in revenue, which is a shared challenge for most press agencies in this context.

Additionally, despite high expectations, digital newspapers require more time to generate sustainable revenue. According to the report from the Press Department, Ministry of Information and Communications, the revenue of both print and digital newspapers still heavily relies on advertising. Revenue from this source consistently accounts for over 60% of the total revenue, and in some cases, it can reach up to 90%. On the other hand, due to the profound impact of the global economic downturn, businesses are gradually reducing costs for advertising and communication activities (including partnerships, projects, serviced contracts, etc.), resulting in a decrease in the number of advertisement and communication contracts. This, in turn, leads to a decline in the revenue of press agencies.

Commenting on this issue, journalist Nguyen Nhat Hoang - Deputy Chief Editor of the VietnamPlus online newspaper, stated: “Some media agencies have expanded to additional revenue sources such as revenue from organizing events or operating under a communications company model, but the scale of these is not significant”^[6]. Faced with these challenges, many media agencies nationwide have implemented reader subscription fees to create new revenue streams.

Globally, content subscription fees for digital newspapers have become a common trend that are receiving significant attention from many media agencies. According to the Report on Global Digital Subscription from the global media network FIPP, the number of digital newspaper subscriptions doubled within a year from 2018 to 2019. In line with this, findings from a survey conducted by the Reuters Institute for the Study of Journalism indicate that 50% of media agency leaders worldwide expect digital newspaper subscription fees to become a primary source of revenue in the near future^[7].

In Vietnam, more than 20 press outlets have experimented with content subscription fees for selected high-quality and content-rich sections. In 2018, VietnamPlus officially launched its subscription platform at Pay.vietnamplus.vn, dividing paid news content from free articles to avoid inconvenience or confusion for readers. VietnamPlus produces only 5 to 10 paid articles per day, accounting for some 5% of the total articles published on the website daily. The majority of the paid content consists of in-depth analysis, exclusive interviews, and licensed translations or articles for major international media outlets. Therefore, the introduction of subscription fees does not affect the provision of essential information to serve readers and still adhere to the mission and direction of Vietnam News Agency. VietnamPlus offers three fixed-price tiers for its paid articles: 10,000 VND for 7 days, 30,000 VND for 30 days, and 50,000 VND for 60 days^[8].

Following VietnamPlus’s model, in 2021, the e-magazine Ngay Nay introduced a paid version for its Special Today section. Similarly, in the same year, VietNamNet started executing subscription fees for its VietNamNet Premium section. Nguoi Lao Dong Newspaper also adopted a subscription-based model for accessing its digital content starting in late July 2023. For a reasonable fee of 100,000 VND, readers gain unlimited access to this section for 30 days.

However, according to a recent survey of IPS, the results of fee implementation still have numerous limitations. The survey revealed that only 7 media agencies participating in the survey generated revenue from reader’s subscription fees and 5 agencies generated only a small portion of revenue from readers. Furthermore, 56,5% of the surveyed press agencies have not yet implemented reader fees and have no plans to do so within the next 3 years.^[9]

In addition, press units in Vietnam also actively develop multimedia-orientated journalistic products and continuously improve the quality of both content and visuals to attract readers. The emergence of new specialized categories in print and electronic newspapers, featuring outstanding analysts and commentators, is the most compelling evidence of this trend.

2.2. From the perspective of Vietnamese Government

One of the effective methods for press agencies to increase revenue while implementing the Party and the State’s guidelines and policies is to exploit the ordering mechanism. This mechanism can support press outlets, especially when revenue from advertising activities experiences a considerable decline. For instance, in 2020, during the COVID-19 pandemic, the Ministry of Information and Communications placed orders for media outlets to engage in comprehensive communication campaigns and disease prevention efforts, allocating a budget of up to 4 billion VND. Similarly, in 2021, the Ministry continued to place orders central media agencies to promote Covid-19 prevention measures and assist businesses in line with Government Resolution 84/NQ-CP. with a budget of up to 45 billion VND. It is evident that by effectively capitalizing on this method, media agencies can secure a relatively stable source of revenue.

3. Limitations of Vietnamese press and media from an economic perspective and the experience of press agencies worldwide in organizing the press economics.

3.1. Some shortcomings and challenges in the economic efficiency of Vietnamese press and media

Considering the current situation of press operations associated with economic efficiency in recent years, Vietnamese press and media still have limitations and face certain challenges.

Firstly, there are shortcomings in the content management and organizational mechanisms within Vietnamese press agencies, including some specialized personnel in media-related departments. These deficiencies stem from a lack of awareness and proactive exploration, resulting in a slow adaptation of media organizations to the changes in media activities associated with economic efficiency as well as the diverse and rapidly evolving needs of the audience and advancements in science and technology.

Secondly, the majority of financial management and operational teams of press agencies have not been thoroughly and methodically trained in press economics. Therefore, when faced with new business models in the digital age, they require more time the familiarize themselves, adapt, and address the difficulties and challenges in operating effectively and lucratively.

Thirdly, press agencies need to well balance the relationship between socio-political missions and press economics. The reality is that in the current media industry, some agencies prioritize revenue and profits, chasing sensational and controversial information. This certainly harms the principles, goals, and values of Vietnamese journalism, while potentially diminishing readership and affecting the revenue.

3.2. The experience of press agencies worldwide in organizing the press economics.

In the digital age, not only press agencies in Vietnam but also worldwide are under the pressure of declining revenues, which has become a common trend. In fact, “print newspapers and magazines are the traditional mass media that have been most affected by the development of the Internet. However, up to now, most countries’ media have the presence of online newspapers.”^[10] This situation brings both challenges and opportunities for media agencies to innovate and adopt new business models that are in line with the rapidly developing technological market. Some economic models applied by foreign media agencies to capitalize on the advantages of digital transformation, generate revenue, and sustain their operations are as follows.

3.2.1. Business-to-Business Model (B2B)

In the business-to-business modal, media agencies can (i) publish content based on advertising; (ii) act as a business providing advertising and media services, publishing branded content and products; (iii) serve as intermediaries to collect data for marketing campaigns of businesses^[11]. Depending on their operational approach, media agencies can well cooperate with different businesses with varying strategies, scales, messages, and potential customers. The scale, reputation, brand, and target audience of a print or electronic newspaper are important criteria that can benefit marketing campaigns. Hence, a number of businesses choose this approach to promote their products. Alongside the rapid development of the commercial economy, the B2B model is increasingly popular in the field of media and journalism.

A typical example of this model is the appearance of BuzzFeed, a media and entertainment company headquartered in New York, USA. Established in 2006, BuzzFeed focuses on creating trending news content and cultural ideas. Its business operations are built upon a native advertising model. Content is sponsored or businesses pay to have advertorial articles placed on the website. Advertisements are seamlessly integrated into the content of the articles in a natural way, making it difficult for viewers to distinguish between advertising content and news content. According to BuzzFeed’s CEO, in 2019, most creative content departments of the platform generated revenue^[12].

3.2.2. Business-to-Customer Model (B2C)

The business-to-customer model (B2C) is a form of transaction between a business and consumers. In this model, the press agencies play the role of (i) publishing paid content or membership-based content; (ii) crowdfunding to sustain operations and produce high-quality content; and (iii) retailing products through e-commerce. Besides, in revenue generation strategies, the editorial department needs to attract the public to contribute to the newspaper. The public can participate in three forms: (i) Donors; (ii) Subscribers; and (iii) Members. In essence, these three forms are not exclusive but mutually supportive, however, there will be some certain differences^[13].

Bloomberg is an example of this business model. They offer unlimited subscription packages starting at $34.99 per month or $415 per year, giving readers access to all articles, videos, podcasts, and exclusive subscriber activities. The newspaper also provides discounted packages for specific target groups such as businesses, students, and professionals^[14].

3.2.3. Paywall Model

As newspaper is no longer the only lucrative advertising platform, the paywall model has become a popular trend worldwide. Various newspapers in North America, Europe, Asia, and other regions have implemented this model since the 2000s. Examples include The New York Times, The Wall Street Journal (USA), The Times, The Guardian (UK), Le Monde, Le Figaro (France), Nikkei magazine (Japan), and so on.

Currently, there are three paywall models in use:

First is the Hard Paywall. This model requires the public to log in and pay before accessing content. Typically, a hard paywall only shows headlines, introductions, or a few paragraphs of an article. To read the entire article, the public needs to subscribe. Specialized content newspapers commonly use this model.

The Financial Times (currently owned by Nikkei) in London is a successful example of a hard paywall model. Users can see the headlines or a 15-35 line introduction of an article if they are not logged in, and then the paywall appears with specific instructions. Currently, The Financial Times offers four basic subscription packages: (i) $68 per month for unlimited access to content, including in-depth research content; (ii) $40 per month for access to all basic content; (iii) $2.75 per month for the online version of the print newspaper with a discounted $4 per month for students and (iv) group packages based on readers' needs and quantity^[15].

The second is the Soft Paywall. This model enables the public to access a certain number of articles before they have to pay to continue reading. Compared to the Hard Paywall, this model is more flexible, allowing users to read a limited number of articles before deciding to subscribe. As a result, many media agencies prefer this model.

A successful example of a soft paywall model is The New York Times. Currently, the newspaper allows the public to read 5 free articles per month. If they want to read more, they need to subscribe. The basic package costs $2 per week and grants access to NYTimes.com, all apps associated with the newspaper, unlimited articles from The New York Times since 1851, and the ability to read the newspaper anytime, anywhere. The newspaper also offers special packages for academics and group subscriptions with pricing based on the number of participants^[16].

And the last one is the Freemium Model. This is a combination of the free and paid models. It follows the principle of attracting a large customer base through free basic products and then charging for premium features. This means that if the public wants to access the full version of the newspapers, they have to pay an additional fee to upgrade their product package.

The Wall Street Journal, a business-focused newspaper, is a compelling example of this model. The newspaper categorizes articles into paid and free types, with paid articles marked with a key icon at the end of the headline. When the public selects a paid article, the paywall appears, requiring them to log in or create an account to continue reading. The newspaper offers two basic packages: (i) A promotional package of $1 for the first two months and $9.99 for subsequent months, allowing access to all digital content; (ii) A package for both digital and print content priced at $52 for 52 weeks and over $10 for each subsequent month, and (iii) Group subscription packages for more than 10 people^[17].

Regardless of the model applied, the goal of the paywall is to require the public to pay, and this is a trend that multiple newspapers worldwide are moving towards. In the United States, as of February 2016, the percentage of newspapers implementing paywalls was 78%, with soft paywalls being the most popular. In 2022, The New York Times (or The Times) had a revenue of $2.3 billion, with $1.55 billion coming from print (nearly $574 million) and digital subscriptions ($978 million), $523 million from advertising, and $232 million from other sources^[18]. According to data published by the Reuters Institute for the Study of Journalism in 2019, 69% of the 212 largest media organizations in 7 countries had implemented a paid model for their digital editions^[19]. Additionally, to generate revenue from international technology incorporation, Australia passed a law that requires Facebook and Google to pay news agencies if they use their news content to protect independent journalism from being heavily impacted by global tech giants.

3.3. Lessons for the Vietnamese Press Industry

In the first stage, the failure of paid services also reflected the initial difficulties of this model. Payment processes and whether users are willing to pay for news play an important role at this time. In Vietnam, users are still accustomed to receiving information for free and are "not loyal" to any particular newspaper. On the other hand, the paid model relies on public trust and loyalty. For the public to be willing to pay for news, they need to have trust in the newspaper.

The transition from an advertising revenue model to a reader revenue model is not easy. Suppose the advertising revenue model is a game of circulation, requiring to reach as many people as possible. In that case, the reader revenue model focuses on a different perspective, which is to target loyal readers. To generate public loyalty, newspapers need to invest in high-quality, engaging articles, especially specialized content that can differentiate them from other newspapers.

The act of implementing paywalls in the initial stage also carries risks of losing readership. The Times, for example, had 105,000 loyal readers in 2010 but also lost 4 million readers per month compared to the period before implementing the paywall. Similarly, The New York Times had to stop its paywall service after two years of launching due to losses and then relaunched it later when the paywall model became more popular with the public.

In Vietnam, the public paywall model is still in its early stages and faces many challenges ahead. Currently, newspapers experimenting with the paywall model mainly apply the Freemium one, which only charges for in-depth articles that have been invested in both content and presentation on digital platforms. The Vietnamese press will need more time for readers to become more familiar with this model.

4. Recommendations and Suggestions

Here are some recommendations and suggestions to enhance the effectiveness of the economic operation of the Vietnamese press.

4.1. For press agencies

Firstly, media organizations can apply the SWOT framework in their overall structure (considering Strengths, Weaknesses, Opportunities, and Threats) to make use of their resources and competitive advantages. This will help them develop effective economic strategies and media operation plans^[20]. In order to transition to a revenue model, there is a need to change the organizational structure of newsrooms. Successful implementations of this model require breaking away from traditional newsroom models and adopting multi-functional or converged newsroom structures. Additionally, media agencies should train a "multiskilled" team of journalists who can produce multimedia products that appeal to various audiences. Furthermore, different departments in the newsrooms should have a common vision of attracting loyal audiences rather than just focusing on views and interactions. Building reader loyalty is a crucial step towards subscription and subsequent revenue generation.

Secondly, media organizations should invest in innovative content, particularly in the distinctive content of their publications. Nowadays, with the development of social media and information retrieval platforms like Google, readers have easy access to free information. Therefore, news agencies that intend to transition to a subscription model, need to address the question, "Why should readers pay for your content?" This necessitates the creation of specialized sections and unique content that differentiates their publications. News agencies need to give readers reasons to be loyal and willing to pay for the information they provide. Each publication can choose a specific market segment and delve deeper into it. Differentiation is essential for survival and establishing a position in the public's perception.

Thirdly, considering that Vietnamese readers are still unfamiliar with paid news content, it is suggested to pilot different fee structures in the early stages. Many newspapers worldwide have been successful by combining both free and paid models. For example, The Times allows readers to sign up with their email to access two free articles per week and offers multiple subscription packages based on readers' needs. Another example is Dagens Nyheter in Sweden, which allows the public to read a free trial for three weeks, with about 10% of the content being paid.

Fourthly, media agencies should capitalize on the achievements of modern science and technology. Algorithms, for instance, can help digital news platforms create personalized experiences for users and provide opportunities for multi-platform development. The application of modern technology promises to attract more audiences to news websites, optimize the news production process, and provide a competitive advantage against other platforms. Additionally, digital transformation can bring new business models to media organizations, such as data monetization, e-commerce, or becoming business partners with digital platforms.

4.2. From the Government’s Perspective

Firstly, to create favorable conditions for the economic development of the press, the Vietnamese government also needs to plan the press system and amend a number of specific policies on business operations and services in press activities to be in accordance with the industry's development trends. This will help the press increase its revenue sources as well as reduce its dependence on the government’s budget. Researching and establishing appropriate policy mechanisms is a prerequisite for the press to be financially autonomous. The process of the Party and State's orders for the press also needs to be fair, creating competitive opportunities for press agencies.

Secondly, towards the sustainable development of press business models, especially the subscriber-based model, requires strict implementation of the Copyright and Intellectual Property Law. Press works are the intellectual assets and efforts of press agencies, invested in both human and material resources, however, the issue of copyright infringement is still very common. Many Vietnamese newspapers have not yet implemented user fees, partly due to this problem. To charge readers, newspapers must have specialized content, in-depth research, etc. implemented by experts and journalists, and especially, that content must be exclusive. If the public can access articles for free on other platforms, there is no reason for them to pay to read that article. Therefore, the Ministry of Information and Communications, and the Ministry of Culture, Sports and Tourism also need to make adjustments to protect the copyrights of authors and the related rights of press agencies to create a healthy press operating environment.

5. Conclusion

In a nutshell, developing the press economy in Vietnam is still an urgent and topical requirement that is of concern to the Party, State, press agencies, and the whole society. It is also an indispensable factor in creating sustainable development, integration, and autonomy of press units. Currently, newspapers' revenue source still depends heavily on revenue from advertising. However, to achieve autonomy, press units also need to apply business models associated with economic efficiency consistent with the Vietnamese context, with reference to good international experience, including the subscriber payment model and other emerging models and initiatives. In the context that Vietnamese press readers are still unfamiliar with paid forms, their development still faces many challenges. Nevertheless, this is the common trend of world journalism and press agencies need research and investment to test, survive, develop, and stand firm in the new media environment while performing well the functions of the communication sector in the digital age and promoting long-term, effective economic potential.