It so happened that in Ukraine the media is more of an instrument of influence, rather than a profitable systemic business. It is becoming more and more difficult to monetize a news portal and high-quality analytics on the Internet.
In the world of post-truth, journalists increasingly have to compete with bloggers, and online publications with social networks. Ligamedia is a unique case for Ukraine of successful monetization of the audience and the reputation of a media project.
Dmitriy Bondarenko, CEO of Ligamedia and CEO of LIGA Group of Companies, shares the secrets of how to make money on high-quality journalism in the post-truth era with the readers of our almanac.
THE POST-TRUTH MEDIA
The post-truth era in which content producers and consumers live and operate today has an impact on the business models practiced by the media. How and on what are you ready to make money – in the answer to this question – the red line for many media.
After all, what is media earnings? Civilized models of earnings are monetization of advertising and traffic, it is correctly labeled PR in its various forms. These can be grants for the development of some topics. This is a subscription model where the reader pays for quality content produced for him. But there are fundamentally different approaches, when the trust of the audience and the influence of the media are monetized – political, business, reputation, etc.
Modern technologies allow developing various platforms for delivering a message to a reader or viewer. This multivariance blurs traditional notions of journalism. For example, the line between journalist and blogger is rather fluid.
A blogger who gives a vivid, extremely subjective interpretation of an event may have a readership larger than that of other media. Some media outlets are trying to adopt blogging techniques, monetize influence, rather than information services. This is a problem not only for the media that produces content, but for the whole society: are citizens ready to take responsibility for the information they consume?
JOURNALISM UNDER IMPACT
Previously, journalism was a workshop with a certain set of professional standards. The media business model was based on these standards. Buying a newspaper, the reader also bought its reputation, hoping for their money to receive information produced by the workshop of professionals. Now the concepts of media and professional journalism have diverged – they no longer coincide.
This is especially true in relation to socio-political and economic media. Professional journalism is now under the greatest threat. A journalist must receive an appropriate education, go through a serious school, follow certain professional canons. And next to the pros, in the same information space, there are media that do well without all this and feel much better on the hype.
They have fewer costs, fewer restrictions, primarily internal ones. It would seem that the choice between such media and professional journalism should have been made by the consumer, but, unfortunately, he refuses to make this choice. As a result, a society that is unable to choose between truth and falsehood exists in the gap between being and appearing, an adequate idea of reality is not formed in it.
CRISIS OF RELIABILITY
What is credibility? How does it arise? If the information passed through the hands of professionals who did not distort its meaning, did not add or remove anything, showed the picture from different angles, this is reliable information. Today, the demand for such a presentation of information is falling. In the face of competition with blogs and social networks, some media are beginning to become like them, primitivizing the presentation of information and devaluing journalistic work.
The emphasis from the quality of information is shifting towards the quality of the individual. The reader and viewer a priori believe what the popular media character says, he is not interested in the reliability of the information he voiced, how true it is. Psychologically, this is a kind of attempt to avoid responsibility, communicative obligations, which suggest that you have to analyze and think.
Refusing to draw independent conclusions, people, in fact, delegate this to promoted media persons. Moreover, this is a global problem, and not just a problem of Ukraine. See what public people tweets in the US are doing. A tweet from a reputable businessman can rock the stock market. This is a completely different reality compared to the one in which there were consumers and producers of journalistic content 20 years ago!
DEMAND VERSUS RULES
Can society, the authorities, the journalists themselves somehow set the parameters of the information environment that would stand up for the protection of authenticity? I have been thinking about this a lot, but have not found a uniquely effective solution yet. We can come up with different models – create self-regulating organizations, pass bills … But there will always be a difference between the rules set “from above” and the model based on public demand.
Subscription-only media is a great commercial approach, but it also has its challenges: your readership can take you anywhere. Yes, you can set some kind of framework, but what if the consumer request escapes from this framework?
It is these processes which we are witnessing now all over the world. One of the possible solutions was offered by Great Britain. The country is trying to introduce payments for quality media as a public service. But in this case it is no longer about business, but about a social institution.
In general, the market demand for reliable quality journalism is low. We see that people are reluctant to pay for content. This is understandable – around the sea of free sources of information. In Ukraine of forty million, media gathers only a few thousand subscribers. This is the “nuclear electorate” of quality media – socially responsible, thinking people who want to make adequate decisions in the changed circumstances.
It is possible to monetize high-quality content, but it is unrealistic to limit readers’ interest, prohibit people from expressing their opinions, or take total control of all social networks. Yes, we know that China is making such attempts by introducing a traffic filtering system and restricting access to sites. But I don’t believe in the positive effect of such a model on society.
Any usurpation, no matter how well-intentioned it may be justified, will lead to dire social consequences. Any conversation about the structure, content and rules of communication brings us into the sphere of consciousness. And here there can be no primitive, linear solutions, such as taking and simply forbidding everything. I think we are now experiencing some kind of transformation of consciousness.
Thanks to the development of information technologies, mankind received a very attractive toolkit, but people did not have skills of safety work with it. The global society is growing up. This global child gets opportunities before realizing the consequences of their use. The world in general, and Ukrainian society in particular, needs to go through this stage.
And systematically develop certain skills so as not to wallow helplessly in information bubbles. People today want to read and think less, and scroll and watch more. Of course, a lot here depends on the state, which can and even must carry out mass explanatory work, stimulate the development of high-quality media, and educate people about the standards of information consumption. People don’t want to read. They want to scroll and watch. Think less, do less. This is a trend that I am seeing.
MEDIABUSINESS FEELING A MODEL
But much depends on business, which today is the driver of technological and social progress. For example, Google is starting to implement initiatives to support producers of quality and original content.
He changes the algorithms, and now they will display the original sources in the first lines. Facebook offers its assessment of what can and cannot be trusted. At international conferences, representatives of social networks declare priority support for content producers, not resellers.
That is, at the global level, there is a search for a model within which it is possible to separate professional journalism from information slag. Today, it is still possible to get situational benefits on hype and fake, but strategically, those who produce a quality product will benefit.
The world is coming to understand that informational permissiveness is a global threat. Much depends today on quality sources of information. For example, in a pandemic or civil conflict, the value of reliable information is extremely high.
FOR THOSE WHO FORMS GDP
The experience of Liga.net suggests that a high level of reliability can be of interest not only to a narrow, niche audience, but also to a general reader. Up to 9 million unique consumers read us within a month in Ukraine. This is 10% of the share of national traffic. The League as a media is part of a larger ecosystem.
In a world where rumor is more interesting than fact, and information consumption is situational, you need to learn to work with many trends at the same time, to maneuver between them is quite a lot of intellectual work. We perfectly represent the portrait of our multimillion audience.
There are about the same number of women and men among our readers. Young people don’t read us at all. There is a small proportion of the elderly. The main audience is the socially active part of the population, people who form GDP and pay taxes.
They start reading us after graduation, when a person begins to play an active social role: work, create, participate in economic life, engage in entrepreneurship. We can say that this is the “middle class”, judging by age, education and life goals. We are clearly positioned and work for those who care about understanding the real economic agenda rather than “hype gum”.
“LIGA” AND POWER
Liga.net is distanced from political scandals, jeans and “black stuff”, although, of course, we realize that our politics strongly affects the economy. Therefore, we are often very critical of the quality of public administration in Ukraine, but criticism for the sake of criticism does not interest us. It must be said that independence and an objective assessment are certainly not at all what any government expects from the media.
It wants control and loyalty. From time to time we received offers to buy. But the media is a cross between a social institution and a business, it cannot be evaluated as real estate or a bank. I am not ready to sell it for any money and to just anyone.
If a good offer is made to me, as a businessman, of course, I am ready to consider it. However, in Ukraine, control over assets is not always sought to be obtained in a civilized way. In 2014, they even tried to force us to transfer the publishing rights to the “right” hands. True, this pressure on us did not end with anything – we retained our independence and continue to work further.
No government has ever particularly loved us, and we, in turn, tried to keep a certain distance from politicians and officials. Not even because they are totally bad people – there are many worthy and value-oriented people among them. It’s just that the “Liga” has learned to perfectly monetize an information product, and we do not need any kind of super-reference from proximity to power.
Moreover, this closeness can negatively affect the reputation with readers, which we value very much. We do not separate ourselves from our readership and together with it we ask questions: does the country’s leadership – present or past – have at least some systemic vision of the future? How does it see Ukraine’s place in the global world competition? How is it going to improve the quality of life of Ukrainians?
For me, politics is a struggle of ideas and goals, not a struggle of bulldogs under the carpet. Unfortunately, the Ukrainian authorities are still not interested in a high-quality and meaningful dialogue about the future. I had experience as a member of the Kiev City Council.
But, as a native of Kiev, I perceived it not as a policy, but as a social burden. Perhaps someday my attitude towards politics will change. But so far I see that for decades the political system in Ukraine has been formed by people who block changes and development. Business today gives me much more opportunities to influence society.
PHILOSOPHY OF FAMILY BUSINESS
The LIGA Group of Companies is a family business. Its philosophy is based on the fact that assets in various niches are owned by the whole family, not just one person. We have a common strategy, and all beneficiaries are the beneficiaries of its implementation, we agree on common goals and objectives. But each company in the group is independently managed, so the political views or personal preferences of family members never affect the company’s operations.
At home, we, of course, have heated discussions, but in our work we do not intersect – each family member is responsible for his own direction, interacting with other family companies as an independent entity. For example, I am responsible for a number of businesses in the group and directly manage the media business. My brother manages two social investments in the field of ecology.
In general, social responsibility is a priority concept for us. We can say that most of our projects have a social component in one way or another: whether it is the media, a charitable foundation or a program for the development of non-state pension provision …
The result that we have today is, first of all, the social reputation capital, accumulated over many years of hard work and large investments. When creating the company, our family initially set red lines, which should not be violated under any circumstances.
CHANGES AT THE DNA LEVEL
Reputation and business model are interconnected. Especially in the media business. We have always followed the standards of journalism, initially positioning Liga.net as a quality, independent media. It is no coincidence that they say that any company’s budget is similar to its first budget. What is embedded in the company’s DNA at the level of mission, goals and values stays with it for life. Our peculiarity is that we have never been a print media.
Perhaps we are generally the first digital information resource in Ukraine. We started publishing online news feed back in 1997, when the Internet was not as widespread as it is now. Thanks to this feature, Liga avoided the difficult and painful transformation of the print edition into a digital format.
In the second half of the 2000s, there was a period when the commercial results of our media business were rather modest: the company did not bring huge losses, but the profit, if it was, was very small.
Since 2007, sales volumes have increased significantly, however, the crisis interrupted this positive trend, and the asset became problematic. It was unprofitable, but behind it was a brand reputation, big investments, an audience of millions and many years of work. It was as irrational to close or sell a losing asset as it was to continue financing it without changing anything.
Therefore, in 2014, it was decided to radically change the approach to media asset management. As a crisis manager, I took responsibility for the company and restructured the group. Since then, it has been developing within the framework of that model, in accordance with the DNA that was laid down in 2014.
Of course, I was aware of how difficult the task I had to solve, but I was motivated by the ambition. I believed that it was possible to find a civilized way to monetize a multi-million dollar audience, and I proved that it was possible. Probably, the fact that I was not a media person played a role here, I could go beyond some restrictions and look at the market in a new way.
DIVERSIFICATION OF PROFIT SOURCES
I realized that Ukraine has a specific landscape of the media market – most media owners do not set business goals for themselves. For example, all our television channels are unprofitable. Their actual and legal beneficiaries often do not coincide. The media ownership structure is not transparent, although the state is trying to do something in this direction. Many media outlets are funded by “all”, in fact, being part of the shadow economy.
All this negatively affects the development of the media market. Because if there is a person who pays all your bills, regardless of the business outcome, it corrupts all market participants, generates an endless war for political interests and abnormal price competition. In such a situation, making money on the media is incredibly difficult. In addition, with the advent of Google and Facebook, the lion’s share of advertising budgets began to flow to them.
The solution was found when I realized that we could not live on the same income cycle. In Ukrainian conditions, relying on one channel of profit and maximizing it is tantamount to suicide. There is another dead-end path – to sell a product about which you yourself invented that it is the best. We developed a strategy for diversifying our profit channels and began to consistently implement it.
To do this, first of all, I had to give up the habit of looking at myself only through the audience, and not through the business assets that have been accumulated over the years. We wrote out such assets, analyzed strengths and weaknesses – traffic, sociology, our reputation, team competencies, our values … To expand the channels for making money, we had to radically change the sales technology and the quality of our work with the team.
Having looked at ourselves differently, we looked at our clients differently. As a result, we began to develop alternative models of traffic monetization, we have new advertising formats, we were the first to start doing special projects, and we opened up new opportunities to make money on PR. We ran to any point where you can make money. So, one of the commercial trends for us is working with grants.
But a grant is not income, as some believe, it is an opportunity to produce more high-quality content and, accordingly, attract an additional audience, which we have already learned to monetize in other channels. Grants are a fuel additive that does not replace gasoline. If in your activity you focus only on grants, then this is no longer a private business. Therefore, we take a very balanced and responsible approach to participation in grant programs.
STAGES OF BUSINESS TRANSFORMATION
The transformation of Liga.net took place in several stages. From 2014 to 2016, hygienic changes took place. We have updated the platform, rebuilt commercial processes, and optimized costs. And only after putting things in order and discarding all unnecessary, in 2017 they concentrated on development. In 2018, they ceased to be unprofitable and went to zero. In 2019, they finished with a small profit.
In 2020, we were all hit by a pandemic, and we turned to our readers, asking them to support high-quality and independent journalism at a difficult time. We didn’t know how our readers would react to this. Therefore, when thousands of people voted for our work with money, we took it as an applause from the audience for the fact that we are producing a quality product.
It also showed that the bet on alternative monetization channels was correct. I do not believe that media in Ukraine can exist exclusively through subscriptions. But I know for sure that the formation of a community and subscription must be in the model of the functioning of the media. Therefore, we continue to search for new monetization formats. Among the main tasks is the launch of the Ukrainian language version and the sale of access to information without advertising.
Our readers understand that advertising is our income, which allows us to make a quality product for them. But for those who get in the way of advertising, we meet halfway and provide a paid service to turn it off.
Monetizing the value in which you invest money is fundamentally important. For example, we make content that is unique and interesting to the reader. Using a paid service, he will be able to receive it as an insight – exclusively, earlier than others. People are happy to respond to such offers, the main condition is that it should be as simple and convenient as possible for them to pay for them.
BUSINESS IS THE ART OF THE POSSIBLE
These changes required a colossal restructuring of the team at all levels – management, marketing, sales, editorial staff. As a result, our team has doubled. Today we employ just over 100 people. Marketing, sales, IT and the back office account for about 40% of the staff, while the editorial office accounts for about 60%. Over the past 6 years, we have increased the volume of income by 3 times, and expenses by 2 times.
The difference between them allowed us not only to become profitable, but also to increase our audience by 2.5 times. We have grown significantly in terms of topics. Expanding the product line, we assess the monetization potential of a particular topic and then invest money in the creation of content and infrastructure. Business is the art of the possible. We closely follow the trends, accumulating serious marketing and commercial competence in the digital field.
Today, for example, two-thirds of traffic has become mobile, and there are other opportunities for working with your domain, Google and search platforms. The trend of audiovisual content, which is derived from the development of devices, is gaining momentum all over the world. Technologies already exist to turn text into audio.
When they become mainstream, it will have a big impact on how content is consumed. At the level of our company’s DNA, there is no compliance with these trends yet, although we are already starting to develop it. After all, the main thing that has appeared in our DNA over the past 6 years is the ability to transform, successfully coping with the most difficult challenges.
Photos courtesy of Dmitriy Bondarenko