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The Nut Graph’s future

Letters from our readers

TIS the season for celebrating so here’s the good news. The Nut Graph is going to be able to keep going until June 2010 for sure, potentially even to September 2010. And if some other funding we’ve applied for, and will be applying for, is approved in the months to come, we may even last till the end of 2010.

But, and unfortunately there is a “but”, we are clearly, to quote The Nut Graph‘s business development manager Cindy Tham, “not out of the woods”. Despite not having to shut down by the end of 2009, The Nut Graph will have to continue treading water until we find ourselves a sustainable business model for online journalism.

And the truth is, everybody who is in the online media industry is still searching for that holy grail of a business model that will keep public interest journalism alive and kicking. For example, despite Malaysiakini‘s phenomenal success as a 10-year-old news portal — currently the only paid news site in Malaysia — editor-in-chief Steven Gan still has cause for concern. “Getting people to pay for the news is like squeezing water from a rock,” he told a small group of media and industry players at a pre-anniversary dinner in Kuala Lumpur on 27 Nov 2009.

So, The Nut Graph is not really alone within the global and local contexts of trying to make an online news media financially viable, if not profitable. What does this mean for us, then?

Support, in all sizes

Honestly, I had expected to shut down The Nut Graph at the end of 2009. We’ve been treading water since May 2009 in terms of trying to rethink and figure out our business model. And that’s why it’s good news worth celebrating that we are able to hang on for at least another six to nine months.

We enjoyed the gesture!

What has enabled us to keep going longer than we expected despite our financial situation has been the generous donation of readers, and grants from funding organisations. Since our public appeal for donations began in August 2009, we’ve collected more than RM40,000. Donations have come in all shapes and sizes. From a lottery ticket that was anonymously dropped in our mailbox (we didn’t win but we so enjoyed the gesture) to a RM10 monthly donation to a RM15,000 cheque, we have been encouraged and humbled by readers’ support.

At the same time, we received funding from The Asia Foundation in Malaysia worth RM35,000. We also managed to secure funding for two projects in 2010, to be announced next year. There was also sponsorship from HSBC Bank Malaysia for a series of articles we wrote on the climate change conference in Copenhagen, known as COP15.

Excerpt of a donor’s letter to The Nut Graph

Others, whether individuals or companies, have offered services, advice and support in kind. Many of our columnists, for example, have continued to write for us for free even though they clearly could have gone elsewhere and gotten paid for their writing. Two columnists deserve special mention for repeatedly sending us their writing to be published for free — Petaling Jaya councillor KW Mak and historian Dr Farish Noor.

These and some cost adjustments in our spending have enabled us to stretch ourselves beyond 2009.

What next?

Despite all of these measures, it’s still not enough. That’s just the reality of the business of running an online news site. Especially one that will not scrimp on paying our employees fair and decent wages while not sacrificing our ethics, independence and integrity as journalists.

Some donations came with Post-it notes

As part of the measure to keep afloat a bit longer so that we can figure out what our new business model should be, I will be taking a pay cut beginning January 2010. But nobody else in the team will be expected to do so. Cindy, meanwhile, will leave employment at The Nut Graph at the end of 2009.

These, and other measures, will help us cobble together funds to hire a few more critical people, for example, a couple more journalists and at least two marketing executives to help me grow the business.

But what we really need are new streams of sustainable income. The one thing I’ve learnt from trying to keep The Nut Graph afloat is that somebody has to pay for the news. Over these past few months, after our original funders informed us they could no longer fund our operations beyond the seed funding they had committed, we’ve had to grapple with the question of who will pay for good journalism.

If advertising is not doing for online media what it does for the traditional media in terms of subsidising the cost of news reporting, then somebody else has to pay for it. I am convinced that if the public wants the kind of public interest journalism that asks hard questions, holds those in power accountable, and exposes corruption and abuse of power, then the public needs to pay for it. Because who else will?

Readers expect to pay for newspapers, but not
online journalism
But nearly all readers expect to be able to read news and analyses online for free, even though they have no problem forking out money for a newspaper on a daily basis. Indeed even a reputable news organisation like The New York Times has not been able to charge online readers successfully.

In all the reports we’ve read, I’ve only come across one by the Boston Consulting Group that said consumers would be willing to pay. But even then, the survey found that “the average monthly amount that consumers would be prepared to pay ranges from $3 in the United States and Australia to $7 in Italy.” That would mean having many thousands of subscribers to keep an online news site going and the evidence is, those thousands would be a miracle of sorts.

The Nut Graph is seriously contemplating a subscription model as well. We really have no choice despite the evidence out there. The trick, we figure, is how to make the subscription model work. That question is what will be occupying us in 2010. If we don’t figure out what will get people to pay for the journalism we do, there may not be a 2011 for The Nut Graph no matter the generous donations and grants.

And so here’s how you can help us figure out the way forward. Take this survey about subscription to The Nut Graph. Let us know what you think might work for you as a reader. Your feedback, like your support and criticisms, is valuable because it gives us a sense of whether we should keep doing what we’re doing or stop treading water and lie by the beach instead.

Truth is, some days, the beach beckons. But for now, there is 2010 to look forward to, no less because of the new learning opportunities ahead of us all at The Nut Graph.

Jacqueline Ann Surin believes that good journalism can only be humanly sustainable if it is also financially sustainable. With the challenges of 2009, she has yet to fulfil the 21-day no complaints resolution she made early in the year. She hopes to succeed in 2010.

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18 Responses to “The Nut Graph’s future”

  1. Colin Wong says:

    May I suggest that you consider the model of micro-charging. Do not charge a lot, maybe RM0.10 per read or something. Make it FEEL inexpensive (not cheap). We can convince ourselves that the content is worth a lot more but if the money is not streaming in, it is useless talk.

    I for one will pay upfront say RM10 using Visa, Paypal or Maybank2U and then burn off per visit at a very slow rate. It is a perception game… My views why people WON’T pay:

    – others are not charging, so there are always options (*SUBSTITUTE*)
    – for even RM0.30, I get a hardcopy of theSun! What do I get for online services? (*PERCEPTION*)
    – the tabloid is entertaining, and full of ads (yes, people WANT ads and we are always looking for ways to spend our money!). Yeah, TNG is a serious read but really, that’s the minority – what volume of traffic keeps you afloat? (*LIFESTYLE RELEVANCE)

    I would suggest the following:

    – go micro (above), or
    – go dual media, online news, weekly/fortnight/monthly digest (hardcopy? PDF?)
    – have more lifestyle-relevance

    The answer is out there. That is just my penny’s worth. Finally, some feedback on differentiation:

    – Malaysia Today = controversy, insider’s news, conspiracy theories (semi-fiction ;-)), RPK factor
    – Malaysian Insider = closest to a serious news daily, online version, immediate delivery of news, factual, neutral
    – Nut Graph = a bit “Off The Edge”-ish, not very current, analysis (but does not feel relevant sometimes)

    Hope that helps.

  2. KW Mak says:

    Having a reporter or marketing person assigned to writing articles for advertisers helps. When I was in The Star, the Metro section of the paper was partly devoted to such ventures and we even came up with innovative cross marketing / editorial promotions.

    While the concept may seem like selling out your journalistic integrity, I believe the write ups need not be so direct in promoting a product / service but done through related causes that corporations would be more than happy to be associated with.

    This is no different from the HSBC sponsorship that TNG managed to secure, except for the fact that you would have a full-time employee doing the work.

    Anyway, may TNG work out all the troubles it has and continue to grow and prosper.

  3. A says:

    RM5/month is the amount I will be willing to pay through mobile credit deduction. Meanwhile I would be giving a small donation soon.

  4. phtan10 says:

    If you want reader to subscribe, then price is the most important factor. I’m currently a Sin Chew Daily subscriber, at RM1.30 per day, that is around RM40 per month. So, the subscription rate should not exceed RM40 per month.

  5. Victor says:

    If I want news, I go to Star Online much as it is hated. If I want analyses, why should I come to The Nut Graph, much as it is loved? Profundity? Integrity? Please… You quote M’kini: squeezing water from a rock. The correct metaphor is “blood from a rock”. Gan is squeezing the wrong places, the wrong objects, and nobody likes to be squeezed. And you write about media online financial problems as if they started yesterday, not before The Nut Graph started. Now that you are in the thick of problems, you follow M’kini, bowl in hand, to organisations like Asia Foundation. Think again….

  6. Gurmit Singh says:

    I think that for medium wage earners as myself, a subscription of RM 10/month would be something that I (we) would be willing to fork out on a regular monthly basis. Though it is true that the value of your independent reporting is much more than that, factors such as other free available online news and availability of funds will make me to think twice if the charges are above that. However, I might not represent the majority who might be willing to pay much more (or lesser) that what I have stated.

  7. rcchia says:

    One suggestion:
    Make your archive available – have it catalogued by keywords, abstracts, title, etc – and charge a fee for accessing this information. Charge, say RM 1.50 – RM3.00 per article, and offer bulk discount, etc. Get subscribers to register, prepay and deduct from there. This is how NST’s eMedia works, where I still have some credit leftover with them. Not a core revenue earner, but hopefully the incremental revenue from the prepaid fee will attract researchers and people who need data, as one source of revenue stream.

  8. Ivan The Terrible says:

    Personally, I don’t subscribe to any subscription model as I believe in paying only for what I want, no matter how expensive and NOT paying for what I don’t want, no matter how cheap. If TNG wants me to pay, they would have to charge me by the article.

    The other issue is method of payment. I would gladly pay for EACH article if you can make it really EASY for me to pay. When I say easy, it means that I need to click only ONCE and I can access the article right away. When my Streamyx bill comes at the end of the month, I would expect to see the Streamyx bill plus the amount for paid content that I have accessed…just like like my mobile phone.

  9. KOKO says:

    You should create more conspiracies, hate news, and other reverse racism news; that surely will draw the readers. But then again, if you do that, that explains the “other” news portals’ objectives. Guess it’s all about the money, always about the money.

  10. victor says:

    Hi Jac,

    If you have surfed Wikipedia lately, you notice that they have a chart bar that indicates how much money they needed, and how much needed to be raised.

    I believe one of the concerns of donors is that they do not know how much their contribution is going to help keep the website going. So for example, if they donate RM 100 and it turned out that the actual amount needed by The Nut Graph is a million ringgit, then it would be a drop in the bucket and some will not bother to donate.

    If you follow the Wikipedia style, a bar chart showing how much money collected so far and how much more to go, it would really help the donors decide better.

    I am still wondering about how much funding The Nut Graph needs every year. If it is around the region of RM50,000, I believe some readers will be able to chip in to help hit the target quickly.


  11. Pratamad says:

    While TNG is currently ads-driven, I don’t see maximisation of its ads inventory at all. Most pages are empty of ads, and that’s a serious waste of capacity. At least get Google Ads (Adsense) up on TNG. (I am not sure how far that can help though as I don’t know your hit rates.)

  12. Pratamad says:

    Your survey system has indicated that it controls the participation by source IP address – one submission per IP address. I think this will reduce the participation tremendously because the Internet network nowadays relies heavily on network address translation (NAT), i.e. a single public IP address is shared by multiple users/subscribers. Many ISPs do this, many corporate networks use it.

  13. stellacheang says:

    I think for a start you can consider a link for generous readers to make payment in the form of donations to TNG. After reading the article above I feel deeply to make a donation so that TNG can keep going unfortunately I don’t seem to find where and how I can do it.

    Perhaps it should be made available in the “About Us” or”Our Policy” sites, or even consider a permanent sites / link. I will be happy to make a small donation (to be the best of my capability) if you could send the info to my email.

  14. I think it’s too early to make a decision on whether I want to subscribe. Of course I would if TNG needs to rely on subscription, but this would reduce public traffic immensely. Malaysiakini is news; TNG is analysis. Asking subscription for analysis can kill public attention entirely — it’d be like subscribing journals; something circulated only within an ‘in-club’.

    Could you at least try to see if the subscription model works by allowing archives to be accessible only by subscription? I hope TNG decides to review this much later next year, say around the middle of next year.

  15. Tim says:

    I like Colin Wong’s suggestion on micro-charging. His model sounds very much like a pre-paid. Pay upfront a specific amount and then get deducted per article read. That way, you pay only for the article you read.

  16. Alena says:

    I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


  17. Greg Lopez says:

    Charging a reasonable amount for online content is a good idea but it hardly works. There are very few online news models that are successful or sustainable.

    The bigger question is “What is the objective of TNG?”. If it is meant to influence Malaysians, then it should be provided free and I may add, promoted aggressively.

    I believe there are enough rich Malaysians that members of TNG know who can fork out the money to keep TNG going.

    All the best and Happy New Year.

  18. aiyomanaboleh says:

    I think your best bet is still via donations.

    Once you go on subscription basis, you may lose the donations.

    But anyway, the issue is if you go on a subscription basis, will you be saved?

    Let’s do some math here. Online traffic figures [multiplied] by comparable portal charges = revenue – expenses = red or black? Now add the advertising revenue and grants etc. In terms of % how much does subscription contribute?

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