Are digital news providers experiencing a decline in mobile traffic?

Digital news publishers in India may have lost 20-40% of their mobile traffic in recent months due to a variety of factors, even if AI-enabled chatbots have yet to gain traction.

The fall in referral traffic to news websites is attributed to a dip in mobile phone sales, a drop in data usage, slowed internet growth, and a drop in news consumption.

"Several large publishers have lost 20% to 40% of mobile traffic in the last few months. One possible explanation for this dip is a 10% drop in smartphone shipments in 2022. Also, the number of internet and broadband users in India is not expanding," the head of a digital newspaper told e4m, seeking anonymity.

"The reduction has been severe in the last two months," claims the head of a Hindi news station.

Listed media outlets are unwilling to go on the record.

"They don't want to discuss it publicly because they need to demonstrate investors that their digital platforms are performing well," a regional publisher alleged. Despite many requests, the Digital News Publishers Association (DNPA) did not respond to questions about this.

This is a double blow for many media outlets, particularly newspapers, which lost a significant portion of their ad revenue during the epidemic and have yet to recover to pre-Covid levels. The introduction of AI-chatbots by Microsoft and Google is likely to reduce referral traffic routed to them 

Mobile contributes for 70 to 90 percent of visits to news websites, depending on the publisher. According to industry experts, their percentage of ad revenue is almost the same, while desktop traffic generates somewhat more cash.

"The desktop's ad income share is normally 5% more than the mobile phone," stated a senior official. Hence, if a publisher's desktop receives 30% of visitors, it will receive around 35% of revenue."

While news websites do receive direct traffic from dedicated readers, the majority of it is generated by Google Search. In FY22, Google alone earned Rs 25,000 crore in ad income in India, a portion of which was shared with digital publishers.

Inflation

According to the International Data Corporation's (IDC) Global Quarterly Mobile Phone Tracker, the India smartphone market would fall by 10% in 2022 to 144 million units. This is the lowest figure since 2019, with a 10% year-on-year decrease (year-over-year).

Shipments fell 27% year on year to 30 million units in the fourth quarter. The diminishing demand is being blamed on a steep increase in the cost of mobile phones due to inflation.

"In 2022, the ASP (average selling price) reached a new high of US$224, growing 18% year on year. The entry-level sector (under $150) now accounts for 46% of the market, down from 54% a year earlier. "The lack of fresh launches in this critical mass sector acted as a barrier for new smartphone users, limiting overall market growth," said Upasana Joshi, Research Manager, Client Devices, IDC India, in a statement.

"Although the low income group is unable to buy smartphones owing to inflation and economic restrictions, those who have the phones are not consuming material the manner they used to during the epidemic as companies and schools are now open," a TV channel executive stated.

The rise of the internet appears to have stagnated in India, which has the world's second largest mobile phone market. The country's telecom regulator, TRAI, estimated 790 million wireless broadband subscribers in October 2022. That was only around a million more subscribers than it had in August 2021. Mobile internet user growth has recently slowed to 4% from double digits between 2016 and 2020.

The result is that the number of people using broadband has remained stable for the past two years. According to Comscore data, the number of people using it for social media, video, or entertainment has plateaued at around 485 million.

Consumption of news has increased

The news industry is under strain as news consumption declines. "Cases of heinous crimes and hatred dominate current debate. Most mobile consumers are tired of such content and have stopped visiting news websites, resulting in a 30% drop in mobile traffic to news websites."

"News is now less important than entertainment and social media," another channel executive said. Also, the growth of OTT and gaming app use has surged in recent years, resulting in more walled garden surfing and thereby affecting news site web traffic."

According to a senior executive of a major media organization, the availability of Google Search in regional languages has also impacted traffic to big English and Hindi news outlets.

Regional effort to reduce losses?

Leading publishers such as HT and Indian Express have begun launching language variants of their news websites in order to broaden their reach among mobile-first customers in regional markets, according to an industry leader.

In 2022, HT Media Group will establish four digital news platforms: HT Bangla, HT Marathi, HT Kannada, HT Tamil, and HT Telugu. Last year, the Indian Express Group also launched regional language websites in Gujarati, Bangla, Malayalam, and Tamil.