When Kompas introduced its “Smart City” initiative in 2015, the Indonesian vice president and two ministers participated in the opening ceremony. That’s because the news media company partnered with the government and various national organisations as it planned events and coverage around the idea of preparing the nation’s cities for continuing urbanisation.
As a result, Kompas has created a growing business focused on key national issues by leveraging the its credibility as an independent voice.
“This kind of new revenue model can bring in revenue from different sources because the government and [other organisations] want credible media to discuss local or national problems to increase awareness,” says Ignatius Hardanto Subagyo, the company’s business director.
With the idea of creating technologically driven, sustainable cities as Indonesia’s urban areas continue to grow, the Smart City initiative ranked 98 cities across the archipelago on a variety of criteria focused on economic, technological, and environmental issues. Kompas hosted events, provided coverage of each city in the newspaper throughout the spring and summer, and selected finalists in several categories based on size.
Kompas collaborated with the state-owned gas company PT Perusahaan Gas and the Bandung Institute of Technology (ITB) on the project. The data collection process for the index and the subsequent editorial coverage remained independent, but sponsors provided financial support for the initiative, the events, and the nearly 100 pages of newspaper content developed over the course of the project.
The main sponsor shares logo space with Kompas on the special pages of coverage in the newspaper and in event backdrops and promotional materials.
The Smart City initiative was first considered by Kompas in 2012, as executives were looking for “something we could contribute to the people of Indonesia on our 50th anniversary” in 2015, Subagyo says. Ongoing migration from rural areas to Indonesia’s cities was — and will continue to be — a critical issue for the nation, Vice President Jusuf Kalla said in introducing the programme. (By 2025, 57% of the country’s population will live in cities, according to World Bank data.)
“Therefore, the mayors in this country must work hard to ensure a good environment and provide a lot of employment opportunities. That can be measured by this index,” Kalla said.
After announcing the finalists in each category, ITB and local mayors continue to hold discussions about the implications, and Kompas plans to conduct another survey in 2017.
As a result of the partnership, the government has asked Kompas to create a similar index and coverage of Indonesia’s tourism destinations. Subagyo believes that both the government and major advertisers, such as telecom companies or IT providers, would be willing to sponsor such a project.
The national bank has also asked Kompas to create and moderate discussions on economic issues; the organisation’s events business now hosts an event almost every two weeks, Subagyo says.
The impact of such projects is approaching 5% of revenue, but Subagyo believes it could exceed 10% in the future as it grows. He says that the venture “can be considered as evidence that newspapers as media companies can act in two different roles — first as a business, and second with the kind of good content that we can become the fourth democratic pillar in our country.”
“It’s a new revenue stream we can create, based on the quality of our editorial content,” he says. “The opportunity is there.”
This is one of 14 case studies featured in INMA’s strategic report “Revenue Diversification Beyond Traditional Print and Digital,” released in December 2015.