Late last year, JoongAng Ilbo launched Korea’s first attempt at a paid service in the form of a subscription for premium digital content, The JoongAng Plus. And while this may seem like a straightforward concept to media publishers in other parts of the world, Changhee Park, the CEO of the South Korea news publisher, explained why this is such a big deal in South Korea.
During the recent INMA Asia/Pacific News Media Summit, Park discussed how The JoongAng has utilised the lessons they’ve learned from INMA as they endeavour to overcome significant regional obstacles on their digital transformation journey.
Challenges: Korean market specifics
The JoongAng is one of Korea’s largest media groups and includes the leading Korean daily, a Sunday newspaper, an English-language daily, and a magazine — as well as one of Korea’s largest cable networks.
Park shared the uniquely difficult situation The JoongAng and other Korean news publishers are in due to the dominance of domestic portal sites. These sites, the most popular of which is Naver, are news aggregators that pull content from The JoongAng (as well as dozens of other sources) and serve it to readers for free. According to the Reuters Institute Digital Website News Report of 2023, Korea is the “single worst market in the world for news aggregation.”
The overwhelming majority of readers in Korea “access their news through third-party portal Web sites, not from us directly,” Park said. And, in some ways, he admitted, it makes sense for them to do so. Those portal sites can be personalised so a user gets a custom page on portal sites, and the algorithm feeds them news from multiple sources that’s relevant to their interests.
“From the consumer’s perspective,” he said, “this is the most efficient way to consume news. But for media outlets, it’s a terrible reality.”
Although Korean media organisations criticise sites like Naver for not adequately compensating them, Park said no single organisation seems willing to withdraw from the portal sites altogether. Instead, they end up fighting with one another for space on the site.
What this means for The JoongAng is that while they embark upon a digital transformation to “establish secure reader revenue and ensure sustainable growth,” they end up “in direct competition with a united front [on portal sites] that includes not only everybody else, but us as well.”
Learning from others
The JoongAng looks at examples of news publishers around the world who are successfully “generating meaningful revenue from readers,” like The New York Times, Park said.
Compared to The New York Times, advertising revenue at The JoongAng “remains hugely important for us, and that shows no signs of changing” since they don’t yet have a way to sustainably generate reader revenue, he said. And while looking at the gap between the two publications might “tempt us to make excuses,” Park said that, instead, they should focus on what they do well.
Four strategic questions
To achieve their revenue goals, he said, they need to “establish and execute an optimal strategy for reader revenue” tailored to the market’s unique issues, making “choices backed by INMA data.” The company took advantage of “numerous INMA case studies” to come up with four simple and fundamental questions, he said:
Question 1: Who are our customers and where are they located?
The JoongAng is offering the very first product of its kind in South Korea, which made some of the market research “depressingly easy,” Park said. “We’re starting from zero,” which means “there’s lots of opportunity, but also lots of challenges.”
One of the ways they’re trying to mitigate some of the risk is by “experimenting with expansion in the English-language products,” which helps “increase the potential target audience and attract more international readers.”
Question 2: What products can we offer them?
Unlike publishers such as The New York Times, “we can’t monetise solely on the strengths of our newsroom,” Park said. “The work of the newsroom itself can’t be the product because it’s already available for free on the portal sites.”
Instead, The JoongAng needs to create content that’s different from what goes into the portal sites, attracting customers to navigate away from the portal sites to their own products — which, again, is “literally competing with our own content.”
To do this, they’ve taken a two-pronged approach. The JoongAng’s premium model “contains two distinct types of content, targeting two audiences that we think can learn to see the value in paying for news,” Park said.
Legacy news readers (or “heavy users”). They are focusing on deep-dive articles and analysis with regular features as well as breaking news. This involves “leveraging existing newsroom resources to offer extra value to existing readers with a deep interest in the news.”
- Potential readers: They’re creating custom content for readers who are willing to pay for content on specific topics like parenting, finance, and real estate. These special products are geared to appeal especially to younger audiences, readers in their 30s and 40s.
Question 3: How do we measure customer satisfaction?
Thanks in large part to the fact that The JoongAng’s “international peers have been doing this for the last decade,” Park said “INMA has been an invaluable resource in approaching the data problem.”
In addition, a collaboration with Google has been helpful as they collect and analyse reader profiles and data.
Question 4: How do we organise ourselves to achieve this?
“When driving a digital revolution with your existing workforce,” Park said, “the most crucial thing is identifying exceptional talent and encouraging excellence.”
To help with this effort, the company provide incentives — The JoongAng Awards — to teams that excel in producing content that “meets specific performance criteria for our initial monetisation targets.”
This criteria also “serves as a basis for deciding what not to do,” he said. “We halt production of content that consistently falls below average with no significant improvement.”
Unsurprisingly, given the trailblazing nature of this work, other South Korean newspapers are closely watching The JoongAng’s progress, wondering if they will find the key to a “Korean survival model” that isn’t just “a future where only a few of the biggest or best-funded media companies survive.”
The market is clearly not an easy one, and Park said it remains uncertain whether The JoongAng’s strategies will work. And although “strategy alone can’t save a media company if the market is working against it,” he remains cautiously optimistic.
“The key [to survivability] is the ability to adapt. Market context matters, but we should still control our own destinies. Publishers who understand their customers know how best to sell to them, and to motivate employees to innovate around their needs. Those are the ones who have a chance at survival.”