Business models Top stories

Innovate or die: reader revenue revolution in Ukraine

How COVID-19 pushed the previously conservative Ukrainian market to introduce long-awaited solutions

“I know what you’re thinking. Ukrainians will never pay.” 

Speaking at a closed-door session for some of Ukraine’s top media managers held in the summer of 2019, the paywall expert proceeded to list out a series of countries – Poland, Slovakia, the Czech Republic, Lithuania (to name but a few) – where reader revenue was previously unthinkable, but then became a reality. 

The crowd listened with interest, but mostly remained unconvinced. There was no mad rush to grab up potentially paying subscribers and most of the media returned to business as usual, trying to make ends meet through a combination of advertising, grants and owner largesse.

Less than 12 months later the Ukrainian media scene could not look more different. At least a dozen titles have launched reader revenue initiatives, including Ukrayinska Pravda, the legacy market leader which celebrated its 20th anniversary in April. 

While two paywall projects – one by a national and one by a regional player – were a long time in the making, it would be foolish not to ascribe the market transformation to COVID-19 and the havoc the pandemic wreaked on the country’s advertising market.

Ukraine is an unlikely place for such a reader revolution. The country is both at the heart of a geopolitical tug-of-war and home to some of the continent’s most vicious politics (which have led to not one but two revolutions and occasional imprisonment of top officials). 

In such circumstances, media are often a tool, or “media resource” in local parlance, most widely wielded by oligarchs who fund unprofitable media organizations to push their agenda. 

To balance things out, some foreign donors or businesses have backed independent players in the hopes of leveling the playing field. These have long promoted efforts at sustainability, but despite years of trainings and conference panels on “monetization models”, there was little to show for it.

Until March 2020, that is, when Boris Davidenko, editor in chief of Liga.net, a site popular with the business community, announced that 30% payroll cuts wouldn’t suffice to keep the organization afloat. 

“Launching a paywall during an epidemic, when quality information can save lives, is not an option,” Davidenko wrote at the time. “That leaves oligarchic money, and that of the readers. We never considered the first (we have had far more oligarchic media than Ukraine can afford). That leaves you – 5-8 million people who read Liga.net every month.”

Over the coming months thousands donated, leading the media to set up a donor wall – featuring business stars, opinion leaders and even ministers.

Liga.net’s Donor Wall

Since then many have followed. One of the biggest NGOs, hromadske, launched a membership campaign that gathered over 1,500 donations, media startups Lustrum and Zaborona set up Patreon accounts, The Babel and The Village, and many others, all dove into membership models. 

These have come in all shapes and sizes. Some simply ask for money, while others include tiers with different benefits. The Ukrainians, a relative newcomer based out of the Western Ukrainian city of Lviv effectively used ambassadors to promote its membership. 

Ukraiyinska Pravda, whose “Club of Readers” sent shockwaves across the market when it went live in late-June (as one of the biggest players on the market, its entry into reader revenue made quite a few competing managers nervous about how much space would be left), built a personal cabinet for readers that allows them to save favourite stories.

Ukraiyinska Pravda‘s personal cabinet

To be sure there have been attempts at driving reader revenue in the past. Ukraine’s first paywall was launched by The Kyiv Post, the main English-language publication over 7 years ago, though much of the media regarded it as an exception – made possible by their international audience and its high willingness to pay. 

Popular website Novoe Vremya auspiciously launched a paywall in February 2020 (amid a fair deal of scepticism), following on the footsteps of regional player 20 Minutes, which is based in Central Ukraine. It has since attracted over 10,000 subscribers, according to chief editor Vitaly Sich, proving the validity of the model.

Novoe Vremya introduced paywall in late February

Yet the massive transformation taking place in the market since the arrival of COVID-19 is something different. The necessity to change has sparked a race for innovation and a whole new approach to readers. 

Writing an explanation of their readers club, Ukrayinska Pravda’s Sevgil Musaieva promised a new approach to audiences, writing that “the reader is longer just a consumer of information. Today is the time to enable our audience to generate ideas and meanings and to, some extent, become part of our team.”

The team at UP, as the website is known, promises to engage readers via different discussion platforms, and hinted on an open call for potential subscribers at a more elaborate model to be rolled out in coming months. Other media have also set lofty goals, confirming that membership is more than a passing fad.

Somewhat more worrying is the evident it also reflects on the herd mentality. Once one media does, everyone follows. Though the opportunity was clearly there for years, fear of failure or doing something different undoubtedly held back many entrepreneurial spirits – until a global pandemic finally set them free.

This raises the question of how much more innovation media are holding back, and what are the structural reasons that can be addressed. It also suggests that much of the substantial donor support, which has provided a valuable balance to oligarchic funding, has not been effectively channelled toward entrepreneurship, perhaps even stalling progress.

It is worth noting that both Novoe Vremya and 20 Minutes received monetization mentorship and, in the case of the latter, took part in a business accelerator program held by the Media Development Foundation – both uncommon types of support until fairly recently (though still niche, both forms have become more widespread over the past year).

More broadly, though, it should also be a lesson to other markets with players contemplating a similar shift. Be bold, be first, then expect to be copied.

Note: The author was the CEO of Kyiv Post in 2013-2014, serves on the board of MDF, and has worked in various capacities with many of the media mentioned in this article.

%d bloggers like this: