Business models Interview Top stories

Hungarian startup Telex crowdfunded almost €1 million to launch, now it’s looking to sustainability

Months after Index was gutted, Telex rises up to take its place

It was probably one of the most talked about news events in Central Europe, and perhaps the most closely watched media exits in 2020 in Europe. After interventions from an investor with close ties to Hungarian Prime minister Viktor Orbán, almost the entire editorial staff of the hugely popular news site Index.hu chose to resign.

Shortly afterwards, the journalists and editors who left announced a new independent project is coming. Soon afterwards, Telex.hu was introduced. The founding team organized a crowdfunding campaign in September 2020 with more than 30-thousand supporters pitching in.

Now, four months later, we caught up with Veronika Munk, the current editor-in-chief and founder of Telex.hu to talk about the state of their news startup.

Editor’s note: The interview was conducted over emails; it has been edited and condensed

More from The Fix: Index.hu: the fort has fallen

What was the hardest thing in starting a completely new publication in 2020?

Well, everything was hard and new. I mean, we did not want to start a new outlet in the first place, but the Hungarian political and media environment did not allow us to continue our work at Index, our former workplace. 

The professional work we believed in was no longer possible due to external political impact on [our work at] Index – the opportunity for independent journalism became impossible. So we quit, more than 80 of us.

Me and my colleagues didn’t really think the whole thing through. We just jumped in. As soon as we finished our termination period, we started organizing Telex.

Perhaps the hardest part was that there were a couple of colleagues who, for one reason or another, could not join us at Telex.

Veronika Munk with her daughter while working. (Source: Huszti István / Telex)

At which point did you arrive at the idea “this thing should be backed by readers”? You must have had businesses and let’s say “good oligarchs” reaching out to help you.

The day we quit Index, thousands of people marched on the streets of Budapest, protesting for press freedom. 

Given the fact that Index.hu’s whole staff had resigned and the transformation of the well-known, 20 years old news site left a sizable void in the Hungarian public discourse – it seemed like Hungarians want credible news and are willing to pay for it. Right now, more people support free online press financially in Hungary than ever before. 

We saw a large proportion of society believe in us. Speaking from experience, we can safely say independence can only be achieved if we stand on our own legs, if we only have to depend on our team and our readers.

The majority shareholders of Telex’s publishing company will be the journalists and editors themselves. Our integrity will be the guarantee that the site will remain free and independent.

Anyone owned by a few big external investors and dependent on advertising revenue is vulnerable. Telex’s future investors must guarantee not to interfere.

The fact that so many people took a stand for this cause in such a short time proves Hungarians need fact-based, credible information – as there are fewer and fewer places where they can get it.

Space for independent outlets on the Hungarian media landscape is getting smaller and smaller, and this affects citizens’ freedoms as well. It hurts democracy, which is why we decided to draw up an ambitious plan and create a large, independent, free news site.

From the very first moment we wanted to be fully independent, so we knew we had to reach out to our own readers. They know what we can do, since our team wrote for Index over the last 20 years. I personally had been working at Index for the last 18 years – starting as an intern, and ending up as Deputy Editor-in-Chief.

It was a good idea. There has never been any other media project, with so many supporters as Telex has. Nobody ever launched an independent news site from the ground up with a staff this big before, relying only on reader support, in Hungary. Maybe in Europe? 

I guess the closest example would be Denník N in Slovakia, where 50+ staffers left and started a new publication from the ground up. You said “the newsroom” will be the majority shareholder of the Telex publishing company. Are you still working on this? Will you openly share your shareholder structure?

Telex is now published by an interim company that was rush-founded after last year’s tumultuous events. We are currently finalizing the structure and details of the permanent business entity that will publish Telex. This, indeed, will be majority-owned by the editors and journalists of the site.

The shareholders’ identity will, of course, be public. We committed to be 100% transparent in our financial dealings and already published our first public transparency report, detailing revenues, costs etc.

We will update the transparency report at least twice a year, so all our donors/ supporters/ users know how we’re doing and how we spend our money.

How did your thinking change now that you have to think about business, sustainability and the publication’s survival in a, let’s say almost hostile, environment that Orban’s government has created for independent media in Hungary? 

Some of the world’s biggest news media have the luxury of a level of management taking care of financials, managing editors sometimes get involved, but generally journalists and editors don’t have to think about business on a daily basis. 

On the other extreme the above-mentioned Denník N has gone so far as to show journalists how much money each article earns via converted subscribers. What is your approach? How much do you and your newsroom concern yourselves with the day-to-day business of news?

We have a small, but dedicated and effective business/ publishing team, and an equally small, but dedicated and effective advertising sales team (about 10 people altogether).

As with Denník N, a few former editors had to ‘cross over’ and start working on the company/ business side of things.

Which business model have you chosen? I understand it’s a reader revenue model, but is it something like The Guardian (everything is free, members get some extra features, but mostly they support independent news), or is it a different model?

Now all content is free on Telex and readers support our work through donations. 

Our operation costs us around 55 million Hungarian Forints (~ €150,000) per month. We started a donation campaign on September 4th – we collected around 1 million euros in a month.

Our transparency report has every detail regarding our costs and incomes.

By the way, in Hungary, it is unusual for a media company (or for that matter, any company) to present more detailed information on their financial situation and spending than what is mandatory.

But since our story is rather unusual as well, and the money we spend on Telex is from our supporters, it feels obvious that we must let our readers in on the details of our finances and our strategy.

We plan to switch to a subscription-based model in the long run, we are researching the best practices, working on our own content-sharing model (freemium or paywall or Guardian-style  – we do not know yet.)

How many backers/ members/ subscribers do you have at the moment? The last public number I have seen was after the crowdfunding campaign – 30,000 people. Can you share the structure, how many are contributing regularly (monthly/ yearly) vs. one-time supporters?

Now we have around 42,000 donors who ever contributed financially.

How do you engage your current donors? Do you send out newsletters or SMS messages or have you created a closed Facebook or Telegram group for them?

It’s newsletters, surveys and direct emails right now. Pandemic allowing, we’ll soon be expanding to other channels as well.

Telex.hu staff during the crowdfunding campaign. (Source: Facebook/Telex.hu)

When you worked for Index, it was the most visited news portal in the country with more than 1 million daily readers. Obviously, it took decades to get there. Do you plan to reach a similar scope with Telex, or is your focus more on targeted, specific audiences?

Telex is only 3 months old, but can already reach a large audience both on its webpage and on social media and with that it has a large impact on the Hungarian society.

According to statistical figures of the industry’s standard audit service, by DKT-Gemius, Telex has had around 390,000-620,000 readers per day on the Telex.hu site last November and December (the population of Hungary is about 9.7 million).

Our Facebook page has 394,000 followers, the Youtube channel more than 70,000 followers, and the Instagram account has 45,000 followers.

Do the attacks from the government continue? What do they look like?

No, we do not experience attacks, but we experience that the government often ignores our questions and existence. 

For instance, during the pandemic the Hungarian Government’s coronavirus task force has yet to answer a single question from Telex

Our photographers are not allowed in hospitals, and the paramedic services do not respond to us… In the middle of a pandemic, in Telex’s experience, the function of the media – of getting information to the public – is heavily hindered.

You also have an English section with the summary of the most important news of the day. Do you plan to be an authority on Hungarian politics and news also for international audiences?

Currently, there is only one journalist, Zoltán Kovács, who edits our English-language section, but we plan to develop this section to provide fact-based news and quality journalism from Hungary to the international audience.

Apart from the things you mentioned that you want to focus on in 2021, is there a trend you are looking at and want to try: editorial newsletters, podcasts and audio articles, news TikTok, data and interactive storytelling or something else?

We’re exploring a lot of opportunities but with the site less than 4 months old, we’re currently concentrating on core activities – so it’s a bit early to talk about next moves.

Having said that, our Android and iOS applications will definitely launch in a few weeks’ time.

Veronika Munk (*1979) is a Hungarian journalist and the first and current editor-in-chief of Telex.hu news portal. Before that, she was the deputy editor of Index.hu where she worked for 18 years. Veronika has a Ph.D. in Media Studies and has been teaching courses on journalism at Eotvos Lorand University. She is also a passionate basketball player. (Photo: Ajpek Orsi / Facebook)

Main Photo by Joseph Sun on Unsplash

[Editor’s note: The idea of the potential for pan-European remains hotly debated – including for The Fix, whose mission is covering the pan-European media market. Our upcoming webinar, part of a series of webinars around innovation in media, tech and business held February 22 to March 3, will focus on the prospects for a pan-European market. Learn more and sign up by going to the Media Revolutions page.]

%d bloggers like this: