So we reached 10 years of existence earlier this month. Growing older makes you pause and reflect. We are grateful to our highly opinionated audience for keeping us on our toes. This article by one of them reflects how high an expectation they have of us.
A number of times people ask us, “How do you guys make money?” It has always been our audience but now the way they finance our operations is getting more direct. Here is our exploration of business models over the years. As you go through this you will see why I titled this as a Techzim Contradiction:
Publishing has been supported by advertising revenue for decades upon decades and this is what is thought of as the most obvious revenue model if you are getting into this business. However, this long tradition is what caused the collapse and near collapse of some of the world’s biggest news organisations when the internet came along.
The internet makes essentially all information from all over the world accessible to anyone in any part of the world. This means that supply of information is near infinite. The laws of supply and demand dictate that if supply is infinite then price has to be zero. No wonder most information on the internet is accessible for free. This also means advertising inventory is almost infinite as well and that’s where things started collapsing for traditional media houses. Adverts on the internet have to be lowly priced to reflect that there is oversupply of inventory.
Techzim always had the advantage that it is a very niche focused publication. This has meant that our advert inventory has always been differentiated. Our rates have thus been a bit higher than average. You see, on the internet, oversupply also means noise for digital residents. Niches become powerful places where people of certain interests congregate to keep from the noise and they become loyal to those places. Such a community is more valuable to advertisers of course. Added to that advantage, Techzim launched as an internet business with internet assumptions therefore our cost structure was in no way similar to that of traditional publishers that were coming online.
Advertising has not always been a sweet story for Techzim. Zimbabwe is quite a small market and thus the players that advertise are basically the same few ones. This makes the advertising customer a powerful one somewhat and that’s not just on negotiating price. Over the years some clients have tried to influence our voice. Some even went further to stop advertising on our site because we did not give in to such influence.
Our insistence to what we consider to be our core principles (which you can explore in our statement of ethics) hurt us at times. In the long run though we believe this more than anything else has contributed to our longevity. Even with advertising clients: a good number of them have come to appreciate our position and we hardly get any funny offers or threats anymore. The constraint of a small advertising market still exists though.
Readers must pay
Global media brands are now pivoting to subscription business models for their digital businesses. This has been led by The New York Times which is arguably the most successful news brand in the world at subscription. This movement is being fueled by the growing concern by media consumers over the scourge of fake news. Although supply of content on the internet is infinite, consumers are starting to realise that news they can trust is a rare commodity worth their buck.
Over the years we have attempted building a subscription business of one form or the other. We have failed most of the times or partially succeeded which is just equal to failure. Does this mean subscription is impossible in Zimbabwe? No, hell no! More work has to go into product development and building this out will need patient capital but we believe it’s totally worth it. In our case too, we have a very good following from around the world because of the niche we cover and this is probably a good place to start for a Techzim subscription product that gives these followers who are usually leaders of commerce insights into Zim…
In our flirtations with subscription the question that has particularly been top of mind for me has been: “How can we make it possible to earn directly from each of our readers so that we are not too dependent on a few advertisers whose incentives may not be aligned with ours nor our readers?” In short, “How can our readers become in a more direct way, our customers?” We had always prioritised our readers above our advertisers so in my head it has always been clear that our readers were/are our customers and not the advertiser. The one you focus on is your customer.
Our readers becoming customers
To answer the question above, e-commerce lended itself as an interesting alternative business model. What if we actually sell some of the stuff we always talk about? Over the years, readers would call us, text us and email us asking about products they would have seen us review. In an indirect way the readers were already telling us that they were our customers except that we were always out of stock!
Our e-commerce is still in it’s infancy of course but we are (or at least I am) happy that finally we can genuinely call our readers our customers in every sense of the word. Some of our readers who have often asked us how they could contribute now have a way to do so. By buying even the most basic of commodities like airtime through Techzim they know they are contributing and we appreciate that quite much.
This is not to say the exploration into e-commerce is not without it’s own contradiction. We are now limited on the extent of coverage we can give to other e-commerce players. Our voice is no longer as neutral as it ought to be and thus when it comes to e-commerce we can’t give out much opinion. We may fool ourselves into believing we are criticising some other e-commerce player objectively yet subconsciously we will be pulling them down because we are now a player in the same space. So our deliberate position is to keep away from offering an opinion regarding e-commerce.
This is the complexity of business models. The whole object of this article has really been to use our own story as an example of how these things are hard to get right. Most of the times Techzim is in the privileged place of being the one to probe at others’ business models and talking about everyone else. This sometimes makes us forget just how difficult business can be and how none of us has it all figured out. Perhaps our objective as we start the next 10 years should be to become more humble?