Malaysia - many popular news sites are still struggling to stay in the black..

By TEO CHENG WEE
The Straits Times
Singapore, Friday 26 August 2010

Online journalism may be booming in Malaysia, drawing many readers from traditional print media, but staying profitable is another story altogether.

With intense competition and business models that are still being worked out, many popular news sites are still struggling to stay in the black.

Recently, one of Malaysia's top news websites became the first major casualty.

The Nut Graph, which was launched with much fanfare in 2008, has said it is scaling down operations at the end of this month and retrenching staff. Making an announcement last month, editor Jacqueline Ann Surin cited financial difficulties to explain its move.

Starting next month, The Nut Graph will publish only once a week instead of five times, and focus mostly on columns and commentaries from contributors, rather than news or features.

The Nut Graph's financial struggles have been no secret. Launched with a start-up cost of RM2 million, the website has not turned in a profit, and with funds running low, even had to seek public donations to keep going.

"The expectation of online journalism is that it needs to be super-fast with a high turnover of stories. In order to do that, you need a fairly large team which costs more money," said Surin, a former journalist with local dailies The Star and The Sun.

The Nut Graph business model, she said, was simply not sustainable.

A similar story can be heard at some of the other news websites.

Top news website Malaysiakini, for instance, is the oldest and only website that charges subscription. Even then, the 10-year-old site is making only a small profit, said its editor Steven Gan.

Similarly, the chief executive of The Malaysian Insider, another well-read site, said earlier this week that it was still in the red. Internet advertising, he said, covers only half its costs.

Still, such financial challenges have not stopped newcomers like Malaysian Mirror, Free Malaysia Today and Malaysian Digest from joining the fray in the past year.

News websites have surged in popularity here in the past two years, in the wake of the 2008 general election, as Malaysians flocked online for what they felt was more independent news, at the same time shunning mainstream newspapers which many felt were overly pro-government.

But analysts say that in an increasingly crowded cyberspace, packed with stories of varying quality, more has not proven to be better.

Political analyst Farish Noor noted that there has been a tendency for news websites to overlap and cover the same news, resulting in a 'somewhat shallow consensus of opinion'.

There is also frequent speculation that some websites have hidden political backers, which would explain the ability to absorb financial losses in exchange for online influence.

"After the last general election, people realized that the Internet is a powerful medium. It is possible that politicians and business tycoons will pay for a stake in online media," Gan said.

While some of these news websites have sometimes been criticized for running stories with clear slants, he felt it was up to readers 'to decide how much weight they can put on them and what to believe in'.

Both Gan and Farish see the scaling down of The Nut Graph, which has built up a credible reputation, as a blow to online journalism in Malaysia.

More websites are likely to come up to take its place, but Farish believes that those with agendas will not be able to hoodwink readers for long.

"The public can see through any slant, and that only robs these organizations, and the journalists who work for them, of their credibility," he said.

(Source)