How Indonesia’s Katadata found its blue ocean
Sometimes the media entrepreneurial path is clear. Other times, knowing the path you don’t want to take is a better guide to building a news media business. By Jacqui Park and Christopher Warren
Sometimes start-ups know exactly what they want to do. And sometimes, knowing what you don’t want is better, providing guardrails that protect you along a path of trial and error to a model that works. That’s the story of Jakarta-based news media start-up Katadata.
The three founders knew one big thing: that they didn’t want to be a content factory, churning stories into click-bait in the chase for digital advertising. They’ve used that knowledge to guide their eight-year journey working out how to unleash the power of data both as a source of news and a tool for telling them as stories.
The secret is in the name: in Indonesian “kata” is the root for word or speech. And data means, well, data. As a company, Katadata works out how to make data speak to tell stories that matter.
Forging media solidarity on Covid-19 messaging
Right now in Indonesia — as around the world — that story is Covid19. To use the power of data to tell that story, Katadata CEO Metta Dharmasaputra persuaded the country’s notoriously fractious media to work together through an initiative called #MediaLawanCovid19 (Media against Covid19).
Bringing the country’s major media CEOs and editors-in-chief together in a WhatsApp chat group meant the media could coordinate public health messages about staying at home, or social distancing using the same messages, the same posters, the same video. It could not be a campaign that criticised the government — that would just split the media along traditional lines.
“Media have to work together to give a campaign to the people with all the information about Covid-19 beyond how many people are infected, or how many people died,” says Katadata co-founder Ade Wahyudi.
The business model
Before launching Katadata back in 2012, Ade had worked at independent radio KBR68H while Metta and Heri Susanto had both worked as journalists at Tempo, the famous pro-democracy media voice from the Suharto era. They recognised that the future of news was digital and they wanted to be part of it. They weren’t sure just what their media business would look like — but they knew what they didn’t want to be.
The three founders didn’t want to mimic what passed for digital news in Indonesia then: ad-supported, relying on building mass audiences by optimising clicks where the loser was quality journalism. But what was the business model that would avoid that trap?
They took inspiration from The Economist, and adapted it to meet the opportunities of 21st century Indonesia. With seed investment from Lin Che Wei, a prominent Jakarta-based financial analyst, and a staff of 10, they started with two channels: a quality news site focusing on business, politics and technology and a data-based research arm that could generate income to support the journalism side.
“Surprisingly, that’s worked. So we got the revenue from that to support the news activity,” says Ade. “Of course there is a potential conflict of interest so, even though we started small, we made a Chinese wall between the research and the newsroom.
“The newsroom focused on making quality content but the research arm has clients and is making custom research.”
The journalism site continues to focus on economics and business, both for people in the sector and for people who want to understand what’s happening in business. Their main site, Katadata.co.id is published in Indonesian. Earlier this year they launched a premium subscription service in English.
“We still want to strengthen our vision to build data journalism,” says Metta. “It’s hard because there’s not many journalists who know about coding or statistics. We’re building a team that can use data for stories. This is our vision but we still need time to build that.”
Finding that blue ocean
Relying on both journalism and research got them off the ground, but within two years they realised that growing organically could not save them from being run down by competitors.They were forced to ask themselves: What is our Blue Ocean? With a second round of investment from the not-for-profit Media Development Investment Fund (MDIF) and Lin Che Wei, they deepened the company’s technical skills and leveraged their research expertise to find their blue ocean in infographics — unique in Indonesia at the time.
The MDIF relationship also helped them develop better access to the business and technical skills they needed to grow their company, including identifying talent and helping with interviews. Katadata also relied on advice from their better-known neighbour, Malaysiakini.
With this infographic expertise — using their data to tell stories simply — Katadata was able to achieve a breakthrough. Corporations and governments came to them for help. Early on some of their infographics went viral, such as one in 2015 on 10 reasons to cut the fuel subsidy that was shared on Facebook by President Joko Widodo.
It became — and remains — their major source of revenue. Although other media companies have copied their model, Katadata continues to hold an edge in both price and quality.
A strong capability in research and technical skills around data gives them an edge over potential competitors, says Ade. “So that’s why we try to publish our own surveys, our own research so people can recognise us as not only a media company but also a data company.”
In 2016, a further investment from MDIF allowed Katadata to launch a subscriber-based platform: databoks. This platform allows subscribers to access the company’s data through preset parameters to produce their own graphs or tables to be used in their own presentations, communications and websites.
Too much of our income was dependent on one-off contracts, says Ade. The databoks provide a tool to better leverage their data and research into ongoing revenues, through a monetisation model to be launched this August.
Two years later they received funding led by East Ventures which allowed them to upgrade the platform and strengthen both their sales force and their journalism investment. They have also launched an events program which, under Covid-19, has pivoted to webinars using two models: one, their own journalism, funded by sponsorship and free to access and, two, a custom webinar for clients which may be closed, or may be open. They are starting a new premium webinar product which limits access to provide value, and for which they will charge an attendance fee.
Now the company has grown to about 137 staff and, this year, restructured itself across three divisions: the newsroom, the research arm and a client communications arm Sisi+, providing diversified income: about 60 percent comes from communications and infographics provided to clients through Sisi+, about 20 percent through the research arm and 10 percent each from events and from advertising on their news site.
They hope to see this diversified through their platform, premium subscriptions and webinars although, like all media their future is clouded by the shake-out of the Covid-19 pandemic.
Jacqui Park is a Senior Fellow at the Centre for Media Transition at the University of Technology, Sydney and advises the International Press Institute on membership and strategy.
Christopher Warren is a journalist who writes on media and technology for Crikey.
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