Indonesia’s number one 1 entertainment online media KapanLagi is one of Indonesia’s first movers in the online media industry. Founded by Steve Christian and Eka Wiharto, KapanLagi first started back in 2003 with just five people and a whole lot of dedication. More than one decade later, the company now houses over 200 people, creating about 500 articles a day across its five media brands.
While a lot of people would say that it is natural for KapanLagi to be where it stands right now thanks to its 10 years of hard work, a lot of people raised their eyebrows when the firm created a more general news site in the form of Merdeka, setting the company up for a battle with media giants like Kompas and Detik. In the one year since it launched, the Merdeka news site has eclipsed the original KapanLagi. We talked with KapanLagi CEO and co-founder Steve to get a better grasp on how the team managed to build two of Indonesia’s biggest media sites so far.
How KapanLagi monetizes
The answer on how the team manages to build two huge news sites in Indonesia is content, says Steve. The team also ensures they understand their readers’ behavior, such as what makes them tick, what interests them, and what kind of articles get reshared and go viral. Though Steve was reluctant to share his secret sauce about what these behaviors are and how they engage with their users, he was open to talk about how the company makes its money and its general strategy.
KapanLagi makes money mainly from three channels. First is advertising, which accounts for 80 percent of the company’s revenues. Second is by selling KapanLagi’s content – creative writing, video development, and newsletters – to brands like Unilever’s Clear.co.id, as well as Yahoo and Plasa MSN. It seems that KapanLagi’s content drives a lot of traffic to the latter two companies, so that even the likes of Yahoo and Plasa MSN want to pay to get content from KapanLagi. The third revenue channel is by selling KapanLagi technology (i.e.: back-end systems) to other companies.
KapanLagi’s demographics look similar to those of other mainstream online media. Most of the traffic comes from people aged between 18 to 24 years old, while the second biggest group is 25 to 34-year olds. Steve says that catering to the former age group is for the masses, while catering to the latter age group help creates credibility for the company. I think the logic is that the older demographic is seen as more intellectual folks with greater buying power. The sites’ ads will then be aimed according to each demographic group.
Steve recalls the time when they almost decided to declare themselves bankrupt in 2006 because they were bleeding a lot of money. But fortunately their sales momentum started to roll that year and since 2009 the company has recorded 100 percent growth in terms of sales every year. And yes, KapanLagi is now profitable.
Merdeka is born
10 years ago KapanLagi started as a general news site. But after seeing tough competition in that same segment, he decided that it would be wiser to focus on one area first – entertainment. Now that the company has dominated that segment in the country, last year it decided that it was time to go head to head against the general news media with Merdeka.
So how did Merdeka surpass KapanLagi and become one of Indonesia’s top six media sites in just 12 months? Steve explains there are two reasons. The first factor is from the type of readership itself, whereby KapanLagi is an entertainment portal, so its readers open the site whenever they have spare time. But Merdeka is a broader news site, whereby readers need to open and read it everyday to keep updated with national and world events. The second factor is that KapanLagi’s four media brands’ content – KapanLagi itself, female-oriented media Vemale, cars portal Otosia, and soccer news site Bola.net – are also published on Merdeka.
Merdeka’s readership originally came from KapanLagi’s traffic. Then slowly Merdeka grew its own readership who are different from KapanLagi’s. The same approach was also implemented by KapanLagi for its three other media brands. Bola.net started as a a sub-domain of KapanLagi and eventually became a standalone web portal. Vemale and Otosia also started the same way.
In order to complement Vemale, KapanLagi is about to roll out its male counterpart site next month. And just like how it started with the others, the new men’s site will be on KapanLagi’s subdomain Men.KapanLagi.com first.
KapanLagi aims for top spot
When asked about how the media company envisions itself in the coming years, Steve answers that they want to be Indonesia’s number one media company in two years’ time. When he showed me the ComScore analytics for media sites in Indonesia, KapanLagi is ranked fourth and Merdeka is in sixth position.
The current media leaders in Indonesia are Kompas and Detik, who put all their news categories into their one site. KapanLagi uses a different approach, preferring to launch vertical news sites on different domains. Interestingly, if you put together the statistics of all KapanLagi’s sites including Merdeka, it would already be Indonesia’s number one online media site in terms of reach.
So how big of a reach do KapanLagi’s sites have in Indonesia? You can see the monthly number below:
(Editing by Steven Millward and Paul Bischoff)