Abstract
Introduction
Print Media Industry
Since 1780, the Indian print industry has worked at the dissemination of information. The Indian print industry has learnt from the detrimental impact that the Internet had on the foreign print industries. This has seen the rise of many specialty magazines and regional language newsletters in Rural India which have helped maintain the industry's market share. However, over a long term the print industry should look at integrating its services with multiple delivery platforms to generate productive and sustainable business models in the future.
In its own imitable way, the Internet has redefined the boundaries of every professional sector in the world and reshaped the way each of these industries work. The concern that this report aims to address is the anticipated outcome of the massive footprint which the internet has made on print media.
We can define print media (Business Dictionary, n.d., Definition, para. 1) as the “industry associated with the printing and distribution of news through newspapers and magazines”.
Indian print media finds its roots in the Bengal Gazette, which was started in the year 1780. Fast forward 230 years, and print media has become one of the largest industries in India, currently standing at Rs.161.8 billion, having grown at 13.3% in the last four years (PwC, 2009, p.51).
The revenue generated from advertising depends heavily on circulation volume, which is the second most important source of revenue, and is based on the number of copies sold and subscription rate charged. As circulation drops,
Internet as the Trigger
Despite significant start-up and fixed costs involved in the newspaper industry, once a newspaper establishes its brand, it can recover these costs aided by large circulation volumes.
However, over the last decade several large newspaper companies across US and Europe have melted down, primarily because they ignored the threat from growing Internet penetration. Several newspapers have shut down operations or are already looking for a buyer (refer Exhibit 6).
Although there is a debate raging in the Western world regarding the value proposition of the
outdated newspaper model, the Indian newspaper industry has been doing relatively well. Even then, the disparity in growth of
revenues through advertising and circulation is a worrying trend for the industry beginning from the years 2003-04, when the Internet gained prominence in India (refer Exhibit 7).
Ease of archiving and searching makes Internet a more attractive medium for retrieving information. Furthermore, online news sites also have the advantage of being able to show videos, giving the consumer a favoured
television-like experience. Also, adoption of the Internet has led to the creation of a new market for mobile devices (like Kindle) which can be used for instant access to breaking news and information, at your fingertips.
Internet has also transformed a one-to-many industry into a many-to-many industry as most of online media is interactive, and the consumer can also become a provider of information. For instance, writing comments and reviews on online news sites, or blogging for news channels like CNN-IBN.
Marginal, though increasing, internet penetration is one of the important reasons why the Indian newspaper industry has not yet come across stiff competition from this medium. As
of November 2008, there were 81 million internet users with a penetration rate of 7.1%
(http://www.internetworldstats.com) and 5.28 million broadband connections as of June 2009.
Akamai (2009) reported that India “has an average internet connection speed of just 895 Kbps compared with the global average of 1.5 Mbps” (as cited by CIOL, 2009). These numbers are relatively small when compared to the western world, but in a country where the
economy, income levels and middle class are growing fast, widespread broadband adoption seems inevitable.
As cited by The Viewspaper (2009), the Indian Readership Survey (IRS 2009) inferred that almost all of the English dailies are losing readership at a rate much faster than the rate of their growth. Many of them, including the biggies such as Times of India and HT, have reported a slump in readership as compared to the findings of IRS 2008, mainly attributed to free news available on the Internet.
On the other hand, a large number of regional newspapers have been expanding their circulation and geographical presence (Exhibits 8 and 9 reveal that regional publications are the leading newspapers and magazines of India).
The main reason for this ambivalence could possibly be explained by the fact that the language of the Internet in India is primarily English and hence the impact of internet on local language newspapers has been minimal.
There is an immediate urge to think that internet is a threat to the print media industry as it eats into readership, thereby making print media attract fewer advertisements and hence reduce profitability of the print media players and industry. The other perspective can be to look at the synergy that internet brings to the print The Ambivalent Picture
Print media and Internet: A source of strategic advantage
20
media. And it is this synergy that the pro-active players in the industry are looking to harness to gain a competitive advantage. The idea is to link your services with online medium by establishing strong websites. The synergy provides following advantages:
? These online versions of the newspaper and magazines can reach more readers, generate more talk, and lead to more hits.
? These websites can be used to generate revenues through advertisements, subscription fees, archival access charge, and Internet-related services, thereby covering at least the Web publishing costs.
? The website can be used as a promotional tool to create a better image, thereby attracting greater readership in a long run.
? The offering (newspapers and magazines) gets protected from competitors who have not yet forayed into online services. The website also prevents the customers, who want to shift to online medium for news,
from shifting to other online players.
If the operations can be aligned properly, this synergy can reap huge strategic advantage for the early movers. Hence, instead of competing with internet, print media industry might want to look at online services as an opportunity to expand and reach more people.
While the Internet triggered a drop in circulation and advertising revenues in the print media, the Indian print media has still managed to hold its own. The year 2007 saw an advertising revenue of around Rs. 9,300 crores, 18% growth compared to 2006 according to Indian Media Industry – Print and TV Grows, Internet sulks (2008, para. 5).The print media is the most open to attack by the Internet medium but it still continues to garner a large share of advertising spends.
Print Industry Response
This is largely due to lessons that the Indian print medium seems to have learnt by looking at the issues raised by the entry of the Internet medium in various overseas markets like UK and U.S.A. There has been a shift of the print media towards tabloids and regional newspapers. This model is further helped by natural factors such as the existence of multiple regional languages leading to a consumer's ease of obtaining local information in the language he is most comfortable in.
Another lesson that the Indian print media seems to have gained from looking at their counterparts in the foreign industry is the importance of the 'niche' magazines. Recent times have seen the launch of quite a few such magazines, specific to segments such as News, Fashion, Travel and Health, etc. Some of the popular foreign magazines that have been successfully launched recently are Forbes, Inc., Entrepreneur, Stuff (India's version of Stuff, UK), Lex WITNESS- first Magazine on Legal and Corporate affairs, Feature and current affairs weekly magazine- Open, Seed Today, Sports Illustrated India, Harper's Bazaar, Food and Nightlife. In fact 60 new magazines have been launched in the last 12 months in spite of the recent recession causing the revenues to drop by almost 30% in 1 year. Media Monday: 60 new Magazines launched in India in past 12 months (2009, para. 2).
The Indian media laws have aided this trend by making the specialty magazine segment attractive to foreign publishers. Currently, Indian media laws restrict foreign equity to only 26% in the news segment, but allow full 100%
foreign equity in other specialty magazines of other segments. Indian Media Industry – Print and TV Grows, Internet sulks (2008, para. 7).
One lesson the Indian print industry has not yet learnt is that of pricing. The Indian print industry, like its foreign counterparts, has been consistently increasing the price of advertising.
While, this appears to be a faster way to improve advertising revenues, it has to be kept in mind that online advertising reaches a lot more people for longer periods of time at a lesser price.
Therefore, constant hikes in advertising prices will only cause the print industry's major revenue
sources to move away towards the online medium.
The print media industry is facing a structural challenge. In metros, the paid titles have seen a long-term decline in circulation volume. These trends are forecast to continue as the reach of internet expands. Comparing past trends in the industry with projected trends (Exhibits 10 and 11), it can be seen that a slower growth of the Indian print industry is anticipated for the coming years. The industry needs to successfully address these challenges and make use of the tremendous opportunities that India as a country (due to its size and growth) presents.
The future, in short term, may lead to entry of regional players to cater to the un-served rural population. In the long run, though, as the profitability reduces due to competition arising by substitutes (digitization), the industry may see consolidation and diversification by big players as a strategic response to the challenges. The revenues for India's newspaper market are generated from advertising and circulation and this business model would continue at least for the next decade. With more demanding customers, the focus of the industry will shift to provide better content, optimize distribution and cost reduction by shifting to newer technologies.
India is said to live in its villages with nearly 75%
of the population being concentrated in rural areas. Literacy rates are growing at a rapid rate in the rural areas. Internet adoption in the rural and semi-urban areas would be gradual. Thus Rural Industry Evolution: The Next Decade
The Way Ahead
India provides a huge potential for the print industry.
Another possible revenue model would be to increase the cover prices of the magazines and thereby increase the share of revenue from subscriptions. This would also ensure that the print industry's dependence on advertising revenues for survival will reduce.
With advancement of technology, much of the industry's activities can be mechanized. There are also better monitoring and tracking capabilities. Therefore, costs can be reduced substantially. Industry players who can come up with effective and innovative cost reduction
measures will have a significant business advantage. Also, India is known for its “English”
resource. The Indian print industry should look to leverage this natural advantage that it has by looking into outsourcing opportunities be it in business processing or in content writing.
This will ensure cost reduction for foreign publishers while serving as a revenue source for Indian publishers and also increase their resource utilization.
Finally, the print industry should look to embrace technology rather than compete against it. It should look into diversifying into multiple platforms to ensure that they have access to customers at both ends of the spectrum, i.e., technology savvy to the technologically challenged, Urban India to Rural India, Youth to Mature. As a long term strategy this will ensure that the print industry has integrated itself across different delivery platforms thus blurring the line between the print and online medium. Magazine brands that can provide access to customers across both mediums will attract more advertisers.
Aviral Jain is a PGP2 student at IIM Ahmedabad and can be reached at [email protected]
About the Authors
22
Ajay Sampathis a second year PGP student at IIM A h m e d a b a d a n d c a n b e r e a c h e d a t
Shantanu Shekhar is a second year PGP student at IIM Ahmedabad and can be reached at [email protected]
Srikanteaswaran T K is a second year PGP student at IIM Ahmedabad and can be reached at [email protected]
1. Business Dictionary. (n.d.) Retrieved January 15, 2010, from
http://www.businessdictionary.
com/definition/print-media.html 2. CIOL News. (March 03, 2007). Readers
prefer online newspapers – Study.
Retrieved on January 15, 2010, from http://www.ciol.com/content
/news/2007/107030304.asp
3. CIOL News. (October 16, 2009). India ranked #107 for average connections speed. Retrieved on January 15, 2010, from References
http://www.ciol.com /Technology/News-
Reports/India-ranked-107-for-avg-connections-speed/161009126443 /0/
4. Indian Media Industry – Print and TV Grows, Internet sulks. (June 17, 2008).
Retrieved January 15, 2010, from
http://www.pluggd.in/india-
business/indian-advertising-media- industry-print-and-tv-grows-internet-sulks-1742/
5. India Today. (November 5, 2009).
Magazines bucked recession: Pride.
Retrieved January 15, 2010, from http://indiatoday.intoday.in
/site/Story/69490/LATEST/20NEWS/
Magazines+bucked+recession:+Purie.html 6. Media Monday: 60 new Magazines
launched in India in past 12 months.
(November 9 2009).
7. PricewaterhouseCoopers. (2009). Indian Entertainment and Media Outlook, 2009.
8. The Viewspaper. (December 12, 2009). Is Indian Newspaper Industry flourishing or floundering?
Exhibits
Exhibit 1: Newspaper circulation in India in the last three decades
a b c
Newspaper Circulation Languages
No. of titles No. of copies No.
1976 13 320 34 075 000 68
1986 23 616 64 051 000 92
1996 42 388 89 434 000 100
2006d 62 483 180 728 611 123
Notes : a Newspapers are printed (including cyclostyled) period works containing public news or comments on public news, as at 32 Match. Their periodicity can be daily, tri and bi-weekly, weekly, fortnightly, monthly and other.
b. Circulation is average number of copies sold and distributed free per publishing day. The circulation numbers may be understimates because not all newspapers submit their repor ts by due dates.
c. Includes English, main languages recognised in the Constitution of Republic India and other languages and dialects of India.
d. The year ending 31 March. Other years are calendar years.
Source : Registrar of Newspapers for India (2007)
List of Dailies Claiming more than One Lakh Circulation in India (2005-2006)
Ananda Bazar Patrika Bengali Kolkata 1234122
The Hindu* (P F12 DPP) English Chennai 1168042
Hindustan Times English Delhi 113664
The Times of India English Delhi 1102521
The Times of India English Mumbai 626568
Gujarat Samachar Gujarati Ahmedabad 561402
Divya Bhaskar Gujarati Ahmedabad 553164
Punjab Kesri Daily Hindi Jalandhar 519684
Mumbai Mirror English Mumbai 512374
Dainik Jagran Hindi Delhi 493748
Hindustan Times Hindi Patna 468186
The Telegraph English Kolkata 418813
Bartaman Bengali Kolkata 408759
Bhaskar Dainik Hindi Jaipur 407144
Sakal Marathi Pune 358158
Malayala Manorama Bilingual Kottayam 352659
Navbharat Times Hindi Delhi 340740
Title Languages City Circulation
Exhibit 4: A list of dailies with over one lakh circulation in India
Exhibit 2 : Growth of Indian Print Media Industry (newspapers and magazines) 2004-2008 In Rs. billion
2004-08
Newspaper Publishing 86.5 94.6 112.1 131.5 140.7 12.9%
%Change 9.4% 18.5% 17.3% 7.0%
Magazine Publishing 11.8 13.5 16.6 19.0 21.0 15.7%
%Change 14.5# 23.0% 14.9% 10.6%
Total 98.3 108.1 128.7 150.5 161.8 13.3%
%Change 10.0% 19.1% 17.0% 7.5%
2004 2005 2006 2007 2008 CAGR
Exhibit 3: Growth of Indian Print Media Industry (advertising and circulation) 2004-2008 In Rs. billion
2004-08
Print Industry Advertising 54.4 62.7 78.0 94.0 103.5 17.4%
% Change 15.3% 24.4% 20.5% 10.1%
Print Industry Circulation 43.9 45.4 50.7 56.5 58.3 7.4%
% Change 3.4% 11.7% 11.5% 3.1%
Total 98.3 108.1 128.7 150.5 161.8 13.3%
% Change 10.0% 19.1% 17.0% 7.5%
2004 2005 2006 2007 2008 CAGR
Source(for Exhibit 2 and 3): PricewaterhouseCoopers. (2009, p.51). Indian Entertainment and Media Outlook, 2009. Retrieved January 15, 2010, from http://www.pwc.com/en_IN/in/assets/pdfs/PwC-Indian-Entertainment-and-Media-Outlook-2009.pdf
AUDIRE - IIM ABC CONSULTING REVIEW 24
Sandesh Gujarati Ahmedabad 335593
Times of India English Bangalore 328346
Punjab Kesri Hindi Delhi 328124
Deccan Chronicle English Secunderabad 324570
Ajit Punjabi Jalandhar 320245
Sangbad Pratidin Bengali Kolkata 294815
Maharashtra Times Marathi Mumbai 280446
Pudhari Daliy Marathi Kolhapur 274838
Jag Bani Punjabi Jalandhar 268825
The Tribune English Ambala 265794
Jagran Dainik Hindi Patna 265609
Jagran Dainik Hindi Kanpur 263592
Eenadu Telugu Hyderabad 254911
Gujarat Vaibhav Hindi Ahmedabad 251670
Deccan Chronicle English Chennai 246275
Mumbai Chaufer Marathi Mumbai 245139
Prajavani Kannada Bangalore 244681
Bhaskar Dainik Hindi Indore 242609
The Thanthi Daily Tamil Chennai 238954
DNA (Daliy News Analysis) English Mumbai 236678
Rajasthan Patrika Hindi Jaipur 227017
Lokmat Dainik Marathi Mumbai 223082
Hindustan Times Hindi Delhi 219601
Samaj Oriya Sambalpur 218969
Jagran Dainik Hindi Varanasi 218729
Bhaskar Dainik Hindi Bhopal 215908
Loksatta Marathi Mumbai 215005
Malayala Manorama Malayalam Ernakulam 210621
Gujarat Samachar Gujarati Mumbai 206484
Jagran Dainik Hindi Lucknow 202415
Vijaya Karnataka Kannada Bangalore 202371
Aaj Hindi Varanasi 201898
Navakal Marathi Mumbai 198367
State Times English Jammu 198292
Jagran Dainik Hindi Meerut 193418
Divya Bhaskar Gujarati Vadodara 193213
Times of India English Pune 188155
Divya Bhaskar Gujarati Surat 185773
Gujarat Samachar Gujarati Surat 185717
Ganashakti Bengali Kolkata 185634
The Aj Hindi Kanpur 183071
Dharitri Oriya Puri 176925
Jagran Dainik Hindi Jalandhar 176223
The Statesman English Kolkata 172366
Kashmir Times English Jammu 172183
Gujarat Samachar Gujarati Rajkot 166128
Sandesh Gujarati Surat 166078
Rajasthan Patrika Hindi Jodhpur 161288
Udayavani Kannada Manipal 159626
Sandhyanand Marathi Pune 158907
Lokmat Marathi Nagpur 158680
Jagran Dainik Hindi Agra 158450
Amar Ujala Hindi Delhi 157893
Nava Bharat Hindi Raipur 156946
Economic Times English Delhi 156446
Bhaskar Dainik Hindi Raipur 155141
Navbharat Times Hindi Mumbai 154919
Amar Ujala Hindi Meerut 154004
Samaya Oriya Bhubaneshwar 153335
Lokmat Marathi Pune 153289
Gujarat Samachar Gujarati Baroda 152798
Mid Day English Mumbai 152603
Herald Young Leader Hindi Ahmedabad 151200
Hindustan Hindi Ranchi 150025
The Times of India English Ahmedabad 149998
Hindustan (Dainik) Hindi Lucknow 147388
Times of India English Hyderabad 146487
Pragativadi Oriya Cuttack 145629
Mathrubhumi Malayalam Ernakulam 145058
Mahanagar Sandhya Ishaan Hindi Ghaziabad 145000
Samachar Jagat Hindi Jaipur 144862
Bhaskar Dainik Hindi Panipat 144458
Malayala Manorama Malayalam Thiruvananthapuram 144033
Sandesh (Baroda Edition) Gujarati Baroda 142943
Prabhat Khabar Hindi Ranchi 139454
Tarun Bharat Marathi Belgaum 139034
AUDIRE - IIM ABC CONSULTING REVIEW 26
Telugu Jaatiya Dina Patrika Vaartha Telugu Hyderabad 137621
Mathrubhumi Malayalam Thrissur 137606
Herald Young Leader Hindi Mehsana 136125
Deccan Chronicle English Bangalore 136048
Sandesh Gujarati Rajkot 135892
Uttar Banga Sambad Bengali Darjeeling 135354
Raj Express Hindi Bhopal 135142
Aaj Hindi Patna 135126
Malayala Manorama Malayalam Trichur 133526
Herald Young Leader Hindi Surat 133000
Jagran Dainik Hindi Ranchi 131190
Economic Times English Mumbai 130814
Hindustan Times English Mumbai 130751
Bhairao Times Marathi Ratnagiri 130349
Mathrubhoomi Malayalam Kozhikode 128687
Eswar Oriya Bhubaneshwar 128000
Lokmat (Dainik) Marathi Thane 127864
Bhaskar Dainik Hindi Jodhpur 127852
Jagran Dainik Hindi Dehradun 127310
Matru Bhasa Oriya Cuttack 127222
Bhaskar Dainik Hindi Chandigarh 126131
Mathrubhumi Malayalam Thiruvananthapuram 124467
Mathrubhumi Malayalam Calicut 122502
Mathrubhumi Malayalam Kottayam 122380
Malayala Manorama Malayalam Kollam 122055
Aaj Kall Bengali Kolkata 121340
Nav Jyoti Hindi Ajmer 119255
Sakal Marathi Kolhapur 118870
Amar Ujala Hindi Kanpur 118867
Bhaskar Dainik Hindi Hissar 118177
Ratnagiri Times Marathi Ratnagiri 117863
Siraj Malayalam Kozhikode 115808
The Hindu Business Line * (PF 13 DPP) English Chennai 115249
Malayala Manorama Malayalam Calicut 114926
Rashtra Doot Hindi Jaipur 113608
Ajit Samachar Hindi Jalandhar 113545
Sanmarg Hindi Kolkata 113318
Nyayadheesh Hindi Allahabad 112802
Jagran Dainik Hindi Gorakhpur 112720
Sandhya Kal Marathi Mumbai 112673
Vijay Times English Bangalore 109897
Anupam Bharat Oriya Chhatarpur 108200
Pratahkal Hindi Mumbai 107948
Yeshobhumi Hindi Dharavi 107855
Dina Malar Tamil Chennai 106342
Nava Bharat Hindi Nagpur 106149
Prajatantra Oriya Cuttack 105959
Nav Jyoti Hindi Kota 105630
Sambad Kalika Oriya Bhubaneshwar 105005
Mahka Bharat Hindi Jaipur 104825
Jagran Hindi Bareilly 104713
Mangalam Malayalam Kottayam 104589
Nava Bharat Hindi Mumbai 104523
Kholadwar Oriya Phulbana 103858
Jaipur Mahanagar Times Hindi Jaipur 102841
Pratan Kaal Hindi Udaipur 102683
Amar Ujala Hindi Dehradun 102277
Utkal Mail Oriya Rourkela 102181
Vir Arjun Daily Hindi Delhi 101514
Rajasthan Patrika Hindi Udaipur 101440
Bhaskar Dainik Hindi Jabalpur 101137
Samyuktra Karnatak Kannada Hubli 100721
Malayala Manorama Malayalam Palakkad 100569
Source: Ministry of Information and Broadcasting, Govt. of India. (10388) (As retrieved via access on 15 January 2010, from http://www.indiastat.com)
Exhibit 5: Circulation of Newspapers in India
Centre of Publication
Centre-wise Circulation of Newspapers in India (2000 and 2002-2003 to 2006-2007)
2000
Metropolitan Cities 219 14042175 298 11197123 685 16134142 1202 41373440
State Capital 264 9013830 425 6428026 235 2414915 924 17856771
Dailies, Tri & Weeklies Others Total Bi-weeklies
No. Circulation No. Circulation No. Circulation No. Circulation
AUDIRE - IIM ABC CONSULTING REVIEW 28
Union Territory 17 912776 15 163664 30 88752 62 1165192
Big Cities 950 33973098 1553 18691482 974 10713310 3477 63377890
Small Towns 73 1971448 96 802700 81 416322 250 3190470
Total 1523 59913327 2387 37282995 2005 29767441 5915 126963763
2002-03
Big Cities 1249 42215878 1894 19360296 1133 10343676 4276 71919850 Metropolitan Cities 223 14443053 317 12976639 825 13759903 1365 41179595 State Capital 417 15748776 544 8304807 394 3227576 1355 27281159 Small Towns 13 156542 38 123673 15 73191 66 353406
Union Territory 29 922099 15 213824 50 135610 94 1271533
Total 1931 73486348 2808 40979239 2417 27539956 7156 142005543 2003-04
Big City 1102 42172219 1295 14759096 735 7852564 3132 64783879 Metropolitan City 232 15290835 303 11839374 652 13022432 1187 40152641 State Capital 379 16027227 477 7680788 316 2866423 1172 26574438
Smaller Towns 17 406873 25 172538 13 37917 55 617328
Union Territory 19 816733 8 90297 18 52272 45 959302
Total 1749 74713887 2108 34542093 1734 23831608 5591 133087588 2004-05
Big City 1109 42394632 1568 17800537 1181 12120195 3858 72315364 Metropolitan City 276 17238364 373 14490343 986 16657320 1635 48386027 State Capital 429 17788021 639 9380897 495 6170937 1563 33339855
Smaller Towns 38 922416 37 364836 38 287509 113 1574761
Union Territory 22 899706 10 127381 24 76115 56 1103202
Total 1874 79243139 2627 42163994 2724 35312076 7225 156719209 2005-06
Big City 1321 49062792 2102 22883548 1395 14862184 4818 86808524 Metropolitan City 314 20186375 432 15876088 974 20770766 1720 56833229 State Capital 479 18609320 842 11363987 492 4885796 1813 34859103
Smaller Towns 30 674164 41 270374 43 173882 114 1118420
Union Territory 25 896595 11 186651 11 36089 47 1119335 Total 2169 89429246 3428 50580648 2915 40728717 8512 180738611 2006-07
Big City 1402 53208873 1796 22720476 1403 15388215 4601 91317564 Metropolitan City 350 20873206 478 16645455 1087 18926407 1915 56445068 State Capital 568 23217786 872 12096657 554 5923416 1994 41237859
Smaller Towns 29 1023472 53 419814 37 152906 119 1596192
Smaller Towns 29 1023472 53 419814 37 152906 119 1596192