Print media industry gung-ho about future
MUMBAI: The results of IRS 2017 published earlier this year brought cheer to the print industry. Going forward this year it is important that the industry work to break prevailing myths which include print is dying, circulation is not growing, and a lot of people read newspapers online.
The print media also needs to focus on cost control and cost-cutting. It is unlikely that cover prices will rise or that more copies will be put into circulation as that will increase losses. At the same time, the industry which is heavily reliant on advertising needs to go beyond only treating it as a piece of real estate when approaching advertisers. The print industry needs to provide customised advertising options and activation. The industry must also move selectively away from real estate pricing to value-based pricing.
These points were made at a session on the final day of FICCI Frames 2018 at the session ‘Past Perfect Future Tense? Catalyst And Pointers For the Print Industry’. The speakers were DDB Mudra group president N.P. Sathyamurthy, Jagran Prakashan CEO Sanjay Gupta, and Lokmat Media MD Devendra Darda.
Sathyamurthy noted that IRS data indicates that there is potential to make occasional, irregular readers more regular readers. There is a seven crore gap between people who read a newspaper yesterday versus people who read one three days ago. While magazine readership is growing only 4% of people surveyed read newspapers online.
The growth in print consumption is coming from all strata especially B, C, D, and E.
Gupta noted that comparing TV growth to print is like comparing Apples to Oranges. He said that the TV is growing because it provides entertainment while print is mainly about news and information.
He also noted that the rising cost of newsprint has made life difficult for print players as 70% of the cost goes to newsprint and the issue is whether monetisation can happen given that the cover price is low.
Darda noted that the Marathi print media segment has seen an overall degrowth due to a lot of competition. He also stated that the print market cannot sustain more than two to three players in any given market. The rest will have to settle for crumbs in terms of ad monies.
“There is no space for a top five in a market in a category. Only the top two will do well and the rest will have to fight over crumbs. The situation will get more severe going forward,” warned Darda.
While the ad share of print has gone down to 33% from 40%, the panelists were not worried about this as print’s revenue is growing. Darda noted that print is the oldest media form and it has seen other media come in and establish themselves they will each take their fair share. In absolute numbers, print will go up every year. The hope is that with IRS 2017 advertisers will go back to print and look at it more seriously.
Gupta is hopeful that print will see a resurgence in growth. The advantage of print, he explained, is that the advertiser gets exclusive eyeballs. When one reads a newspaper one is unlikely to be doing anything else. This is not the case with television where your mind can be elsewhere.
Sathyamurthy noted that print gives assurity of reach and a conversational point as the reader cannot do anything else while reading a newspaper.
According to the panellists, prin died in the West because the last mile delivery system hawkers were finished. Only five to 10% of newspapers are delivered at the door in the US. That is not the case in India where 98% people get newspapers delivered to their doorstep. As long as this keeps happening the print industry and newspapers will survive.
Gupta noted that though the GDP has grown the media spends in the country are still not on par with Asian counterparts. “I believe that if India’s GDP grows at 7-8% over 10 years the media spends will increase. Spends in print will also increase. I am not disturbed that TV is walking away with a lot of advertising dollars. I am sure that the applecart will be disturbed when players like Amazon start making in-roads in homes.”
When asked about the fact that cover prices in the country are abysmally low, he noted that it is more of a strategy question for publishers in terms of the cover that they decide upon. It depends on the territory that a publisher operates, the monopoly that they enjoy. “If I operate in 10 states in Hindi I will adopt a different strategy in each state. It depends on whether I am a new or an old entrant if my brand loyalty is phenomenal. Having said that newsprint prices have gone up. We have taken cognizance of this. We will hold our prices if others are doing that. Nobody is raising prices,” Gupta stated.
Darda noted that Audit Bureau of Circulation (ABC) is leading the initiative that print is growing and this is being pitched to all the agencies. Over the last 10 years, the number of copies circulated that are audited has grown in the industry. The cover price of all dailies was raised at this time. He added that growing both price and volume is very difficult. While volume growth has been achieved the cover price has gone up from Rs. 2.5 – Rs. 4.5 over the last five years which is a significant increase.
“Going forward I don’t expect cover prices to increase and it is not in our best economic interest to increase volume significantly. The more copies we print the more loss we incur. It is about striking the right balance of what the right circulation is,” Gupta stated.
He noted that subscription accounts for 20% of his revenues but advertising no doubt continues to be important and commands the lion’s share.
Darda noted the importance of events and communities that offer another revenue stream. Sakhi Manch, an initiative by Lokmat, is a community for the women which has 300,000 paid members in Maharashtra and Goa. There are other forums one of which one is Bal Vikas which has been a goldmine for marketers and planners. He said over the past seven years the company has gotten its act together on this front.
Gupta said that his company also has properties which are being pitched to advertisers as engagement with audiences can happen. But in percentage terms, it is not significant as of now.
Sathyamurthy noted that activation led initiatives are appreciated by clients. The print is a part of it. It is good for everybody and you can measure what worked and what did not. You can go to specific markets and learn from there. His agency works with multiple publications including Jagran. Eenadu, Mathrubhumi.
The question of digital was raised. Darda noted that the strategy is local and build around local languages, local communities, and local experiences. The aim is to build a large segment of local communities across the country. He sees digital being a complementary media. Indian media has the benefit of learning from the West and East and learning from the good things and mistakes. Having said that newspapers have more resources in terms of journalists on the ground compared to digital outlets. Nobody can come close to it.
Gupta noted that for his company digital is an extension of the newsroom. The newsroom has to be well versed in the handling of digital as a medium of dispensation of news. Most page views come from the homepage. The challenge for him is to be a multimedia newsroom. The resources have to be managed in an effective manner where you don’t overspend on trying to have a digital presence.