industry analysis of print mediaDocument Transcript
2. Product lines and consumer behavior
3. Growth of the industry
4. Technology of production and distribution
7. Strategies and competition in the industry
8. Business environment
9. Critical success factors
Overview Of The Industry
Printing is a process for reproducing text and image, typically with ink on paper
using a printing press. It is often carried out as a large-scale industrial process, and is an
essential part of publishing and transaction printing.
Indian print media is one of the largest print media in the world. The history of it started
in 1780, with the publication of the Bengal Gazette from Calcutta. James Augustus
Hickey is considered as the "father of Indian press" as he started the first Indian
newspaper from Calcutta, the Calcutta General Advertise or the Bengal Gazette in
January, 1780. In 1789, the first newspaper from Bombay, the Bombay Herald appeared,
followed by the Bombay Courier next year (this newspaper was later amalgamated with
the Times of India in 1861).
The first newspaper in an Indian language was the Samachar Darpan in Bengali. The first
issue of this daily was published from the Serampore Mission Press on May 23, 1818. In
the same year, Ganga Kishore Bhattacharya started publishing another newspaper in
Bengali, the Bengal Gazetti. On July 1, 1822 the first Gujarati newspaper the Bombay
Samachar was published from Bombay, which is still extant. The first Hindi newspaper,
the Samachar Sudha Varshan began in 1854. Since then, the prominent Indian languages
in which papers have grown over the years are Hindi, Marathi, Malayalam, Kannada,
Tamil, Telugu, Urdu and Bengali.
The Indian language papers have taken over the English press as per the latest NRS
survey of newspapers. The main reason is the marketing strategy followed by the regional
papers, beginning with Eenadu, a Telugu daily started by Ramoji Rao. The second reason
is the growing literacy rate. Increase in the literacy rate has direct positive effect on the
rise of circulation of the regional papers.
The people are first educated in their mother tongue as per their state in which they live
for e.g. students in Maharashtra are compulsory taught Marathi language and hence they
are educated in their state language and the first thing a literate person does is read papers
and gain knowledge and hence higher the literacy rate in a state the sales of the
dominating regional paper in that state rises. The next reason is localization of news.
Indian regional papers have several editions for a particular State for complete
localization of news for the reader to connect with the paper. Malayala Manorama has
about 10 editions in Kerala itself and six others outside Kerala. Thus regional papers aim
at providing localised news for their readers. Even Advertisers saw the huge potential of
the regional paper market, partly due to their own research and more due to the efforts of
the regional papers to make the advertisers aware of the huge market.
The Indian Newspaper industry is one of the largest in the world. It publishes the
largest number of paid-for titles  in the world. In 1997, the total number of newspapers
and periodicals published was 41705, which include 4720 dailies and 14743 weeklies.
The highest numbers of newspapers was published in Hindi, 16864. Newspapers in India
are measured on two parameters, circulation and readership. Circulation is certified by
the Audit Bureau of Circulations which is an industry body. It audits the paid-for
circulation of the member newspaper companies. Readership is estimated by two
different surveys, The Indian Readership Survey (IRS) and the National Readership
List of players in the industry
• The Times of India
• Dainik Jagran
• Malayala Manorama
• The Hindu
• Deccan Chronicle
• Ananda Bazar Patrika
• Amar Ujala
• Dainik Bhaskar
• Hindustan Times
• The Economic times
• The New Indian Express
• The Telegraph
• Deccan Herald
Categorization of players in the industry
Dailies Deccan Chronicle, The Times of India, The Hindu, Aaj Tak, India
Abroad, Deepika Global, Asian Age
Business The Economic Times, The Financial Express, Business Line, Business
Weeklies and The Week, Outlook, India Today, Asha kiran, Panchjanya weekly
Regional Andhra Pradesh: Deccan Chronicle, Andhra Bhoomi, Hindi Milap
Delhi: Hindustan Times, Pioneer
Maharashtra: Bombay Mid-day, Lokmat Times, Sakaal , Loksatta
West Bengal: The Telegraph, The Statesman
Film related Filmfare, Screen, Planet Bollywood, Indian Express Bollywood Scoop,
Apun Ka Choice, Indian Television, RedifIndia, Film Trip, Star Dust
Computer PC Quest, Cyber India, Data Quest, Voice & Data, Computers Today,
related Express Computer, Silicon India
Others The Onion, India Today Plus, Des Pardes, India Together, Teens
Today, Andhra Jyothi in telugu, Wow Hyderabad, Zee Premiere,
Showtime, Arcade, JAM, India Talkies
Brief profile of players in the industry
The Times of India
The Times of India (TOI) is a popular English-language broadsheet daily newspaper in
India. It has the widest circulation among all English-language daily newspapers in the
world, across all formats (broadsheet, compact, Berliner and online). It is owned and
managed by Bennett, Coleman & Co. Ltd. which is owned by the Sahu Jain family.
In 2008, the newspaper reported that (with a circulation of over 3.14 million) it was
certified by the Audit Bureau of Circulations as the world's largest selling English-
language daily newspaper, placing as the 8th largest selling newspaper in any language in
the world. According to the Indian Readership Survey (IRS) 2008, the Times of India is
the most widely read English newspaper in India with a readership of 13.3 million. This
ranks the Times of India as the top English newspaper in India by readership. According
to COM Score, TOI Online is the world's most-visited newspaper website with 159
million page views in May 2009, ahead of the New York Times, The Sun, Washington
Post, Daily Mail and USA Today websites.
The Times of India is published by the media group Bennett, Coleman & Co. Ltd. This
company, along with its other group companies, known as The Times Group, also
publishes The Economic Times, Mumbai Mirror, the Navbharat Times (a Hindi-language
daily broadsheet), the Maharashtra Times (a Marathi-language daily broadsheet).
The Times is self-declared as a liberal newspaper, and is sometimes described as
The Times of India is printed from the following places:
TOI press are in Sahibabad, Ahmedabad, Bhubaneswar, Bengaluru, Bhopal, Chandigarh,
Chennai, Delhi, Goa, Guwahati, Hyderabad, Indore, Jaipur, Kanpur, Kolkata, Lucknow,
Mangalore, Mumbai, Mysore, Nagpur, Patna, Pune, Ranchi, Surat.
Total Average Circulation for 2008: 3,433,000 copies
The Times of India comes with several city-specific supplements, such as Delhi Times,
Calcutta Times, Bombay Times, Hyderabad Times, Kanpur Times, Lucknow Times,
Indore Times, Nagpur Times, Bangalore Times, Pune Times, Ahmedabad Times and
Chennai Times, The Times of South Mumbai, The Times of Doon, Meerut Plus,
Haridwar Plus , Bhopal Plus .
Other regular supplements include:
Times Wellness (Saturdays) – Times Wellness focuses on solutions to health issues and
guidance to better living
Education Times (Mondays) – Education Times caters to the ever-expanding student
community and learning experience, as a career guidance, counselor and adviser.
Times Ascent (Wednesdays) – Editorial of Times Ascent, Centers on human resource
development and the impact and implications on business and society.
ZIG WHEELS – ZigWheels.com is an automotive website reviewing, discussing,
features and interviews on Indian vehicles.
Times Life (Sundays) – Times Life is the supplement which is feature driven
What's Hot (Fridays) – Focus on latest happenings/events. Special pages created for
channels and details of programmes
Rouge (Saturdays) – Concentrates on women's interest areas.
Dainik Jagran is the Worlds Largest Read Newspaper and the Number One Hindi
Newspaper in India. It is the world’s largest read news paper and is one the largest
newspapers in the world. It was the brainchild of the aggressive freedom fighter Mr.
Puranchandra Gupta. The first edition was launched in Jhansi in 1942 and in 1947 Dainik
Jagran shifted its headquarters to Kanpur and thus launched its second edition.
In this new, dynamic world of Indian media Dainik Jagran is an iconic brand. More than
55.7 million people reach out for Dainik Jagran making it the largest read daily of India.
Dainik Jagran’s 37 editions carve a huge swathe across eleven states – Madhya Pradesh
(Bhopal, Indore, Gwalior, Jabalpur, Ratlam, Satna & Saugor) along with the states of
Uttar Pradesh, Uttarakhand, Punjab, Haryana, Bihar, Jharkhand, Himachal Pradesh,
Delhi, West Bengal and Jammu & Kashmir .
Some supplements offered by the Dainik Jagaran are: Jhankaar, Yatra, Sangini, Josh, Nai
Rahein, E - PAPER
Jagran.com has various channels on its website focusing on different information needs
of its users. On the website the latest news in Hindi more than 30 times a day. In addition
to news, they also have more than 30 other channels on their website including:
Junior Jagran - A colored, bilingual, weekly tabloid catering to the taste of the youngsters
and teenagers of 13–19 years age group.
Khana Khazana - A cookery channel targeted at household women who cherish cooking.
Jagran Yahoo! Khana Khazana is a complete resource of multi cuisine recipes and quick
Channel Sakhi - The Sakhi is a premium women’s channel targeted at upwardly mobile
and outgoing women in the upper socio-economic class. The channel highlights the role
of women in modern times and helps them in coping with the outside world.
Josh - A monthly supplement of jagran.com which is concentrating on educational
content, career related queries, personality development, and updates on science and
Cine Maza- A popular Bollywood news and reviews channel of Jagran.com giving
information on Bollywood, top 5 releases, Box office hits, fact files of actors and
actresses with biographies and latest releases.
The Hindu is a leading English-language Indian daily newspaper with a circulation of
1.45 million and is the second-largest circulated daily English newspaper in India after
Times of India, and slightly ahead of The Economic Times. According to the Indian
Readership Survey (IRS) 2008, The Hindu is the third most-widely read English
newspaper in India (after Times of India and Hindustan Times) with a readership of 5.2
million. It has its largest base of circulation in South India, especially Tamil Nadu
headquartered at Chennai (formerly called Madras). The Hindu was published weekly
when it was launched in 1878, and started publishing daily in 1889.
The Hindu became, in 1995, the first Indian newspaper to offer an online edition.
The Hindu is published from 13 locations - Bangalore, Chennai, Coimbatore, Delhi,
Hyderabad, Kochi, Kolkata, Madurai, Mangalore, Thiruvananthapuram, Tiruchirapalli.
The Hindu has many firsts in India to its credit, which include the following
1940 - First to introduce colour
1963 - First to own fleet of aircraft for distribution
1969 - First to adopt facsimile system of page transmission
1980 - First to use computer aided photo composing
1986 - First to use satellite for facsimile transmission
1994 - First to adopt wholly computerized integration of text and graphics in page make-
up and remote imaging
1995 - First newspaper to go on Internet
1999 - Becomes India national news paper
Supplements and features
Mondays - Metro Plus, Business Review, Tuesday - Young World, Education, Book
Review, Improve Your English, Wednesdays - Job Opportunities, Thursdays - Metro
Plus, Science, Engineering, Technology & Agriculture, Friday - Friday Features,
Saturday - Metro Plus Weekend, Sunday - Weekly Magazine, Open Page, Literary
Daily features - This day that age, Religion, The Hindu Crossword, Sudoku Online
presence. The Hindu was the first newspaper in India to have a website, launched in
Type Daily newspaper
Owner Deccan Chronicle Holdings Ltd.
Editor A T Jayanti
Headquarters Hyderabad, India
Circulation 1,349,959 Daily
The Deccan Chronicle is a daily newspaper published through the Andhra Pradesh,
Karnataka and Tamil Nadu states of India. It is published in English. The newspaper's
name derives from the originating place Deccan regions of India. Other supplements by it
are TV Guide, Sunday Chronicle, Chennai and Bengaluru Chronicle. It also supplies
other weekly features like School chronicle, Teen Chronicle, Sunday chronicle, etc.
Eenadu, headquartered in Hyderabad, India, is the largest circulated Telugu news daily in
the state of Andhra Pradesh. According to NRS (National Readership Studies) 2005 it has
got a readership of 1,134,000 and is the third most circulated regional language daily and
10th most circulated daily in India. Eenadu (meaning "Today" in Telugu) was founded by
the Indian media baron Ramoji Rao in 1974. It has played a role in either crowning or
dethroning governments in Andhra Pradesh. It has also successfully adapted the latest
publishing and communication technologies into the Telugu language. Eenadu's rapid
expansion enabled diversification of its portfolio by venturing into numerous other
markets such as finance and chitfund (Margadarsi chits), foods (Priya Foods), film
production (Usha Kiran Films), film distribution (Mayuri Films), and a group of
television channels (ETV). All the businesses are organized under Ramoji Group.
As with any other publication, Eenadu too had its share of struggles. When launched in
Vishakapatnam, it wasn't able to sell more than 3,000 copies a week. Eenadu found itself
struggling to become a daily publication ranked amongst other popular rival publications.
By 1975, Eenadu managed to achieve its target of becoming a daily publication.
However, it was popular in regions and rivalry was still an issue. In a period where the
company needed vision to drive and expand it any further. Eenadu hired a new set of
directors to be part of its key decision and management group which drove it towards
what it is today being the top read, highly circulated newspaper.
Mr. Ramoji rao's growth from no where to every where, is amazing. His name became a
household name. Every one in Andhra Pradesh knows Ramoji Rao. He is an inspiration
for many young business people.
Though Eenadu is a highly circulating news paper, they have a healthy competition with
other circulating news papers Vaartha,Sakshi (magazine), and Andhra Jyoti.
Dainik Bhaskar is a Hindi-language daily newspaper of India. It was started in year 1958
from Bhopal, the capital city of Madhya Pradesh. Its current editor is Ramesh Chandra
Dainik Bhaskar is published from many cities of North and Central India:
Bhopal, Indore, New Delhi, Lucknow, Nagpur, Akola, Raipur, Gwalior, Jabalpur, Jaipur,
Ajmer, Jabalpur, Satna, Varanasi, Ahemedabad.
In Gujarat, and Western Madhya Pradesh the Gujarati Version of the newspaper is also
published as Divya Bhaskar.
Dainik Bhaskar Group publishes a varied range of magazine helpful in many ways, like
'Aha zindgi' a magazine based on highlighting the positive features of life.
The company also runs English newspaper DNA in partnership with Zee Group.
Dainik Bhaskar was first published in Bhopal and Gwalior of the central province. The
newspaper was launched in year 1956 to fulfill the need for a Hindi language daily, by
the name Subah Savere in Bhopal and Good Morning India in Gwalior. Later in year
1957, it was renamed as Samachar Kranti, and then again in year 1958 as Bhaskar
Samachar. Finally in year 1960, it was published as Dainik Bhaskar. There were only 100
prints of the news paper on the first day of its publication, a figure which increased by
69566 within a week and rose to over 2.5 million prints daily in 2008.
Product Lines And Consumer Behavior
PRODUCT LINES AND CONSUMER BEHAVIOUR
Complimentary and substitutes products
Complimentary good for print media is advertisements as it gives high revenues.
Substitutes for print media are radio, television, e-papers, online newspaper, door to door
campaigns, exhibition, and pamphlet distribution.
Product description and range of products
Newspapers uses column of varying width. Some have six columns per page, while
others have eight or nine which affects the size, shape, and costs of an ad.
Newspaper space rates vary with an advertiser’s special requests, such as preferred
position or color.
Growth Of The Industry
GROWTH OF THE INDUSTRY
Rate of growth, pattern of growth, growth determinants
The Indian Media and entertainment industry stood at Rs584 bn in 2008, a growth of
12.4% over the previous year. Over the next five years, the industry is projected to grow
at a CAGR (compound annual growth rate) of 12.5% to reach the size of Rs1052 bn by
2013, says a FICCI & KPMG report on the sector release. The report however,
highlights that the market environment has become increasingly challenging for the
sector, on the back of economic slowdown and the consequent slowdown in advertising
revenues, especially in the last quarter of 2008. Sectors like TV, Print, Radio and Outdoor
which depend on advertising revenues were largely affected and this is estimated to
continue into the current year too. Advertising spends grew at CAGR of 17.1% in the
past three years. Going forward, it is expected to exhibit a robust growth rate at CAGR of
12.4% over the next five years. Potential upsides could take this higher. Growing
acceptance of the digital TV distribution technology, entry of DTH players the success of
many small budget movies, and the rising competition in the regional market were some
of the key highlights of the previous year.
Rajesh Jain, Head Information, Communication & Entertainment, KPMG India
said, “Media companies are under pressure to change, innovate and re-examine their
existing business models. Players need to draw upon new capabilities to survive in this
environment. In the immediate future, media corporate is likely to focus more on
operating margins, and assess opportunities for consolidation, while building on core
strengths.” The projected 12.5% growth for the sector will be driven on the back of
factors like favorable demographics, strong long term fundamentals of the Indian
economy, expected rise in advertising to GDP ratio compared to developed economies
and increasing media penetration. The focus of industry players too is changing; with a
strong emphasis on profitable growth in the current scenario. Hence, media companies
are increasingly concentrating on strengthening existing operations and assessing options
for growth through consolidation, while continuing to innovate. Factors like
Narrowcasting, Regionalization, Internationalization, Organized Funding, Digitization
and Deregulation have become the ‘buzzwords’ in the industry. The Indian Print Media
industry is estimated to have grown by 7.6% in 2008 and reaching around INR 172.6
billion in size. The industry is projected to grow at a CAGR of 9% over the next five
years and reach around INR 266 billion in size by 2013. Growth in the Print media
industry is achievable through sustained growth in advertisement revenues due to
increased advertising spends from emerging sectors such as Education, Organized Retail
and Telecom, improving literacy levels in the country, optimization of cover prices
leading to improved penetration and growth in sales volume, more launches in the niche
segment, like newspaper supplements and specialty magazines, by players. The industry
needs to invest in quality improvements, especially in regional media to attract
advertisers; collective negotiations and bulk purchase of newsprint, constitute forums to
encourage and promote regular reading habits among youth, adopting innovative
practices like trading media space in publication platforms in return for equity and
improve organizational ability to attract and retain talent.
The structure of the Indian print media industry is highly fragmented with importance to
regional dominance. The Indian print media segment primarily comprises newspaper and
As per PwC report, the print industry is expected to grow from Rs 128 bn in 2006 to Rs
232 bn by 2011, at 12.6% CAGR. While the newspaper industry is estimated at Rs 112
bn, the magazine segment is valued at Rs 16 bn.
Higher literacy levels: In 2006, the literacy levels increased to 71.1% as compared to
69.9% in 2005. While rural literacy is at 64.8%, urban literacy touched 85.3%. Currently
Indian print media is estimated to reach over 220 m people, and has immense growth
potential since close to 370 m literate Indians are believed to not be served by any
publication. Also, the reach of newspapers is only 27%, as compared to the global
average of 50%.
Lower cover prices: Earlier, due to strong hold over a region, the newspaper had higher
cover charges. However, with increasing competition and venture into newer regions the
companies have reduced the cover prices to augment more sales. Many English dailies
are sold for as low as Re 1 or Rs 2. The initial subscription offers of ‘DNA’ and
‘Hindustan Times’ (HT) in Mumbai, during their launch period, further reduced the cost
of the newspaper to around 50 paise for an average issue
Higher ad spends: Print media accounts for 48% of the total Rs 137.5 bn advertising
spend in the country. However, the ad spend in India is just 0.4% of GDP as against 0.5%
in China, 1.3% in the US and a world average of nearly 1.0%. With rising consumerism
and growing interest from domestic and global brands in Indian market, the growth in ad
segment is expected to be strong.
As per the registrar of newspapers, there were approximately 6,529 daily newspapers as
of March 2005. No single newspaper had a national circulation. In 2006, India had the
second largest circulation of newspapers with 88.9 m copies per day; second only to
China with 98.7 m copies a day.
Urban & Rural Urban Rural
Base Population (m) % (m) % (m) %
Any Publication 184 23.6 99.9 42.2 84.3 15.6
Any Daily 170 21.9 93.8 39.6 76.6 14.2
Any Hindi Daily 62.9 8.1 35.6 15 27.3 5.1
Any English Daily 17.4 2.2 15.9 6.7 1.6 0.3
Any Magazine 58.9 7.6 33.8 14.3 25.1 4.6
Newspaper Place of strong hold
Jagran Prakashan Uttar Pradesh and Uttaranchal
Times of India Mumbai
HT Media Delhi, Bihar, Jharkhand
Deccan Chronicle Andhra Pradesh
The Hindu Chennai
The Telegraph Kolkatta
Deccan Herald Bangalore
Punjab kesari Punjab
The regionalism aspect is clearly visible in the newspaper sector. The print media is
further divided on the basis of the languages. Of the daily newspapers, about 46% are
vernacular, 44% are in Hindi and 10% are English. Hindi and vernacular language
newspapers offer a local and regional flavor to their readers. The content and circulation
of English-language newspapers, on the other hand, are largely focused on the primary
urban centers. Approximately 7% of the population in urban areas read English-language
newspapers, compared to a readership of only 0.3% of the population in the rural areas.
(Source: IRS 2005) In contrast to this, Hindi-language newspapers have a proportionately
larger readership in rural areas, in addition to their strong presence in urban areas, with a
readership of approximately 15% and 5% of persons in urban and rural areas,
respectively. The newspaper industry is regionally divided, with existing players enjoying
strong brand loyalty. For e.g. Times of India follows strong brand loyalty in Mumbai and
it was difficult for Hindustan Times to enter Mumbai.
The newspaper industry has relatively high entry barriers due to the strong brand equity
of existing players. Also, existing players have strong control over the distribution
network, making it difficult for new players to enter.
Attracting foreign investment
Most Indian print players continued to dominate the local regions and did not enter new
territories, mainly due to lack of funds. However, foreign investment regulations were
relaxed in 2002. Currently, up to 26% foreign direct investment (FDI) is permitted in
newspapers and periodicals dealing with news and current affairs. In non-news
publications, 100% foreign investment is permitted. Since the changes in the regulation
many foreign investors have taken strategic stakes in the domestic print media
A booming Indian economy, literate population on the rise, increasing consumerism,
entry of global brands in the country and opening of the sector to foreign investors would
drive the growth in print media. Also, with newspaper companies entering into newer
regions and segments would lead to stronger growth.
Technology Of Production And Distribution
TECHNOLOGY OF PRODUCTION AND DISTRIBUTION
The nature of the newspaper industry's cost structure is causing the field's current woes
and will require transformation in order to reduce fixed costs by outsourcing printing.
The current cost structure leaves revenue generation sectors well under funded with
content creation and advertising sales receiving just 14 percent and 16 percent of the cash
operating costs respectively. On the other hand, 70 percent of costs are devoted to print
distribution and corporate expenditure. As revenue from advertising continues to decline
the large cost of outsourcing printing is causing huge cash flow problems for newspapers.
More recapitalization and closures are imminent unless newspapers can begin to
better monetize digital content and cut structural costs to rival increased competition in
the news industry.
Print media industry desperately needs to increase their cover price, but the only reason
for pegging the cost at ~10% of the cost of production is due to the fear that no one will
buy them because rival papers may become cheaper. Hence, they are heavily dependent
on advertising to take care of costs and generate revenue. Recently, many newspapers
revised cover prices. Hindustan, Dainik Jagran and Amar Ujala raised their cover price
in Meerut and Dehradun to Rs 3 from Rs 2.50. Similarly, in Bihar and Jharkhand, Dainik
Jagran, Prabhat Khabar and Hindustan raised their cover price by 50 paise to Rs 4. The
cover price of Hindi dailies in UP and Uttarakhand are expected to go up to Rs 3.50 and
those in Rajasthan to Rs 3. English dailies, too, have raised their cover price in many
markets, though Delhi seems to be unaffected as of now but for The Hindu which raised
the price from Rs 2.50 to Rs 3.
The economic downturn appears to have taken a severe toll on the Indian print media
industry. It's bleeding, given the conditions across all platforms. With dipping Ad
revenues due to the slowdown and high cost structure, the print media industry will
continue to face pressure for the next two to three quarters. Layoffs and salary cuts may
become a necessity for many businesses to survive as they have added substantially to
Advertising and Circulation Revenue
There are two basic sources of revenue for the newspapers:
The circulation revenue recovers only a part of the cost of producing a newspaper. The
bonus of making a profit after all costs is on the advertising revenue. If circulation falls,
advertisers shy away from using the medium. On the other hand increases in circulation
to take reflect on ad revenue takes time. Newsprint account for about 70% of the cost of
production, but any increase in circulation does not decrease per unit cost. Also any
marginal increase in advertisement revenue due to increase in circulation is not apparent
in the short run.
The print media industry will continue to face pressure for the next two to three quarters,
as per the analysts. Layoffs and salary cuts may become a necessity for many businesses
to survive as they have added substantially to their capacities.
Relief on newsprint costDue to the current economic slowdown impacting the print
media industry, the Government has announced special customs duty exemptions for the
newspaper & magazine publishing industry. Till now, a custom duty of 3% was
applicable on newsprint and 5% on lightweight coated paper. A special additional duty of
4 per cent was also levied, which has now been waived.
Newsprint prices, which constitute more than 70% of the cost of producing a newspaper,
shot up last year by around 60-65%. The concessions announced by the Finance Ministry
• Full exemption in customs duty on newsprint and glazed newsprint used for printing
• Full exemption in customs duty on lightweight coated paper used for printing
magazines. These exemptions will reduce the price burden to some extent and so too the
reduction in imported newsprint prices from its peak.
• Information and Broadcasting ministry came to the rescue of small and medium
newspapers by announcing a revised policy of releasing Government advertisements.
• It increased the advertisement quota of the Directorate of Audio Visual Publicity
(DAVP) for small papers from 10% to 15% and for medium newspapers from 30% to
35%. Under the new policy, 35 per cent of DAVP advertisements in rupee terms will be
given to regional and other language newspapers against the existing limit of 30%.
• Under the new policy, all ministries, departments and subordinate offices of the
Government of India can issue tender notices directly to empanelled newspapers at
Economies of scale and economies of scope
A survivor analysis for daily newspapers from 1964 to 1981 indicates that papers with
5,000 or less circulation are withering away, while papers in the 100,000-500,000
circulation size range are less likely to have gained local or national market share, once
intercity shifts in demographic variables are considered; no statistically significant
increase in the distribution of firms in these ranges is evident. On the other hand, the
10,000-100,000 circulation size classes have experienced substantial increases in the
number of firms and in market share. The increased number of firms in these classes
represents a statistically significant shift in the size distribution of firms, and the log-odds
ratio of increased national or local market share for existing papers in this size range
substantially exceeds that for papers in the 100,001-500,000 size classes. Finally, the
500,000 plus circulation size class has experienced an increase in market share and an
increase in the number of firms. While the shift in the size distribution of firms is not
significant, the log odds ratio of increased national and local market share is greatest for
this size class. Except for the very largest class, these results are consistent with the
conjecture that the new technology of daily newspapers has reduced first copy costs and
lowered the minimum efficient scale. This conclusion is buttressed by the performance of
firms in the 10,000- 100,000 circulation size range in both national and local markets,
and taking intercity shifts in demographic factors into account. Moreover, the second
smallest size category, 5,001 - 10,000, while not experiencing a statistically significant
increase in the number of firms, did demonstrate a high log odds ratio of increased
market share when demographic variables are included in the analysis. The performance
of the 500,000 plus circulation size class is difficult to interpret.
The economies of scope increases with increase in number of advertisers where they get
high return and in turn help in reduction in cost of the newspaper as the processes utilize
the same resources.
Value added, logistics and labor
The value added for newspapers and magazines are advertisers and readers who are
capable of attracting higher revenues or adding to its differentiation. The value added
advertisements are commercial ads, festival wishes, birthday wishes and anniversaries.
Competitive advantage by identifying issues and providing fast resolutions or actions
• Raw Paper Inventory. Real-time visibility of paper inventory in warehouses, track
inventory cost and availability and evaluate of risks/what-if-analysis and their impact on
• Paper Procurement. Optimize planning, supplier short list, and price negotiation, with
on-demand information about past performance, costs, and the current state of available
paper and demand.
• Paper Quality and Faults. Alert and informed about faults such as tearing and miss-
prints during set-up and production. Match faults to paper type, grade, roll and supplier.
• Sell waste/defect paper. Identify opportunities and track metrics related to selling
waste paper (e.g. for recycling).
• Production Performance. Track printers’ production activity by facility, shift, printer
and type of paper. Identify faulty paper, human errors, production quality and efficiency.
Today the distribution in print media industry is viewed as a value added or ancillary
service. Ancillary services have been identified a challenge in printing industry for
growth opportunity. Distribution is a customer service offering that starts when the job is
scheduled. Efficient distribution involves the use of market expertise to negotiate freight
rate and logistics services, routing, and overall compilation or management and
organization of products and distribution. Other aspects of distribution include
warehousing, shipping, inventory management, fulfillment and kit packing.
Newspapers require unique definition of their product, information, and financial flows to
be adapted to supply chain and other quantifiable management programs. The primary
supply chain flow for newspapers is the outbound product flow and its associated
information flow. Newspapers have successfully separated subscriber and advertiser
cash flow timing from product delivery. As such, all financial flows within the newspaper
supply chain are either discretionary (how much newsprint and ink inventory is carried),
or direct costs resulting from the supply chain in place.
The primary components affecting the total supply chain cost for a newspaper are:
• Inbound Information: advertising, news, editorial, pagination
• Press Operations: plate making through pressing
• Packaging Operations: handling, insertion, storage, package design & flow
• Distribution Operations: transport mode, timing, locations, and handling.
Balancing time and workflow across the supply chain will yield the largest results. A
dynamic cost and process flow model of the newspaper supply chain will be essential in
keeping pace with changing needs and demands within the newspaper industry.
In print media industry the labor market is highly skilled. Number of employees is the
sole basis of the industry. Skilled labors required are press operator, information system
analyst, HR, reporter, journalist, editor, librarian, sales supervisor, promotion manager,
publisher, general manager, web manager.
Market segmentation, marketing strategies, marketing practices and marketing concepts
specific to the industry.
The print media industry has low entry and exit barriers. However, there is intense
competition for market share in the industry. Many players are well established in their
respective regions and it is difficult for new players to penetrate the market. The market
for print media can be segmented based on geography, demographics and
psychographics. Many players used technology and marketing strategies to emerge as
global giants. In India, the print media industry is in the growth phase. There are a few
well-established players in the industry, with each player constantly trying to increase its
market dominance. The decision of the Indian government to allow 26% FDI in Indian
print media has received mixed response from media houses. Some players strongly
opposed the move while others welcomed it. Promoting, advertising, and marketing
products or services are the most basic ways to drum up new business. But it should
come as no surprise that the vast proliferation of media seen since circa. 2000 has been
wreaking havoc with traditional approaches to marketing and promotion.
A partial list of the media available to marketers includes, but is not limited to:
• print direct mail
• print catalogs
• print advertising (magazines, newspapers)
• Web sites
• Web advertising (banners and other ads)
• e-mail direct mail/e-letters
• search engine marketing (sponsored links on Google, e.g.)
• broadcast/satellite radio
• broadcast/cable/satellite TV
• billboards/posters/outdoor advertising
• point of sale/point of purchase displays
• word of mouth/so-called “viral” marketing
• computer desktop “wallpaper”
• advertising on mobile phones/other portable devices
• ring tones for mobile phones
• social networking sites (like MySpace)
• online video (like You Tube)
• in-game advertising (for videogames)
• And on and on and on…
Part of the marketing problem is that, thanks to inexpensive electronics and display
technologies, almost any surface can be a marketing vehicle. After all, consumers are
awash in advertising and marketing messages, which all intermingles to create a dense
wall of background noise. The Industry Measure has conducted extensive research into
media channels and the ways in which those channels are changing. In a recent survey of
ad agencies, for example, it was found that:
• 70% of ad agencies currently use print direct mail (not variable) to market and
promote their and their clients’ services or products;
• 52% currently use Web advertising (banners, rich media, etc.);
• 45% currently use outdoor/display advertising (signs, posters, fleet graphics); and
• 45% also currently use broadcast radio.
“Less important” shouldn’t be construed as meaning “unimportant.” In today’s media
mix, “it’s all good.” At the same time, some advertisers and marketers are jumping onto
whatever new medium comes down the pike, fearful perhaps of missing out on the “next
big thing.” While new media are important to the overall media mix, older established
media are often still the most effective. This is why a judicious combination of media is
the best approach.
There are certain guidelines marketers can take to ensure that their media rupees are not
spent in vain.
First, identify the target audience and think carefully about the best medium/media to
reach them. Different demographic groups (age, gender, income, even geographical
location) have different media habits. Print may not be the best way to reach certain
groups, while the Internet may not be the best way to reach certain other groups.
Second, combine media. Relying on just a print direct mail campaign may garner some
new business, but combining that with a direct e-mail blast, an outdoor advertising
campaign, radio spots, or some other combination of media will help build brand
Third, to keep the advertising message and design elements consistent across media.
Using the same logo and logo colors, the same fonts, the same tagline phrasing, the same
or similar text, etc., in all your media permutations. This helps with branding and
reinforcing the message. At the same time, the adoption of “design-once-reuse-many”
strategy helps save costs on design and lets you get more “bang for your buck.”
In print media industry, newspapers and magazines are difficult to use for direct
marketing because the ads have to compete with the clutter of other ads and because the
space is relatively expensive, response rates and profits may be lower than in other
Types of innovation, concepts of innovation relevant to the industry, source of
innovation, rate of innovation and economies of scale.
Types of innovation
The Concepts in innovation relevant to the industry are disruptive innovation, process
innovation, business model innovation.
The newspaper industry is going through a "disruptive" change, a phenomenon that has
transformed industries such as retailing, computing, airlines and automobiles. The bad
news is that when the dust of disruptive change settles, historically even the best-run
companies typically end up in the loser's column. Disruptive innovations typically offer
lower performance along dimensions that firms consider critical. In exchange, new
benefits are introduced along dimensions such as simplicity, convenience, ease of use, or
low price. In the media industry, blogs, Google, eBay, Monster.com, and freely
distributed commuter papers each fit the pattern of disruptive innovation. Each emerging
competitor lacks something that is core to most newspaper companies' value proposition.
Some can't match a newspaper's broad distribution network. Others can't compete with
the newspaper's detailed reporting capability or local reach. All, however, compete along
dimensions of performance that are different than the traditional metrics emphasized in
the print newspaper business. Three barriers typically make it difficult for market-leading
incumbents to get disruption right:
1. Fail to spot the disruptive change early enough: Disruptive change tends to start
innocently at a market's fringes. Market leaders tend to dismiss early disruptive
developments because they just don't affect their core business.
2. Fail to allocate sufficient resources towards disruptive offerings: Disruptive
innovations often have lower performance and lower prices than established
offerings. Companies find it hard to prioritize spending time and money on disruption
when they have seemingly attractive opportunities in their core business.
3. Force the disruptive initiative into the existing business model and product
Most newspaper companies still focus a disproportionate share of time and attention on
their print product. While not ignoring that product, allocating more resources towards
new disruptive products makes sense. It seems clear that newspaper companies must re-
imagine their content and business models if they hope to succeed. Despite the sense of
doom and gloom that pervades the industry today, there are signs of hope. While
newspaper readership is declining, information consumption is increasing. Almost every
newspaper company has made the transition to the Web, with their properties attracting
new audiences and new advertisers. In fact, the interactive nature of the Web allows
forward-thinking companies to completely change the way they interact with readers and
advertisers. Readers can become content creators and community builders. Web sites can
serve advertisers that would eschew the static nature of print. Additionally, companies
are experimenting with new approaches. Dozens of companies have launched free papers
targeted at young readers or recent immigrants. Newspaper companies should look at
their local market to identify jobs that people can't get done well today. They should
think of the great assets they have at their disposal — top-flight journalists, strong brands,
in-depth local knowledge, healthy balance sheets — and think how they could
reconstitute those assets to address important, unsatisfied jobs.
The Cost dimension in media product innovation requires a media organization to obtain
a cost advantage through product innovation, thus enhancing the probability a media
product is chosen. The Value Analysis Model sees “cost” as the “fee incurred in a
product’s life circle”. The cost advantage the media product innovation want to realize
include low media consumer cost and low media product cost. However, under the usual
circumstances, the above-mentioned two costs are in a zero-sum relation -- A decrease of
one of them will inevitably cause an increase in the other. Given that, before media cost
innovation can be realized, two questions need to be tackled: How to cut media consumer
cost, and how to cut media product cost thus caused. Media Product Cost is closely
related to the learning curve, experience curve, scale economy, economy of scope and
innovation method. This is because: Firstly, as a media organization gains experience in
its targeted market, its pinpointing skills will increase and thus can better satisfy the
media users’ needs. Increased targeting skills will consequently reduce the redundancy in
the content it produces and increase the efficiency as a media user fulfills its needs while
using the content in a given time span. As the content redundancy is cut, the media can
offer more space for advertisements, and the media’s attraction to ads increases
accordingly. Meanwhile, increased accuracy in information collection and processing
will greatly cut resources consumed by the reporting and editing team. This deduces the
total operation cost of the media organization. As we can see, a media product innovation
based on collective intellect (core competence) can cut the cost it pays in learning and
experience. Secondly, as the scale expands, the media product will see a cost cut,
according to the scale economy theory. But essentially an influence economy, the media
economy generally operates at a loss at the early stage. Expanding the scale in a free rein
will very likely impoverish the media organization; therefore, what it needs is a relative
scale advantage rather than an absolute one. So in the media product innovation process,
the media organization should try to obtain a relatively efficient scale at a time spell
shortest possible while decreasing the possibility of an inefficient scale, exerting a cost
control in both aspects. Beijing Times, for example, launched at a very low newsstand
price, but latter increased it three times within one year of the launch in order to cut cost
in the most. Thirdly, according to the economy of scope, a media product innovation
should be conducted within a business scope where a coordination, mutual support and
resources sharing are possible and efficient. Only when this condition is met can a cost
cut be realized, otherwise the so-called diseconomies of scope will appear. Therefore, a
media product innovation should be carried out on the basis of a media organization’s
core resources and center on competence strengthening. The overall goal of the
innovation is to realize media expansion at a low cost. Fourthly, the media product
innovation encompasses independent innovation, emulation innovation and cooperative
innovation, with each of them having a different cost-saving ability. Among the three,
independent innovation is most expensive, while the latter two are more cost-efficient,
imitative innovation in particular. So, cost-centered media product innovation tends to
adopt the imitative innovation approach or even a complete imitation in order to reform
the media product line. In this approach, to be cost-saving, the core product a media
organization offers should be uniform with that of its competitor’s, but can be very
innovative in its outer appearance and other benefits it offers. Using this approach, the
consumer cost is transferred, and as whole the product life cycle cost is reduced, and its
In summary, efforts in the four aspects discussed above can, through reorganizing its
production elements, help a media organization obtain higher production efficiency and
cut media product unit cost, thus obtaining a sustainable competition advantage. An
examination of the newspaper competition in Nanjing in 1999 shows the cost innovation
by some of the competing newspapers in the city was still on the first aspect, and few
were on the second aspect. Therefore, thinking about media competition as merely a
competition of “burning money”, to cut the media users cost while ignoring media
product innovation is too naive and detrimental both to a media’s growth and the nurture
of its all-around ability.
Strategies And Competition In The Industry
Strategies and competition in the industry
Strategies used in the industry, Porter’s generic strategies model, porter’s five forces
model and analysis using it, element of industry structure, porter’s value chain model
analysis, swot analysis, concept of generic value chain, concept of growth share market
matrix, company position .
The pricing of ad space in newspapers has always been tricky. In India, the English
dailies are seen as premium and the ad space in these is sold to clients, that are into high
end products and hence the ad spaces in English dailies always sells at a premium. To
understand these factors which affect the pricing strategies of dailies and bundles of
dailies models were created during the course of the study based on rate cards of Indian
newspapers. The model developed to identify pricing strategy of dailies used circulation,
size of the ad and the location of the ad on the newspaper as some of the key factors of
determination. The model was developed by regressing ad rates with the above
Brand image, duplication of readership and area of circulation were some of the
additional factors that were considered while developing a model for the pricing of
bundled services. Since these variables were qualitative, dummy variables were assigned
and regression of these multi variables was done using SPSS. The models developed
helped in identifying the intensity of impact of each factor on ad rates and the discounts
offered. But on a practical case, the impact deduced was on a smaller scale. It was found,
through interviews, that client relationship actually plays a key role than the above
mentioned factors. Thus the empirical model developed helped identify the correlation
between the factors mentioned and the ad rates and the base rate on which all these
factors are applied depends in personal relationship between the publisher and the
Supply creates its own demand.
High degree of market coverage.
Service and flexibility.
Revenue increases with increase in number of advertisements.
Products can easily be recycled.
Short life span of the product.
Digital space technology.
Growing mass media
Consumer migration to TV media.
Porter’s generic strategies model
Generic strategies were used initially in the early 1980s, and seem to be even more
popular today. They outline the three main strategic options open to organization that
wish to achieve a sustainable competitive advantage.
The generic strategies are: 1. Cost leadership, 2. Differentiation, and 3. Focus
1. Cost leadership
In the case of media products, means they should be offered at a price lower than their
competitors’ but with as good benefits, or, the unique benefits the media products offer
can over-offset the premium.
Differentiation in media refers to when a media organization provides unique benefits to
the media users through product innovation. This is to increase the probability of the
media users to choose the product. A media organization with a target user loyalty can
concentrate more on how to fully meet the target user’s needs rather than on product cost
Focus strategy is also known as a 'niche' strategy. The clutter of ads has now spilled out
on the number of channel availability due to which people are spoilt for choice. Thus
Niche channels are the only way to maintain viewer loyalty. Some premium-branded
newspapers, a bit like The Sunday Times is more niche-orientated.
Porter’s five force model
The five forces which one must consider to analyze any industry are the rivalry between
the firms within the industry being analyzed, the bargaining power of buyers, the
bargaining power of suppliers, the threat of substitute products or services, and the threat
of new entrants (also known as barriers to entry). They are also shown in the diagram
below. Initially propounded by Harvard Business School Professor Michael Porter, the
Five Forces framework has been accepted as a strategic framework which one can apply
to analyze any industry.
Let's consider rivalry within the industry first. It is common sense to assume that if the
rivalry is intense, average profitability will reduce. In other words, to increase
profitability, firms within an industry may have to coordinate for collective good. For
example, if the firms want to avoid costly price wars which will ultimately reduce profits
for all firms, firms need to coordinate. However, this is easier said than done. Frequently,
in an industry comprising of firms large and small, smaller firms tend to lower prices to
increase market share, and ultimately larger firms follow. Bargaining power of suppliers
and customers always needs to be considered, while analyzing any industry. The threat
of substitutes is important while analyzing an industry. Currently, with the onslaught of
the Internet, traditional media like print and TV are under attack. Online advertisers like
Google and Yahoo!, two well known Internet companies, are ensuring that more and
more advertising move to the World Wide Web, at the cost of print and TV advertising.
In short, the Internet and the mobile Internet have emerged as real substitutes to reading
newspapers and magazines and watching TV.
Concept of generic value chain
A value chain is a chain of activities for a firm operating in a specific industry. The
business unit is the appropriate level for construction a value chain, not the divisional
level or corporate level. Products pass through all activities of the chain in order and at
each activity the product gains some value. The chain of activities gives the products
more added value than the sum of added values of all activities. It is important not to mix
the concept of the value chain with the costs occurring throughout the activities.
The value chain categorizes the generic value -adding activities of an organization. The
"primary activities" include: inbound logistics, operations (production), outbound
logistics, marketing and sales (demand), and services (maintenance). The "support
activities" include: administrative infrastructure management, human resource
management, technology (R&D), and procurement. The costs and value drivers are
identified for each value activity. The value chain framework quickly made its way to the
forefront of management thought as a powerful analysis tool for strategic planning.
Concept of growth share matrix (BCG model)
Also called the BCG Matrix, it provides a useful way of looking at the opportunities, and
helps analyze which segments of the business are in a good position – and which ones
aren’t. That way, one can decide on the most appropriate investment strategy for the
business in the future, and where best to allocate the resources. Market share is the
percentage of the total market that is being serviced by the company, measured either in
revenue terms or unit volume terms. The higher the market share, the higher proportion
of the market one can control. The Boston Matrix assumes that if one enjoy a high market
share they will normally be making money (this assumption is based on the idea that you
will have been in the market long enough to have learned how to be profitable, and will
be enjoying scale economies that give you an advantage).
The Boston Matrix categorizes opportunities into four groups, shown on axes of Market
Growth and Market Share:
Dogs: Low Market Share / Low Market Growth
In these areas, market presence is weak, so it's going to take a lot of hard work to get
noticed. Also, one won't enjoy the scale economies of the larger players, so it's going to
be difficult to make a profit.
Cash Cows: High Market Share / Low Market Growth
Here, they are well-established, so it's easy to get attention and exploit new opportunities.
However it's only worth expending a certain amount of effort, because the market isn't
growing and opportunities are limited.
Stars: High Market Share / High Market Growth
Here they are well-established, and growth is exciting! These are fantastic opportunities,
and one should work hard to realize them.
Question Marks (Problem Child): Low Market Share / High Market Growth
These are the opportunities no one knows what to do with. They aren't generating much
revenue right now because they don't have a large market share. But, they are in high
growth markets so the potential to make money is there.
Question Marks might become Stars and eventual Cash Cows, but they could just as
easily absorb effort with little return. These opportunities need serious thought as to
whether increased investment is warranted.
To understand media, we need to understand the political environment in which they
operate. The media industry may not want government regulation in some matters, but in
this case it certainly does want government intervention. The government’s protection of
copyright is crucial to the continued functioning of the media industry. Without
government enforcement of copyright laws, the for-profit media industry would be
unable to survive. Thus, the relationship between government and media is more
complex than a simple “freedom of the press” slogan might suggest. To make sense of it,
we must understand the constitutional notion of “freedom of the press” in historical
For most of the 20th Century, newspapers were the primary source of information for the
public. Whether the subject was sports, finance, or politics, newspapers reigned supreme.
Just as important, their ads were the easiest way to find job opportunities or to learn the
price of groceries at your town's supermarkets. The great majority of families therefore
felt the need for a paper every day, but understandably most didn't wish to pay for two.
Advertisers preferred the paper with the most circulation, and readers tended to want the
paper with the most ads and news pages. Thus, when two or more papers existed in a
major city (which was almost universally the case a century ago), the one that pulled
ahead usually emerged as the stand-alone winner. After competition disappeared, the
paper's pricing power in both advertising and circulation was unleashed. Typically, rates
for both advertisers and readers would be raised annually – and the profits rolled in. For
owners this was economic heaven.
Social factors influence people's choices and include the beliefs, values and attitudes of
society. So understanding changes in this area can be crucial. Such changes can impact
purchasing behavior. Consumer attitude is very important social factor.
Technology is increasingly competing with print media by opening access to endless
sources of news. It may now seem that the need of the reader to buy a newspaper for
news and the need of the advertiser to advertise in it is slowly receding. Thus it is for the
newspapers to look at emerging options and to rework their traditional sources of
Newspapers face significant challenges on the back of economic slowdown and the
consequent slowdown in advertising revenues, especially in the last quarter of 2008.
Print media industry has to adapt to a fast-moving environment and players need to draw
upon new capabilities to survive in this environment.
As a measure of policy liberalization, Government has allowed Indian edition of foreign
news magazines for facilitating wider readership at affordable prices. Also, Government
has recently announced facsimile edition of international news papers to be brought to be
India. Government has reviewed the print advertisement policy and brought about
changes to support small and medium newspapers. As per that policy, advertisement
support has been increased from 10% to 15% for Small newspapers and from 30 to 35%
for Medium newspapers, in money terms. Minimum publication period requirement
drastically reduced from 36 months to 6 months for regional languages newspapers.
Niche channels are the only way to differentiate content and have a captive audience.
The clutter of ads has now spilled out on the number of players due to which people are
spoilt for choice. Thus Niche channels are the only way to maintain reader’s loyalty.
Increased consumerism and Multiplication of players is leading companies to increase
their ad spend to create brand recall. This in return means more revenues for the media
companies fueling further growth.
Prices in India whether it is for cable connection, film tickets or newspapers remain one
of the lowest in the world though huge volumes compensate for low prices. With
increased purchasing power of the India urban class as well as the rural people, and the
expendable income, prices will increase with increase in choice.
Print has already opened for FDI ranging from 26% to 100% equity stake. With more and
more players jumping on the bandwagon, even for abroad, the regulations will be relaxed
and the industry will be a much bigger one.
Use of technology for special effects, animation and other creative work leading to better
quality of media products. Digital technology is increasingly competing with print media
by opening access to endless sources of news. It may now seem that the need of the
reader to buy a newspaper for news and the need of the advertiser to advertise in it is
slowly receding. Thus it is for the newspapers to look at emerging options and to rework
their traditional sources of revenue.
SHARE OF ADVERTISEMENT IN DIFFERENT MEDIUM:
GROWTH RATE OF ADVERTISEMENT REVENUE IN DIFFERENT MEDIUM:
Medium Year of growth in 2008(%)
Leading newspaper in India Figure
DAINIK JAGRAN 21.2
DAINIK BHASKAR 21
AMAR UJJALA 10.8
RAJASTHAN PATRIKA 9.4
TIMES OF INDIA 7.4
THE HINDU 4.1
Advertising and promotion by George & Michael