Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.



Published on

Published in: Business


  1. 1. A REPORT ONTHE GROWTH OF INDIAN PRINT MEDIA IN THE LAST DECADE AND ITS FALLOUTS Faculty Guide: Mr. Biswajit Chowdhury Guest Lecturer, SIBM Bangalore Prepared By: Shubha Brota Raha Student, EMBA 2011-13 Batch SIBM Bangalore i
  2. 2. ACKNOWLEDGEMENTI take this opportunity to extend my gratitude to the following worthy people who helped me insuccessful completion of this project report. Mr. Biswajit Chowdhury (faculty guide), Guest Lecturer, SIBM Bangalore for his valuable teachings on the subject of Managerial Communication & Business Ethics and for his precious inputs on formal report writing. Dr. Papiya Banerjee, Dy. Director, SIBM Bangalore for providing the adequate educational infrastructure. Mr. Krishna Kumar, CEO, Simbus Technologies for lending the necessary support to carry out this project. Ms. Sony Thomas, Founder, Adwize Pvt. Ltd. for her prized inputs on Indian media and advertising.I am indebted to the FICCI-KPMG’s media reports, FICCI-PWC media reports and PWC’s (Price WaterCoopers) media reports for providing ample amount of data for this project.I am obliged to the teaching fraternity and the resource center of SIBM, Bangalore for assisting to impartquality education, without which the fulfillment of this project stood meaningless.Last, but not the least, I am very grateful to my parents for their constant moral support.Shubha Brota RahaEMBABatch 2011-13SIBM, Bangalore ii
  3. 3. INDEXS.NO. TOPIC PAGE1 Statement of the Problem 12. Objectives 13 Scope and Limitations 14 Methodology 15. Introduction 26. Market Analysis 97. The Growth Story 138. The Fallout Stage 209. The Road Ahead and the Conclusions. 24 iii
  4. 4. 1. STATEMENT OF THE PROJECTThe growth of Indian print media in the last decade and its fallouts2. OBJECTIVES Market analysis of Indian print media The growth story The fallout stage The road ahead and the conclusions3. SCOPE AND LIMITATIONS:The report focuses on the study of Indian print media market, the trajectories of its growth and fallout inthe past decade and then discusses about the future path. The study is based on internet research andsources have been thoroughly acknowledged. All the data, analytics and graphs have been taken fromsurveys by established brands.Even though only the inputs from standard surveys have been used in this study, the authenticity of thedata collected can be a possible limitation, in the absence of concrete evidence. Another limitation is thelack of interaction with domain experts due to non-availability of ample amount of time and necessarycontacts. Moreover the topic covered is a gigantic one and covering all the aspects is beyond the scopeof the project timeline. Thus the report is not descriptive but concise and crisp in nature.4. METHODOLOGYIntense content search from internet has been used to collect the data. The study has been thoroughlysupported by charts and graphs for better level of comprehension. 1
  5. 5. 5. INTRODUCTIONIndia has consolidated its position as the world’s fourth largest economy, behind the United States,China and Japan, in Purchasing Power Parity (PPP), according to the latest World DevelopmentIndicators and has the third largest GDP in the entire continent of Asia. It is also the second largestamong emerging nations. (These indicators are based on purchasing power parity.) India is also one ofthe few markets in the world which offers high prospects for growth and earning potential in practicallyall areas of business. When the Economic Reforms were introduced in 1991, India chose to shift gearfrom a closed, license- driven Economy to one, which embarked on globalization and economicliberalization.5.1 Printing Industry:Printing is a process for reproducing text and image, typically with ink on paper using a printing press. Itis often carried out as a large-scale industrial process, and is an essential part of publishing andtransaction printing.Over the years, the printing industry has grown in all parts of the globe. The advent of TV and Internethas not affected the growth of and requirement for printing professionals. The industry has made giantstrides in recent times in improving its machinery in terms of the scope, technology and speed.Computers and electronics have invaded all the departments of printing, improving quality and speed ofthe jobs executed with the consequent enhancement of costs enormously. In fact, the arrival ofcomputers has complemented the printing business and has played a vital role in increasing its status asa clean profession.5.2 Status of Indian print industry:The Indian Print Industry has undergone a revolutionary change in the last 15 years. In 1990, Indiainitiated a process of reforms aimed at shedding protectionism and embracing liberalization of theeconomy. Privatization was initiated with the aim of integrating the Indian economy with the worldeconomy. This change opened the doors for the Indian Print Industry to modernize, by investing in thelatest of technology and machinery. The average compound annual growth rate has been higher than12% over the last 15 years. Our packaging industry is currently growing at a rate of more than 16% ayear. Prior to 1990, most printers found it easy to invest in East German and Czechoslovakian machines.Post 1990, the trend has been to acquire the latest and the best equipment & machines. The progressiveprinters of today are equipped with the latest computer controlled printing machines and flow lines forbinding, while state of the art digital technologies are being used in pre-press. Leading print companieshave optimized the use of information technology in each and every area of their business. Theseprinters are today equipped at par with the best print production facilities in the world.Today, India is fast becoming one of the major print producer & manufacture of printed paper productsfor the world markets. The quality standards have improved dramatically and immense productioncapacities have been created. Some printers have won recognition by winning prizes at internationalcompetition for excellence in printing. The current annual turnover of all the components in the Indianprinting industry are more than Rs.50,000 crores. That is in the region of USD 11 Billion.Indian books, journals and printing jobs, etc. are being exported to over 120 countries of the world bothdeveloped and developing. Indian exports of books, printed pamphlets, newspapers & periodicals, jobprinting and printed materials during 2004-05 was estimated to the tune of USD 550 million. 2
  6. 6. 5.3 Hubs for Indian Printing Industry:There is a set of industry players which are growing systematically and regularly. These kinds of set-upsdo not belong to any specific region of India but are scattered all over the country. The so-called clustersof printing Industry are present in: North: Amritsar, Delhi, Faridabad West: Ahmedabad, Bombay South: Bangalore, Coimbatore, MadrasThe publishing firms in the private sector are also quite large in number and these are scatteredthroughout the country. But majority of these are very small in operation and each one of these may notbe producing more than a dozen titles in a year. These are also confined to producing titles in Indianregional languages and catering to the needs of the local markets. Only a few (about 10%) of thepublishing concerns in India are reasonably large producing more than 50 titles annually and areequipped with proper infrastructures such as printing presses and distribution networks. In totality,today Indian publishing is one of the greatest in the world and the country is counted among the topseven publishing nations.Many printers are adopting newer and modern technologies. The growth of such organisations indicatesthat recession is nothing but a changing trend towards adoption of new style of working. The modernstyle of business is completely in favor of the consumers. It ensures that they get optimum qualityproducts at bare minimum price. Probably in all areas of life the consumers are getting products at mostcompetitive prices, which is definitely lower than yesterday’s prices and printing industry is noexception. To meet this challenge, people in the printing industry have to find the solutions and not freton decline in prices. Some printers with a vision have already taken a step towards it and are able toproduce printed products at much lower unit price by adopting new technologies.5.4 Facts about Indian Printing Industry: More than 1,30,000 all types of printing presses in India More than 10 Million family involved in the Industry 20 Billion + Turnover Per capita consumption of Paper & boards - 4.5 KGs Machinery new and second-hand used is predominately from China, England, France. Germany, Italy, Japan, Netherlands, Switzerland, Spain, Taiwan, USA.5.5 The Media & Entertainment Industry:Bolstered by increased advertising spends in 2010, the M&E industry witnessed a significantly improvedgrowth rate compared to 2009. The year was full of interesting developments with an influx of newcontent distribution platforms, growing regional markets, surge in DTH subscriber base, and theeventual 3G auction and rollouts. Over the next few years, these trends are expected to change thedynamics of the M&E industry, and the future looks extremely promising! However, the media universeis increasingly becoming more complex, specialized and fragmented. Today for media businesses, it hasbecome essential to understand rapidly changing consumer behavior and preferences. This learningcould then be utilized to help build focused content, marketing and delivery strategies for each target 3
  7. 7. audience segment. Moreover, in order to become high performance enterprises, companies will need toevolve in a manner in which they distribute content over secure platforms, optimize costs and adoptbest practices in operations.5.6 M&E Industry Size and Projections:The Indian M&E industry grew from INR 587 billion in 2009 to INR 652 billion in 2010, registering anoverall growth of 11 percent. Backed by positive industry sentiment and growing media consumption,the industry is estimated to achieve growth of 13 percent in 2011 to touch INR 738 billion.As the industry braces for exciting times ahead, the sector is projected to grow at a CAGR of 14 percentto reach INR 1,275 billion by 2015. While television and print continue to dominate the Indian M&Eindustry, sectors such as gaming, digital advertising, and animation VFX also show tremendous potentialin the coming years. By 2015, television is expected to account for almost half of the Indian M&Eindustry revenues, and more than twice the size of print, the second largest media sector. Thecontribution of advertising revenue to overall industry pie is expected to increase from 38 percent in2007 to 42 percent in 2012. 4
  8. 8. 5
  9. 9. 5.7 Media Market SegmentationThe broad segmentation of print media in India is as below Out of House Print Television Radio Internet (OOH) MediaDetailed segmentation of Indian print media is as below.5.8 Indian Print Media:The history of Indian print media started in 1780, with the publication of the Bengal Gazette fromCalcutta. James Augustus Hickey is considered as the "father of Indian press" as he started the firstIndian 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 BombayCourier 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. On July 1, 1822 the firstGujarati newspaper the Bombay Samachar was published from Bombay, which is still extant. The first 6
  10. 10. Hindi newspaper, the Samachar Sudha Varshan began in 1854. Since then, the prominent Indianlanguages 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 ofnewspapers. The main reason is the marketing strategy followed by the regional papers, beginning withEenadu, a Telugu daily started by Ramoji Rao. The second reason is the growing literacy rate. Increase inthe 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 theirstate language and the first thing a literate person does is read papers and gain knowledge and hencehigher the literacy rate in a state the sales of the dominating regional paper in that state rises. The nextreason is localization of news. Indian regional papers have several editions for a particular State forcomplete localization of news for the reader to connect with the paper. Malayala Manorama has about10 editions in Kerala itself and six others outside Kerala. Thus regional papers aim at providing localizednews for their readers. Even Advertisers saw the huge potential of the regional paper market, partly dueto their own research and more due to the efforts of the regional papers to make the advertisers awareof the huge market.The Indian newspaper industry is one of the largest in the world. In 1997, the total number ofnewspapers and periodicals published was 41705, which include 4720 dailies and 14743 weeklies. Thehighest numbers of newspapers was published in Hindi, 16864. Newspapers in India are measured ontwo parameters, circulation and readership. Circulation is certified by the Audit Bureau of Circulationswhich 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 NationalReadership Survey (NRS). 7
  11. 11. In contrast to the US, UK and global trends, print circulation numbers in India continue to be on anuptrend. Furthermore, given rising literacy levels and no immediate threat of new media platforms, thetrend is expected to sustain over the next five years.The overall Indian Media and Entertainment sector is estimated to be INR 65,244 crore in 2010, withprint accounting for approximately 30 percent i.e. INR 19,288 crores of the total M&E revenues. It isexpected to grow at a CAGR of 10 percent reaching INR 31,010 crores in 2015.Complimentary and substitutes products: Complimentary good for print media is advertisements as itgives high revenues. Substitutes for print media are radio, television, e-papers, online newspaper, doorto door campaigns, exhibition, and pamphlet distribution.Product description and range of products: Newspapers uses column of varying width. Some have sixcolumns per page, while others have eight or nine which affects the size, shape, and costs of anadvertisement. Newspaper space rates vary with an advertiser’s special requests, such as preferredposition or color. 8
  12. 12. 6. MARKET ANALYSIS6.1 Market Definition:The print media consists of spending by advertisers on printed newspapers and magazines as well ascirculation revenues generated from readers’ spending on subscriptions and news-stand/retailpurchases of both segments.6.2 Market AnalysisIndia is one of the largest newspaper markets with more than 107 million copies circulated daily,surpassing China and accounting for more than 20 percent of all dailies in the world. The total literatepopulation in India is estimated to be 579 million media is a highly fragmented industry comprising of77,600 newspaper types in multiple languages and as of 2010, there were 613 pending newspaperrequests for registration .The Indian print market is well off in comparison to the global market, which iswitnessing a decline in print revenues over the past few years. Developed regions such as North Americaand UK are witnessing a significant decline in newspaper circulation while India defies the trend. 9
  13. 13. Print media contributes heavily to the overall Media and Entertainment revenue of India. This isdepicted by the graph below.Following is a list of the top 30 newspapers in India by daily circulation for the six month period ended2008.[2] These figures are compiled by the Audit Bureau of Circulations. DailyS.No. Newspaper Language City Owner Circulation Owned by Bennett,1 Times of India English Various cities and states 3.146 Coleman and Co. Ltd. Dainik Jagran Owned by Jagaran2 Hindi Various cities and states 2.168 Prakashan Ltd Malayala Manorama Various cities Owned by Malayala3 Malayalam in Kerala and a few other 1.514 Manorama Group cities Founded in 1878, owned by4 The Hindu English Various cities and states 1.360 Kasturi & Sons Ltd., exposed the Bofors scandal5 Deccan English Various cities and states 1.349 Owns Deccan 10
  14. 14. Chronicle Chargers franchise of the Indian Premier League Ananda Bazar Patrika Owned by Ananda6 Bengali Kolkata, West Bengal 1.277 Publishers Amar Ujala Mainly prominent in7 Hindi Various cities and states 1.230 the Hindi heartland Dainik Bhaskar Also published as the Divya8 Hindi Various cities and states 1.147 Bhaskar in Gujarat Hindustan9 English Various cities and states 1.143 Owned by HT Media Ltd Times Hindustan Hindi extension of10 Hindi Various cities and states 1.142 the Hindustan Times Eenadu Various cities in Andhra Run by Ramoji Raos Eenadu11 Telugu Pradesh and major cities 1.134 group, that also runs the inIndia ETV group of channels Various cities Mathrubhumi Owned by The12 Malayalam in Kerala and a few other 1.077 Mathrubhumi Group cities Gujarat Samachar Owned by Lok Prakashan13 Gujarati Ahmedabad, Gujarat 1.051 Ltd. Founder Jagat Narain was Punjab Kesari States assassinated by Sikh14 Hindi .902 of Punjab, Harayana militants on September 9, 1981 Dinakaran Various cities in Tamil Bought out by SUN15 Tamil Nadu and a few other .901 TV group in 2005 cities Sakaal Various cities Launched English version16 Marathi .879 in Maharashtra Sakaal Times in 2008 Dina Thanthi Various cities in Tamil17 Tamil Nadu and a few other .854 Founded by S. P. Adithanar cities Divya Bhaskar Gujarati version of the18 Gujarati Ahmedabad, Gujarat .840 Dainik Bhaskar 11
  15. 15. Aaj19 Hindi Varanasi, Uttar Pradesh .748 Economic Owned by Bennett,20 English Various cities and states .651 Times Coleman and Co. Ltd. Owned by Ananda21 The Telegraph English Various cities and states .465 Publishers Prajavani22 Kannada Karnataka .364 Owned by Prajavani The New Indian Owned by Express23 English Various cities and states .309 Express Publications Ltd.24 Deccan Herald English Various cities and states .214 Owned by The Printers Udayavani25 Kannada Karnataka .185 Owned by Udayavani Owned by The Statesman26 The Statesman English Various cities and states .172 Ltd. The Hindu Owned by Kasturi & Sons27 English Various cities and states .163 Business Line Ltd. Business Owned by Business28 English Various cities and states .144 Standard Standard Ltd. (BSL) Nav Kiran States 5467 Founder Smt Kunti Devi on29 Hindi of Haryana, Haryana Weekly April 12, 2010 12
  16. 16. 7. THE GROWTH STORY7.1 The growth figures:Unlike the global print industry, which is moving towards digitization and showing a negative growthyear on year, the Indian print media industry is going strong and is expected to continue similarly. Theprint industry in India, with over 90 million copies in circulation daily, is one of the largest in the world,second only to China (130 million copies). It is not to say that there has been no effort towardsdigitization and conversion to online readership, but there has not been much progress. Mostnewspapers have an online presence and a growing view count on their portals, but hard copy stillremains the preferred mode to access news. We do not expect any significant change in this trend overthe next five years. The print industry saw good growth last year, on the back of a recovering advertisingmarket and reduction in the gap between a ‘can read’ and ‘currently reading’ population. Increase inprint penetration in Tier 2 and Tier 3 cities, supported by growth in literacy and purchasing power, aidedgrowth in revenues. Circulation revenues showed marginal growth as many newspapers expanded innewer geographies but lowered cover price to gain readership. The newspaper industry, which hadremained largely flat in 2009, was back on the growth track with 11.7% growth taking this industrysegment to INR 159.5 billion in 2010 and increasing its share in the print industry to 89.3%.It was a pooryear for the magazine industry with marginal growth in advertising and almost no change in circulation.The size of the magazine publishing industry was estimated at INR 19.2 billion in 2010 as compared toINR 18.6 billion in 2009, registering a growth of 3.1%. The marginal growth was attributed to theconsumer magazine segment. While the growth estimates for the magazines look modest, some titlesand publishers have experienced double-digit growth while others have lagged behind.Overall, the size of this industry was INR 178.7 billion in 2010, registering a growth of 10.7% over INR161.5 billion in 2009. The print advertising, which constitutes 63% of revenue for the segment,registered a growth of 13.5% in 2010 over 2009 and stood at an estimated INR 113.5 billion in 2010.Circulation revenues for print grew by 6.2% in 2010 over 2009 and stood at an estimated INR 65.2 billionin 2010. The growth in circulation was largely contributed by players expanding into newer geographies.7.2 Outlook in brief • Hindi dailies continue to rule the roost with the highest growth in readership (AIR) as compared to 2009. They grew at the rate of nine per cent in 2010 as compared to three per cent in 2009. • Magazine circulation figures continue to suffer from the lack of proper measurement tools and most top magazines in India lost readership share. However, special interest magazines like business magazines showed positive signs and all the top five magazines in this category showed growth. 13
  17. 17. • Regional players are expected to grow at a brisk pace, both in terms of advertising revenue as well as market expansion. • Increase in newsprint prices are a concern for the industry and are likely to hit profitability in the current year. Increases in salaries recommended by the Wage Board can also affect profitability of smaller publishers. • Newspaper publishers are expected to continue to increase presence in the online format. However, print is not only here to stay for the next five years it is expected to show steady growth too.7.3 India’s place in the world:India is the second largest newspaper market in the world, after China. While globally the print industryis on a decline, the Indian print media is showing steady growth. The global newspaper market fell by0.3% in 2010 as declines in North America offset gains in other regions. Global print advertising fell by1.3% in 2010 and is expected to decline further by an additional 0.5% in 2011.7.4 Key developments7.4.1 Print Advertising:Growth in advertising but with more dilution in sectorsWith an economic revival, India’s advertising industry too revived. On the back of favorable macro-economic factors, print advertising bounced back and grew by 13.5% in 2010.Print volumes grew by 31% over 2009. While education was the top advertiser last year, this year itshifted to third position and services moved to the top position. The education sector was the top 14
  18. 18. performer in the first half of 2010 but other sectors caught up in the second half. The top five sectorscontributed 45% to the total pie as compared to 49% in 2009 leading to other sectors contributing moreto the growth of print advertising. BFSI also increased its share in 2010 as compared to 2009. • Print ad volumes of the services sector grew by 43% during 2010 as compared to 2009. • Print ad volumes of the BFSI sector grew by 50% during 2010 compared to 2009. • Print ad volumes of the education sector grew by six percent during 2010 compared to 2009 15
  19. 19. Educational institutions, socialadvertisements and properties/realestate were the top three categoriesin print advertising during 2010. Thetop 10 categories constituted 39%share of overall print ad pie during2010, indicating that there was awider distribution of advertisingspends across categories. 16
  20. 20. 7.4.2 Print circulation revenues:Cover price accounts for 15 to 25% of the revenues of newspaper players. Magazines look to earn morefrom the cover price and the price of niche magazines can go up to as much as INR 250. In 2010, therewas a growth of six per cent in circulation revenues. While many newspapers expanded geographicallyto increase their reach and readership, many others also reduced their cover price to tacklecompetition. Players expanding geographically launched a number of subscription schemes thus limitingthe increase in circulation revenues. In the next two to three years, as these schemes are withdrawn, wemay see even better circulation revenues. 17
  21. 21. 18
  22. 22. 19
  23. 23. 8. THE FALLOUT STAGEIt is difficult to smile, when there is little to cheer about.This was the prevailing sentiment in print media companies in India, and pretty much across theglobe, when they were bringing out papers on January 1, 2009.Nobody was sure how deep and wide the financial crisis was; how long the slowdown wouldcontinue; and more importantly, whether they would last it out.Looking back on the tumultuous year of 2009, it was a roller coaster ride for the Rs 16,200 crore (asper PricewaterhouseCoopers’ 2009 report) print media industry in India. The impact of the storm onthe sector, whose lifeline is advertising revenues, can be gauged from the fact that ad spends inIndia, as per Zenith Optimedia, grew 4.5 percent in 2009, compared to an 18.9 percent in 2008. Inaddition, the actual ad spend growth is lower than the 6.4 percent growth that Zenith Optimedia hadpredicted in the beginning of the year. But as they say, the show must go on.Unlike the West, there were few cases of newspapers being shut down. Most resorted to reducingcosts through job or salary cuts and reduction in the number of pages and supplements.On the other hand, new editions of newspapers, largely regional, were launched and Indian editionsof foreign magazines landed in the market as per plan. Local advertisers were chased andinnovations on product and sales side took place, among other things, to beat the slowdown blues.Products from newspaper companies catering to tier I and tier II cities, which were not as affected bythe slowdown as the metropolitan cities, registered growth. Overall, it was tough. But as newspaperowners look back, it wasn’t as bad as was anticipated.8.1 The big picture:The immediate response of any corporate to a downturn is to cut back on marketing spends. In 2009,there was a full-blown crisis at the global level and a major slowdown in India’s economic growth.Clocking more than 9 percent for the three years preceding 2008-09, India’s growth rate in 2008-09slowed down to 6.7 percent, as per government data.The situation in last three months of 2008 was similar to the first three months of 2009. The growthrate in both the quarters was 5.8 percent. The macroeconomic scenario did not look good and likemost of the sectors, India’s print media too suffered.A couple of events also helped print media companies counter the downturn. One of them was thesoftening of newsprint prices. For most organizations, however, the benefits of lower newsprintprices did not kick in immediately. The inventory procured at higher prices was being utilized for thefirst three to six months of the year.As per analysts, the cost of newsprint is roughly 50-55 percent of the total costs of newspaperpublishers. The year started with newsprint prices at around $750 a tonne. By April, the price wasdown to $570 per tonne and four months later, it went further south to $460 per tonne. The declinewas mainly on account of slack in demand, because many newspapers in the developed markets hadshut down. The situation was so grim that many newsprint mills were sold or shut down.In the last three months of the year, the prices started to firm up. The price for October-December2009 is $550 per tonne. From an average price of $ 750 per tonne up to October 2008; this year, theprice hovered between $450-525 per tonne.“Also, the rupee has become stronger now. So, over the course of the year, the situation hasimproved for newspaper companies in India,” said Anil Vig, managing director, Anika International, anewsprint importer.On the pricing front, economic conditions ensured that papers could not indulge in price wars. Mostnewspapers maintained a status quo or even hiked the cover price. “This is something good that 20
  24. 24. happened. Most newspaper owners agreed on not going in for a cut,” said Bharat Gupta, president –marketing, Dainik Jagran.The year had its share of good news and bad news. Metro Now, published by Metropolitan MediaCompany, a 50:50 joint venture between India’s two large media houses, Hindustan Times MediaLimited and BCCL, was shut down. It was restarted, but this time, it became a free supplement thatcame along with Hindustan Times and The Times of India. Mid-Day, too, scrapped its morning editionin Mumbai.Though most of the newspapers were cautious in their approach; expansion continued nonetheless.Non-English language dailies led the way, with at least 10 Hindi publications launching new editions.Nai Dunia group launched Sunday Nai Dunia in 10 cities and a youth supplement, Yuva, in Indore.Hindustan times launched the Allahabad and Bareily editions of its Hindi daily, Hindustan. Lokmatentered the Goa market; Rajasthan Patrika expanded its footprint in Madhya Pradesh with thelaunch of its Jabalpur edition; Dainik Jagran launched a ‘Rashtriya Sanskaran’, and also added newterritories to its weekly, City Plus.Among the English dailies, Hindustan Times went for a makeover right in the middle of the year andin December, tied up with Washington Post for content sharing. Its business daily, Mint, which has acontent sharing agreement with the Wall Street Journal, launched its Kolkata and Chennai editions.India’s largest English daily, The Times of India, launched its weekend edition, Crest. DNA introducedits Sunday supplement, The Mag.As it appears, there was more action in the non-English language space. The regional language pressperformed well this year. Hindi and regional dailies, broadly, showed growth in readership. Sincethey cater to tier I and II cities, they were more stable than the English dailies.HT Media, which, towards the end of the year, announced the de-merger of its Hindi business into aseparate company, has been seeing a growth of 25-30 percent in its Hindi venture, Hindustan. DainikBhaskar, which is a big player in the regional language market, came out with an IPO in December,which was oversubscribed 39 times. Dainik Jagran expects a minimum growth of 50 percent in FY2010 and double-digit growth in circulation revenues.According to Starcom Mediavest, of the total ad spends in print media, 10 percent went to theEnglish press, 25 percent to Hindi and the rest to regional languages. “The regional market isexpected to do better than national. The ad ratio for regional is far lower than national benchmarks.This divergence is expected to reduce over the years. This sector will continue to see interest fromboth financial and strategic investors,” said Mohit Ralhan, head – media & telecom investments,Baring Private Equity Partners India.An indicator of how newspapers did in 2009 is the readership. Round 2 (R2) of Indian ReadershipSurvey (IRS), which captures readership trends for the period, January-June 2009, showed anincrease in total readership (TR) of all newspapers combined, over the same period last year.The total readership of all English, Hindi and regional dailies combined in R2 2008 was 34.1 crore. Itincreased by 4.3 percent, to 35.6 crore, in R2 2009.Overall, the readership of English newspapers, and more so, the magazines, was hit harder. The TR ofall languages’ weeklies and monthlies combined dropped by 6.2 percent, between R2 2009 and R22008. In R2 2009, the TR was 10.29 crore, as opposed to a TR of 10.98 crore in R2 2008.The list of top 10 newspapers remains more or less stagnant, with five registering an increase inreadership; and five showing a decline.A key development in 2009 was the announcement of the merger between the National ReadershipStudies Council (NRSC), which publishes the National Readership Survey (NRS), and Media ResearchUsers Council (MRUC), which publishes IRS. 21
  25. 25. Overall, as per PricewaterhouseCoopers’ (PwC) report, after an average growth of 13.3 percent infour years up to 2008, the print media industry’s growth rate went down to 7.5 percent in 2008. In2009, it was expected to further slide down to 4.1 percent.Where is the money?Though the flow of advertising money into print media did not fall in 2009, the pace wasconsiderably reduced. According to TAM AdEx data, print ad volumes grew by 2 percent betweenJanuary-September 2009, as compared to the same period last year. In contrast, the ad volumes forthe same period in 2008 were 6 percent more than that in 2007.The initial months of 2009 were extremely difficult. “The earliest casualties were the supplementsand the extras. They reduced the number of pages day-by-day, and in some cases, they weremerged. Eventually, the newspapers became more and more thin without much advertisingsupport,” said RS Suryanaryanan, media director, Lintas Media Group.In the March-April period, educational institutes, primarily the private ones, engaged in aggressivemarketing and advertising to attract students. Newspapers were flooded with ads, so much so that,as per TAM AdEx, educational institutes became the largest advertiser, by volumes, across allcategories of print media. For the entire January-September period, they had the highest (18 percent) share.Another saving grace was the general elections. “The total media spends by all the political parties,national and regional, and candidates during the Lok Sabha elections, through formal and informaladvertising and bulk deals, would be around Rs 4,000 crore,” said Dr N Bhaskara Rao, chairman,Center for Media Studies. This, in a way, compensated for the lack of corporate advertising thatwould have otherwise existed, said one of the executives at a newspaper.The government too, as part of the stimulus package, in February 2009, announced a waiver of 15percent on agency commission and a 10 percent hike in DAVP (Directorate of Audio-Visual Publicity)rates. All central government ads were routed through DAVP. The rate hike was to last till the end ofJune, but the newspaper owners met the Information and Broadcasting minister, Ambika Soni, askingfor an extension till December, which was granted. The government also promised the industry anew Press Act. The government is in the process of making changes to the Press and Registration ofBooks (PRB) Act, 1967.“The year was better, May onwards. We had a good Diwali. Typically, post-Diwali, there is a lull. But acouple of telecom launches in Tamil Nadu, post Diwali, energised the scenario,” said KR Skandraaj,chief operating officer, Sovereign Media Marketing, publishers of Tamil newspaper, Daily Thanthi.The increasing action in the telecom space — entry of new players, existing players entering newterritories, mobile phone manufacturers launching new models and so on — benefited the mediacompanies.“Ad rates fell in the first quarter; but gradually strengthened, as the economy became stable and theadvertisers became aggressive,” said Tarun Deep Kumar, executive director, India - North, StarcomMediavest.The growth rate, nonetheless, had been slow and had hit the papers hard. “Overall growth of printmedia has gone down, because ad rates have come down substantially. They haven’t let circulationfall. It hasn’t grown either. They have clubbed it with different pricing strategies when it came to adrates. They were affected, because they weren’t getting the ad rates that they were used to,” saidTimmy Kandhari, director, media and entertainment division, PwC.“Because of recession, de-growth was expected. It was partly taken care of by elections and thefestive season, but there has been a drop in print spends. Magazines have suffered more thannewspapers. Newspapers have come back aggressively, with attractive packages and innovation,”said Anita Nayyar, chief executive officer, MPG. 22
  26. 26. She added that some media companies had come with 360-degree offerings, by pushing packagesacross various products of the company in a combination.Various newspapers introduced schemes and innovations in selling ad space. Dainik Jagaran, thecountry’s largest newspaper, launched the 9.9.9 scheme, in September, just before Diwali. Under thisscheme, a full page in Dainik Jagran cost Rs 9,99,999.“We got more than 100 full page ads. This provided us a bank, as typically, post-Diwali, advertisingfalls. It also attached us to a whole new set of clients and helped gain a market share exclusive toJagran,” said Bharat Gupta, president - marketing, Dainik Jagran.I Venkat, Director, Eenadu, which introduced zonal editions in all 294 constituencies at the time ofgeneral elections, added “One of the things that we had to do was to build confidence with theadvertiser. You cannot expect him to put money, just by selling a concept. We also got into smallerclients.”8.2 Creating buzz:The year also saw a number of Indian editions of foreign magazines being launched, the mostnotable being Forbes, Harpers Bazaar, CFO. Though they did create a buzz, media buyers said it’s tooearly to say whether they have been successful.“The launches gave the market a fillip, but sustainability will be an issue,” said Nayyar. The facsimileedition of Wall Street Journal also arrived this year. In addition, a few magazines were launched, suchas Open from the RPG group and Career 360 from 9.9 Mediaworx. “There has been slower uptake onmagazines. They might take a long time to break even,” said Kandhari of PwC. 23
  27. 27. 9. THE ROAD AHEAD AND THE CONCLUSIONS9.1 Dominant Factors Affecting Growth and Fallout:A) Increasing dependence on advertisingThe fortunes of the print industry in India are increasingly tied to those of the advertising industry,which in turn is correlated with nominal GDP growth. By 2015, we expect advertising to account forupwards of 75 percent of total revenues with circulation making up for the balance.B) RegionalizationIndustry participants agree that regionalization will gain prominence in the years ahead as a key growthdriver. One indicator to track this trend would be to track the revenue contributions from Vernacular,Hindi and English languages in the coming years. Traditionally English language revenues have enjoyed amajority share; however, revenues from regional languages (Hindi and Vernacular) will catch up withEnglish by 2015 erasing the historical advantage that English enjoyed.C) Industry Expansion and DiversificationWith a quicker than expected rebound in the economy last year, print players are looking to scale upthrough geographic and product expansions as well as foraying into digital delivery formats. Localizationof news through special editions has plenty of growth opportunities as well. We may see differentiatedmodels being developed by industry participants to generate additional revenue streams. Industryparticipants claim that localized and targeted advertising is difficult to achieve in nationwide broadcastmedia giving print an edge with respect to local businesses such as restaurants, malls, retail shops andneighborhood services.D) InnovationsIntuitively, story-boards for advertisers are more easily created and presented in audio-visual formats. Inorder to continue attracting a large share of the total advertising spends in India, print players haveintroduced several innovations to assist media planners in engaging their target audiences.E) Encouraging inbound investmentAdditional capital infusion into the print sector could lead to more aggressive expansion strategies,possibly more competition, quicker industry growth, and internal operational improvements.9.2 Trends • Hindi dailies grab the top three spots and continue to strengthen their position. • There is a growing trend of hyper localization in the print media. • Industry players are unbundling products to increase profitability. • New entrants are expanding readership in respective markets. • Niche and business magazines show robust growth. 24
  28. 28. 9.3 Issues • Fluctuating newsprint costs. • Ad-edit ratio up on account of profitability pressures. • Subscription schemes increasing dependence on advertising revenues. • New media yet to pose a threat to print industry.9.4 Conclusions • The industry was estimated to be INR 178.7 billion in 2010 showing a growth of 10.7% over 2009 numbers. • Hindi dailies continue to rule the roost with the highest growth in readership (AIR) as compared to 2009. It grew at the rate of nine per cent in 2010 as compared to three per cent in 2009. • Magazines continue to suffer from lack of measurement tools. • Regional players are expected to grow at a brisk pace, both in terms of advertising revenue as well as market expansion. • Newsprint prices are a major concern for the industry and players will need to guard themselves against major price fluctuations. • Newspaper publishers are expected to continue to increase their presence in the online format. However, print is likely to show steady growth for the next five years.The English language market is projected to grow by 7 percent where as Hindi is pegged at 11 percentand Vernacular languages at 12 percent given their larger reach and relevance to the emerginggeographies in India. The advertising growth rates of Hindi and vernacular segments are expected to behigher than that of English in line with the expected correction in advertisement premium disparity,going forward. 25