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A REPORT ON



THE 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
ACKNOWLEDGEMENT

I take this opportunity to extend my gratitude to the following worthy people who helped me in
successful 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 Water
Coopers) 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 impart
quality 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 Raha
EMBA
Batch 2011-13
SIBM, Bangalore




                                                                                                        ii
INDEX


S.NO.                                TOPIC    PAGE
1       Statement of the Problem                1
2.      Objectives                              1
3       Scope and Limitations                   1
4       Methodology                             1
5.      Introduction                            2
6.      Market Analysis                         9
7.      The Growth Story                       13
8.      The Fallout Stage                      20
9.      The Road Ahead and the Conclusions.    24




                                                     iii
1. STATEMENT OF THE PROJECT

The growth of Indian print media in the last decade and its fallouts

2. OBJECTIVES

        Market analysis of Indian print media
        The growth story
        The fallout stage
        The road ahead and the conclusions

3. SCOPE AND LIMITATIONS:

The report focuses on the study of Indian print media market, the trajectories of its growth and fallout in
the past decade and then discusses about the future path. The study is based on internet research and
sources have been thoroughly acknowledged. All the data, analytics and graphs have been taken from
surveys by established brands.

Even though only the inputs from standard surveys have been used in this study, the authenticity of the
data collected can be a possible limitation, in the absence of concrete evidence. Another limitation is the
lack of interaction with domain experts due to non-availability of ample amount of time and necessary
contacts. Moreover the topic covered is a gigantic one and covering all the aspects is beyond the scope
of the project timeline. Thus the report is not descriptive but concise and crisp in nature.


4. METHODOLOGY

Intense content search from internet has been used to collect the data. The study has been thoroughly
supported by charts and graphs for better level of comprehension.




                                                                                                         1
5. INTRODUCTION


India 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 Development
Indicators and has the third largest GDP in the entire continent of Asia. It is also the second largest
among emerging nations. (These indicators are based on purchasing power parity.) India is also one of
the few markets in the world which offers high prospects for growth and earning potential in practically
all areas of business. When the Economic Reforms were introduced in 1991, India chose to shift gear
from a closed, license- driven Economy to one, which embarked on globalization and economic
liberalization.

5.1 Printing 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.
Over the years, the printing industry has grown in all parts of the globe. The advent of TV and Internet
has not affected the growth of and requirement for printing professionals. The industry has made giant
strides 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 of
the jobs executed with the consequent enhancement of costs enormously. In fact, the arrival of
computers has complemented the printing business and has played a vital role in increasing its status as
a 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, India
initiated a process of reforms aimed at shedding protectionism and embracing liberalization of the
economy. Privatization was initiated with the aim of integrating the Indian economy with the world
economy. This change opened the doors for the Indian Print Industry to modernize, by investing in the
latest of technology and machinery. The average compound annual growth rate has been higher than
12% over the last 15 years. Our packaging industry is currently growing at a rate of more than 16% a
year. 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 progressive
printers of today are equipped with the latest computer controlled printing machines and flow lines for
binding, while state of the art digital technologies are being used in pre-press. Leading print companies
have optimized the use of information technology in each and every area of their business. These
printers 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 products
for the world markets. The quality standards have improved dramatically and immense production
capacities have been created. Some printers have won recognition by winning prizes at international
competition for excellence in printing. The current annual turnover of all the components in the Indian
printing 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 both
developed and developing. Indian exports of books, printed pamphlets, newspapers & periodicals, job
printing and printed materials during 2004-05 was estimated to the tune of USD 550 million.


                                                                                                          2
5.3 Hubs for Indian Printing Industry:

There is a set of industry players which are growing systematically and regularly. These kinds of set-ups
do not belong to any specific region of India but are scattered all over the country. The so-called clusters
of printing Industry are present in:

        North: Amritsar, Delhi, Faridabad
        West: Ahmedabad, Bombay
        South: Bangalore, Coimbatore, Madras

The publishing firms in the private sector are also quite large in number and these are scattered
throughout the country. But majority of these are very small in operation and each one of these may not
be producing more than a dozen titles in a year. These are also confined to producing titles in Indian
regional languages and catering to the needs of the local markets. Only a few (about 10%) of the
publishing concerns in India are reasonably large producing more than 50 titles annually and are
equipped 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 top
seven publishing nations.
Many printers are adopting newer and modern technologies. The growth of such organisations indicates
that recession is nothing but a changing trend towards adoption of new style of working. The modern
style of business is completely in favor of the consumers. It ensures that they get optimum quality
products at bare minimum price. Probably in all areas of life the consumers are getting products at most
competitive prices, which is definitely lower than yesterday’s prices and printing industry is no
exception. To meet this challenge, people in the printing industry have to find the solutions and not fret
on decline in prices. Some printers with a vision have already taken a step towards it and are able to
produce 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 improved
growth rate compared to 2009. The year was full of interesting developments with an influx of new
content distribution platforms, growing regional markets, surge in DTH subscriber base, and the
eventual 3G auction and rollouts. Over the next few years, these trends are expected to change the
dynamics of the M&E industry, and the future looks extremely promising! However, the media universe
is increasingly becoming more complex, specialized and fragmented. Today for media businesses, it has
become essential to understand rapidly changing consumer behavior and preferences. This learning
could then be utilized to help build focused content, marketing and delivery strategies for each target


                                                                                                          3
audience segment. Moreover, in order to become high performance enterprises, companies will need to
evolve in a manner in which they distribute content over secure platforms, optimize costs and adopt
best 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 an
overall 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 percent
to reach INR 1,275 billion by 2015. While television and print continue to dominate the Indian M&E
industry, sectors such as gaming, digital advertising, and animation VFX also show tremendous potential
in the coming years. By 2015, television is expected to account for almost half of the Indian M&E
industry revenues, and more than twice the size of print, the second largest media sector. The
contribution of advertising revenue to overall industry pie is expected to increase from 38 percent in
2007 to 42 percent in 2012.




                                                                                                      4
5
5.7 Media Market Segmentation

The broad segmentation of print media in India is as below



                                                                                           Out of House
        Print              Television              Radio               Internet
                                                                                           (OOH) Media



Detailed 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 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. On July 1, 1822 the first
Gujarati newspaper the Bombay Samachar was published from Bombay, which is still extant. The first

                                                                                                     6
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 localized
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. 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 Survey (NRS).




                                                                                                          7
In contrast to the US, UK and global trends, print circulation numbers in India continue to be on an
uptrend. Furthermore, given rising literacy levels and no immediate threat of new media platforms, the
trend 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, with
print accounting for approximately 30 percent i.e. INR 19,288 crores of the total M&E revenues. It is
expected 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 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
advertisement. Newspaper space rates vary with an advertiser’s special requests, such as preferred
position or color.




                                                                                                      8
6. MARKET ANALYSIS

6.1 Market Definition:

The print media consists of spending by advertisers on printed newspapers and magazines as well as
circulation revenues generated from readers’ spending on subscriptions and news-stand/retail
purchases of both segments.




6.2 Market Analysis

India 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 literate
population in India is estimated to be 579 million media is a highly fragmented industry comprising of
77,600 newspaper types in multiple languages and as of 2010, there were 613 pending newspaper
requests for registration .The Indian print market is well off in comparison to the global market, which is
witnessing a decline in print revenues over the past few years. Developed regions such as North America
and UK are witnessing a significant decline in newspaper circulation while India defies the trend.




                                                                                                         9
Print media contributes heavily to the overall Media and Entertainment revenue of India. This is
depicted by the graph below.




Following is a list of the top 30 newspapers in India by daily circulation for the six month period ended
2008.[2] These figures are compiled by the Audit Bureau of Circulations.


                                                                   Daily
S.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 Jagaran
2                        Hindi      Various cities and states   2.168
                                                                              Prakashan Ltd
        Malayala
        Manorama                   Various cities
                                                                              Owned by Malayala
3                        Malayalam in Kerala and a few other    1.514
                                                                              Manorama Group
                                   cities

                                                                              Founded in 1878, owned by
4       The Hindu        English    Various cities and states   1.360         Kasturi & Sons Ltd., exposed
                                                                              the Bofors scandal
5       Deccan           English    Various cities and states   1.349         Owns Deccan


                                                                                                       10
Chronicle                                                       Chargers franchise of
                                                                     the Indian Premier League
     Ananda Bazar
     Patrika                                                         Owned by Ananda
6                     Bengali    Kolkata, West Bengal        1.277
                                                                     Publishers


     Amar Ujala                                                      Mainly prominent in
7                     Hindi      Various cities and states   1.230
                                                                     the Hindi heartland
     Dainik Bhaskar                                                  Also published as the Divya
8                     Hindi      Various cities and states   1.147
                                                                     Bhaskar in Gujarat
     Hindustan
9                     English    Various cities and states   1.143   Owned by HT Media Ltd
     Times
     Hindustan                                                       Hindi extension of
10                    Hindi      Various cities and states   1.142
                                                                     the Hindustan Times

     Eenadu                      Various cities in Andhra            Run by Ramoji Rao's Eenadu
11                    Telugu     Pradesh and major cities    1.134   group, that also runs the
                                 inIndia                             ETV group of channels
                                Various cities
     Mathrubhumi                                                     Owned by The
12                    Malayalam in Kerala and a few other    1.077
                                                                     Mathrubhumi Group
                                cities
     Gujarat
     Samachar
                                                                     Owned by Lok Prakashan
13                    Gujarati   Ahmedabad, Gujarat          1.051
                                                                     Ltd.


                                                                     Founder Jagat Narain was
     Punjab Kesari               States                              assassinated by Sikh
14                    Hindi                                  .902
                                 of Punjab, Harayana                 militants on September 9,
                                                                     1981

     Dinakaran                   Various cities in Tamil
                                                                     Bought out by SUN
15                    Tamil      Nadu and a few other        .901
                                                                     TV group in 2005
                                 cities
     Sakaal                      Various cities                      Launched English version
16                    Marathi                                .879
                                 in Maharashtra                      Sakaal Times in 2008

     Dina Thanthi                Various cities in Tamil
17                    Tamil      Nadu and a few other        .854    Founded by S. P. Adithanar
                                 cities
     Divya Bhaskar                                                   Gujarati version of the
18                    Gujarati   Ahmedabad, Gujarat          .840
                                                                     Dainik Bhaskar



                                                                                                 11
Aaj
19                   Hindi     Varanasi, Uttar Pradesh     .748

     Economic                                                       Owned by Bennett,
20                   English   Various cities and states   .651
     Times                                                          Coleman and Co. Ltd.
                                                                    Owned by Ananda
21   The Telegraph English     Various cities and states   .465
                                                                    Publishers
     Prajavani
22                   Kannada   Karnataka                   .364     Owned by Prajavani

     The New Indian                                                 Owned by Express
23                  English    Various cities and states   .309
     Express                                                        Publications Ltd.
24   Deccan Herald English     Various cities and states   .214     Owned by The Printers
     Udayavani
25                   Kannada   Karnataka                   .185     Owned by Udayavani

                                                                    Owned by The Statesman
26   The Statesman English     Various cities and states   .172
                                                                    Ltd.
     The Hindu                                                      Owned by Kasturi & Sons
27                   English   Various cities and states   .163
     Business Line                                                  Ltd.
     Business                                                       Owned by Business
28                   English   Various cities and states   .144
     Standard                                                       Standard Ltd. (BSL)
     Nav Kiran                 States                      5467     Founder Smt Kunti Devi on
29                   Hindi
                               of Haryana, Haryana         Weekly   April 12, 2010




                                                                                              12
7. THE GROWTH STORY

7.1 The growth figures:

Unlike the global print industry, which is moving towards digitization and showing a negative growth
year on year, the Indian print media industry is going strong and is expected to continue similarly. The
print 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 towards
digitization and conversion to online readership, but there has not been much progress. Most
newspapers have an online presence and a growing view count on their portals, but hard copy still
remains the preferred mode to access news. We do not expect any significant change in this trend over
the next five years. The print industry saw good growth last year, on the back of a recovering advertising
market and reduction in the gap between a ‘can read’ and ‘currently reading’ population. Increase in
print penetration in Tier 2 and Tier 3 cities, supported by growth in literacy and purchasing power, aided
growth in revenues. Circulation revenues showed marginal growth as many newspapers expanded in
newer geographies but lowered cover price to gain readership. The newspaper industry, which had
remained largely flat in 2009, was back on the growth track with 11.7% growth taking this industry
segment to INR 159.5 billion in 2010 and increasing its share in the print industry to 89.3%.It was a poor
year 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 to
INR 18.6 billion in 2009, registering a growth of 3.1%. The marginal growth was attributed to the
consumer magazine segment. While the growth estimates for the magazines look modest, some titles
and 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 INR
161.5 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 billion
in 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
•   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 industry
is on a decline, the Indian print media is showing steady growth. The global newspaper market fell by
0.3% in 2010 as declines in North America offset gains in other regions. Global print advertising fell by
1.3% in 2010 and is expected to decline further by an additional 0.5% in 2011.




7.4 Key developments

7.4.1   Print Advertising:

Growth in advertising but with more dilution in sectors
With 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 it
shifted to third position and services moved to the top position. The education sector was the top

                                                                                                           14
performer in the first half of 2010 but other sectors caught up in the second half. The top five sectors
contributed 45% to the total pie as compared to 49% in 2009 leading to other sectors contributing more
to 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
Educational      institutions,  social
advertisements and properties/real
estate were the top three categories
in print advertising during 2010. The
top 10 categories constituted 39%
share of overall print ad pie during
2010, indicating that there was a
wider distribution of advertising
spends across categories.




                                   16
7.4.2   Print circulation revenues:

Cover price accounts for 15 to 25% of the revenues of newspaper players. Magazines look to earn more
from the cover price and the price of niche magazines can go up to as much as INR 250. In 2010, there
was a growth of six per cent in circulation revenues. While many newspapers expanded geographically
to increase their reach and readership, many others also reduced their cover price to tackle
competition. Players expanding geographically launched a number of subscription schemes thus limiting
the increase in circulation revenues. In the next two to three years, as these schemes are withdrawn, we
may see even better circulation revenues.




                                                                                                     17
18
19
8. THE FALLOUT STAGE

It 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 the
globe, 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 would
continue; 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 (as
per PricewaterhouseCoopers’ 2009 report) print media industry in India. The impact of the storm on
the sector, whose lifeline is advertising revenues, can be gauged from the fact that ad spends in
India, as per Zenith Optimedia, grew 4.5 percent in 2009, compared to an 18.9 percent in 2008. In
addition, the actual ad spend growth is lower than the 6.4 percent growth that Zenith Optimedia had
predicted 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 reducing
costs 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 editions
of foreign magazines landed in the market as per plan. Local advertisers were chased and
innovations 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 by
the slowdown as the metropolitan cities, registered growth. Overall, it was tough. But as newspaper
owners 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 2008-09
slowed 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 growth
rate in both the quarters was 5.8 percent. The macroeconomic scenario did not look good and like
most 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 the
softening of newsprint prices. For most organizations, however, the benefits of lower newsprint
prices did not kick in immediately. The inventory procured at higher prices was being utilized for the
first three to six months of the year.
As per analysts, the cost of newsprint is roughly 50-55 percent of the total costs of newspaper
publishers. The year started with newsprint prices at around $750 a tonne. By April, the price was
down to $570 per tonne and four months later, it went further south to $460 per tonne. The decline
was mainly on account of slack in demand, because many newspapers in the developed markets had
shut 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-December
2009 is $550 per tonne. From an average price of $ 750 per tonne up to October 2008; this year, the
price hovered between $450-525 per tonne.
“Also, the rupee has become stronger now. So, over the course of the year, the situation has
improved for newspaper companies in India,” said Anil Vig, managing director, Anika International, a
newsprint importer.
On the pricing front, economic conditions ensured that papers could not indulge in price wars. Most
newspapers maintained a status quo or even hiked the cover price. “This is something good that

                                                                                                         20
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 Media
Company, a 50:50 joint venture between India’s two large media houses, Hindustan Times Media
Limited and BCCL, was shut down. It was restarted, but this time, it became a free supplement that
came along with Hindustan Times and The Times of India. Mid-Day, too, scrapped its morning edition
in 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. Lokmat
entered the Goa market; Rajasthan Patrika expanded its footprint in Madhya Pradesh with the
launch of its Jabalpur edition; Dainik Jagran launched a ‘Rashtriya Sanskaran’, and also added new
territories to its weekly, City Plus.
Among the English dailies, Hindustan Times went for a makeover right in the middle of the year and
in December, tied up with Washington Post for content sharing. Its business daily, Mint, which has a
content 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 introduced
its Sunday supplement, The Mag.
As it appears, there was more action in the non-English language space. The regional language press
performed well this year. Hindi and regional dailies, broadly, showed growth in readership. Since
they 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 a
separate company, has been seeing a growth of 25-30 percent in its Hindi venture, Hindustan. Dainik
Bhaskar, 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 FY
2010 and double-digit growth in circulation revenues.
According to Starcom Mediavest, of the total ad spends in print media, 10 percent went to the
English press, 25 percent to Hindi and the rest to regional languages. “The regional market is
expected 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 from
both 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 Readership
Survey (IRS), which captures readership trends for the period, January-June 2009, showed an
increase 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. It
increased 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 of
all languages’ weeklies and monthlies combined dropped by 6.2 percent, between R2 2009 and R2
2008. 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 in
readership; and five showing a decline.
A key development in 2009 was the announcement of the merger between the National Readership
Studies Council (NRSC), which publishes the National Readership Survey (NRS), and Media Research
Users Council (MRUC), which publishes IRS.



                                                                                                         21
Overall, as per PricewaterhouseCoopers’ (PwC) report, after an average growth of 13.3 percent in
four years up to 2008, the print media industry’s growth rate went down to 7.5 percent in 2008. In
2009, 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 was
considerably reduced. According to TAM AdEx data, print ad volumes grew by 2 percent between
January-September 2009, as compared to the same period last year. In contrast, the ad volumes for
the 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 supplements
and the extras. They reduced the number of pages day-by-day, and in some cases, they were
merged. Eventually, the newspapers became more and more thin without much advertising
support,” said RS Suryanaryanan, media director, Lintas Media Group.
In the March-April period, educational institutes, primarily the private ones, engaged in aggressive
marketing 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 all
categories of print media. For the entire January-September period, they had the highest (18 per
cent) 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 informal
advertising 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 that
would 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 15
percent 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 of
June, but the newspaper owners met the Information and Broadcasting minister, Ambika Soni, asking
for an extension till December, which was granted. The government also promised the industry a
new Press Act. The government is in the process of making changes to the Press and Registration of
Books (PRB) Act, 1967.
“The year was better, May onwards. We had a good Diwali. Typically, post-Diwali, there is a lull. But a
couple 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 new
territories, mobile phone manufacturers launching new models and so on — benefited the media
companies.
“Ad rates fell in the first quarter; but gradually strengthened, as the economy became stable and the
advertisers became aggressive,” said Tarun Deep Kumar, executive director, India - North, Starcom
Mediavest.
The growth rate, nonetheless, had been slow and had hit the papers hard. “Overall growth of print
media has gone down, because ad rates have come down substantially. They haven’t let circulation
fall. It hasn’t grown either. They have clubbed it with different pricing strategies when it came to ad
rates. They were affected, because they weren’t getting the ad rates that they were used to,” said
Timmy Kandhari, director, media and entertainment division, PwC.
“Because of recession, de-growth was expected. It was partly taken care of by elections and the
festive season, but there has been a drop in print spends. Magazines have suffered more than
newspapers. Newspapers have come back aggressively, with attractive packages and innovation,”
said Anita Nayyar, chief executive officer, MPG.


                                                                                                          22
She added that some media companies had come with 360-degree offerings, by pushing packages
across various products of the company in a combination.
Various newspapers introduced schemes and innovations in selling ad space. Dainik Jagaran, the
country’s largest newspaper, launched the 9.9.9 scheme, in September, just before Diwali. Under this
scheme, 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, advertising
falls. It also attached us to a whole new set of clients and helped gain a market share exclusive to
Jagran,” said Bharat Gupta, president - marketing, Dainik Jagran.
I Venkat, Director, Eenadu, which introduced zonal editions in all 294 constituencies at the time of
general elections, added “One of the things that we had to do was to build confidence with the
advertiser. You cannot expect him to put money, just by selling a concept. We also got into smaller
clients.”

8.2 Creating buzz:

The year also saw a number of Indian editions of foreign magazines being launched, the most
notable being Forbes, Harpers Bazaar, CFO. Though they did create a buzz, media buyers said it’s too
early to say whether they have been successful.
“The launches gave the market a fillip, but sustainability will be an issue,” said Nayyar. The facsimile
edition of Wall Street Journal also arrived this year. In addition, a few magazines were launched, such
as Open from the RPG group and Career 360 from 9.9 Mediaworx. “There has been slower uptake on
magazines. They might take a long time to break even,” said Kandhari of PwC.




                                                                                                           23
9. THE ROAD AHEAD AND THE CONCLUSIONS


9.1 Dominant Factors Affecting Growth and Fallout:

A) Increasing dependence on advertising

The 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 for
upwards of 75 percent of total revenues with circulation making up for the balance.

B) Regionalization

Industry participants agree that regionalization will gain prominence in the years ahead as a key growth
driver. 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 a
majority share; however, revenues from regional languages (Hindi and Vernacular) will catch up with
English by 2015 erasing the historical advantage that English enjoyed.

C) Industry Expansion and Diversification

With a quicker than expected rebound in the economy last year, print players are looking to scale up
through geographic and product expansions as well as foraying into digital delivery formats. Localization
of news through special editions has plenty of growth opportunities as well. We may see differentiated
models being developed by industry participants to generate additional revenue streams. Industry
participants claim that localized and targeted advertising is difficult to achieve in nationwide broadcast
media giving print an edge with respect to local businesses such as restaurants, malls, retail shops and
neighborhood services.

D) Innovations

Intuitively, story-boards for advertisers are more easily created and presented in audio-visual formats. In
order to continue attracting a large share of the total advertising spends in India, print players have
introduced several innovations to assist media planners in engaging their target audiences.

E) Encouraging inbound investment

Additional 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
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 percent
and Vernacular languages at 12 percent given their larger reach and relevance to the emerging
geographies in India. The advertising growth rates of Hindi and vernacular segments are expected to be
higher than that of English in line with the expected correction in advertisement premium disparity,
going forward.




                                                                                                     25

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THE GROWTH OF INDIAN PRINT MEDIA IN THE LAST DECADE AND ITS FALLOUTS

  • 1. A REPORT ON THE 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. ACKNOWLEDGEMENT I take this opportunity to extend my gratitude to the following worthy people who helped me in successful 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 Water Coopers) 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 impart quality 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 Raha EMBA Batch 2011-13 SIBM, Bangalore ii
  • 3. INDEX S.NO. TOPIC PAGE 1 Statement of the Problem 1 2. Objectives 1 3 Scope and Limitations 1 4 Methodology 1 5. Introduction 2 6. Market Analysis 9 7. The Growth Story 13 8. The Fallout Stage 20 9. The Road Ahead and the Conclusions. 24 iii
  • 4. 1. STATEMENT OF THE PROJECT The growth of Indian print media in the last decade and its fallouts 2. OBJECTIVES Market analysis of Indian print media The growth story The fallout stage The road ahead and the conclusions 3. SCOPE AND LIMITATIONS: The report focuses on the study of Indian print media market, the trajectories of its growth and fallout in the past decade and then discusses about the future path. The study is based on internet research and sources have been thoroughly acknowledged. All the data, analytics and graphs have been taken from surveys by established brands. Even though only the inputs from standard surveys have been used in this study, the authenticity of the data collected can be a possible limitation, in the absence of concrete evidence. Another limitation is the lack of interaction with domain experts due to non-availability of ample amount of time and necessary contacts. Moreover the topic covered is a gigantic one and covering all the aspects is beyond the scope of the project timeline. Thus the report is not descriptive but concise and crisp in nature. 4. METHODOLOGY Intense content search from internet has been used to collect the data. The study has been thoroughly supported by charts and graphs for better level of comprehension. 1
  • 5. 5. INTRODUCTION India 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 Development Indicators and has the third largest GDP in the entire continent of Asia. It is also the second largest among emerging nations. (These indicators are based on purchasing power parity.) India is also one of the few markets in the world which offers high prospects for growth and earning potential in practically all areas of business. When the Economic Reforms were introduced in 1991, India chose to shift gear from a closed, license- driven Economy to one, which embarked on globalization and economic liberalization. 5.1 Printing 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. Over the years, the printing industry has grown in all parts of the globe. The advent of TV and Internet has not affected the growth of and requirement for printing professionals. The industry has made giant strides 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 of the jobs executed with the consequent enhancement of costs enormously. In fact, the arrival of computers has complemented the printing business and has played a vital role in increasing its status as a 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, India initiated a process of reforms aimed at shedding protectionism and embracing liberalization of the economy. Privatization was initiated with the aim of integrating the Indian economy with the world economy. This change opened the doors for the Indian Print Industry to modernize, by investing in the latest of technology and machinery. The average compound annual growth rate has been higher than 12% over the last 15 years. Our packaging industry is currently growing at a rate of more than 16% a year. 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 progressive printers of today are equipped with the latest computer controlled printing machines and flow lines for binding, while state of the art digital technologies are being used in pre-press. Leading print companies have optimized the use of information technology in each and every area of their business. These printers 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 products for the world markets. The quality standards have improved dramatically and immense production capacities have been created. Some printers have won recognition by winning prizes at international competition for excellence in printing. The current annual turnover of all the components in the Indian printing 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 both developed and developing. Indian exports of books, printed pamphlets, newspapers & periodicals, job printing and printed materials during 2004-05 was estimated to the tune of USD 550 million. 2
  • 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-ups do not belong to any specific region of India but are scattered all over the country. The so-called clusters of printing Industry are present in: North: Amritsar, Delhi, Faridabad West: Ahmedabad, Bombay South: Bangalore, Coimbatore, Madras The publishing firms in the private sector are also quite large in number and these are scattered throughout the country. But majority of these are very small in operation and each one of these may not be producing more than a dozen titles in a year. These are also confined to producing titles in Indian regional languages and catering to the needs of the local markets. Only a few (about 10%) of the publishing concerns in India are reasonably large producing more than 50 titles annually and are equipped 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 top seven publishing nations. Many printers are adopting newer and modern technologies. The growth of such organisations indicates that recession is nothing but a changing trend towards adoption of new style of working. The modern style of business is completely in favor of the consumers. It ensures that they get optimum quality products at bare minimum price. Probably in all areas of life the consumers are getting products at most competitive prices, which is definitely lower than yesterday’s prices and printing industry is no exception. To meet this challenge, people in the printing industry have to find the solutions and not fret on decline in prices. Some printers with a vision have already taken a step towards it and are able to produce 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 improved growth rate compared to 2009. The year was full of interesting developments with an influx of new content distribution platforms, growing regional markets, surge in DTH subscriber base, and the eventual 3G auction and rollouts. Over the next few years, these trends are expected to change the dynamics of the M&E industry, and the future looks extremely promising! However, the media universe is increasingly becoming more complex, specialized and fragmented. Today for media businesses, it has become essential to understand rapidly changing consumer behavior and preferences. This learning could then be utilized to help build focused content, marketing and delivery strategies for each target 3
  • 7. audience segment. Moreover, in order to become high performance enterprises, companies will need to evolve in a manner in which they distribute content over secure platforms, optimize costs and adopt best 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 an overall 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 percent to reach INR 1,275 billion by 2015. While television and print continue to dominate the Indian M&E industry, sectors such as gaming, digital advertising, and animation VFX also show tremendous potential in the coming years. By 2015, television is expected to account for almost half of the Indian M&E industry revenues, and more than twice the size of print, the second largest media sector. The contribution of advertising revenue to overall industry pie is expected to increase from 38 percent in 2007 to 42 percent in 2012. 4
  • 8. 5
  • 9. 5.7 Media Market Segmentation The broad segmentation of print media in India is as below Out of House Print Television Radio Internet (OOH) Media Detailed 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 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. On July 1, 1822 the first Gujarati newspaper the Bombay Samachar was published from Bombay, which is still extant. The first 6
  • 10. 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 localized 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. 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 Survey (NRS). 7
  • 11. In contrast to the US, UK and global trends, print circulation numbers in India continue to be on an uptrend. Furthermore, given rising literacy levels and no immediate threat of new media platforms, the trend 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, with print accounting for approximately 30 percent i.e. INR 19,288 crores of the total M&E revenues. It is expected 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 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 advertisement. Newspaper space rates vary with an advertiser’s special requests, such as preferred position or color. 8
  • 12. 6. MARKET ANALYSIS 6.1 Market Definition: The print media consists of spending by advertisers on printed newspapers and magazines as well as circulation revenues generated from readers’ spending on subscriptions and news-stand/retail purchases of both segments. 6.2 Market Analysis India 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 literate population in India is estimated to be 579 million media is a highly fragmented industry comprising of 77,600 newspaper types in multiple languages and as of 2010, there were 613 pending newspaper requests for registration .The Indian print market is well off in comparison to the global market, which is witnessing a decline in print revenues over the past few years. Developed regions such as North America and UK are witnessing a significant decline in newspaper circulation while India defies the trend. 9
  • 13. Print media contributes heavily to the overall Media and Entertainment revenue of India. This is depicted by the graph below. Following is a list of the top 30 newspapers in India by daily circulation for the six month period ended 2008.[2] These figures are compiled by the Audit Bureau of Circulations. Daily S.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 Jagaran 2 Hindi Various cities and states 2.168 Prakashan Ltd Malayala Manorama Various cities Owned by Malayala 3 Malayalam in Kerala and a few other 1.514 Manorama Group cities Founded in 1878, owned by 4 The Hindu English Various cities and states 1.360 Kasturi & Sons Ltd., exposed the Bofors scandal 5 Deccan English Various cities and states 1.349 Owns Deccan 10
  • 14. Chronicle Chargers franchise of the Indian Premier League Ananda Bazar Patrika Owned by Ananda 6 Bengali Kolkata, West Bengal 1.277 Publishers Amar Ujala Mainly prominent in 7 Hindi Various cities and states 1.230 the Hindi heartland Dainik Bhaskar Also published as the Divya 8 Hindi Various cities and states 1.147 Bhaskar in Gujarat Hindustan 9 English Various cities and states 1.143 Owned by HT Media Ltd Times Hindustan Hindi extension of 10 Hindi Various cities and states 1.142 the Hindustan Times Eenadu Various cities in Andhra Run by Ramoji Rao's Eenadu 11 Telugu Pradesh and major cities 1.134 group, that also runs the inIndia ETV group of channels Various cities Mathrubhumi Owned by The 12 Malayalam in Kerala and a few other 1.077 Mathrubhumi Group cities Gujarat Samachar Owned by Lok Prakashan 13 Gujarati Ahmedabad, Gujarat 1.051 Ltd. Founder Jagat Narain was Punjab Kesari States assassinated by Sikh 14 Hindi .902 of Punjab, Harayana militants on September 9, 1981 Dinakaran Various cities in Tamil Bought out by SUN 15 Tamil Nadu and a few other .901 TV group in 2005 cities Sakaal Various cities Launched English version 16 Marathi .879 in Maharashtra Sakaal Times in 2008 Dina Thanthi Various cities in Tamil 17 Tamil Nadu and a few other .854 Founded by S. P. Adithanar cities Divya Bhaskar Gujarati version of the 18 Gujarati Ahmedabad, Gujarat .840 Dainik Bhaskar 11
  • 15. Aaj 19 Hindi Varanasi, Uttar Pradesh .748 Economic Owned by Bennett, 20 English Various cities and states .651 Times Coleman and Co. Ltd. Owned by Ananda 21 The Telegraph English Various cities and states .465 Publishers Prajavani 22 Kannada Karnataka .364 Owned by Prajavani The New Indian Owned by Express 23 English Various cities and states .309 Express Publications Ltd. 24 Deccan Herald English Various cities and states .214 Owned by The Printers Udayavani 25 Kannada Karnataka .185 Owned by Udayavani Owned by The Statesman 26 The Statesman English Various cities and states .172 Ltd. The Hindu Owned by Kasturi & Sons 27 English Various cities and states .163 Business Line Ltd. Business Owned by Business 28 English Various cities and states .144 Standard Standard Ltd. (BSL) Nav Kiran States 5467 Founder Smt Kunti Devi on 29 Hindi of Haryana, Haryana Weekly April 12, 2010 12
  • 16. 7. THE GROWTH STORY 7.1 The growth figures: Unlike the global print industry, which is moving towards digitization and showing a negative growth year on year, the Indian print media industry is going strong and is expected to continue similarly. The print 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 towards digitization and conversion to online readership, but there has not been much progress. Most newspapers have an online presence and a growing view count on their portals, but hard copy still remains the preferred mode to access news. We do not expect any significant change in this trend over the next five years. The print industry saw good growth last year, on the back of a recovering advertising market and reduction in the gap between a ‘can read’ and ‘currently reading’ population. Increase in print penetration in Tier 2 and Tier 3 cities, supported by growth in literacy and purchasing power, aided growth in revenues. Circulation revenues showed marginal growth as many newspapers expanded in newer geographies but lowered cover price to gain readership. The newspaper industry, which had remained largely flat in 2009, was back on the growth track with 11.7% growth taking this industry segment to INR 159.5 billion in 2010 and increasing its share in the print industry to 89.3%.It was a poor year 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 to INR 18.6 billion in 2009, registering a growth of 3.1%. The marginal growth was attributed to the consumer magazine segment. While the growth estimates for the magazines look modest, some titles and 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 INR 161.5 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 billion in 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. 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 industry is on a decline, the Indian print media is showing steady growth. The global newspaper market fell by 0.3% in 2010 as declines in North America offset gains in other regions. Global print advertising fell by 1.3% in 2010 and is expected to decline further by an additional 0.5% in 2011. 7.4 Key developments 7.4.1 Print Advertising: Growth in advertising but with more dilution in sectors With 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 it shifted to third position and services moved to the top position. The education sector was the top 14
  • 18. performer in the first half of 2010 but other sectors caught up in the second half. The top five sectors contributed 45% to the total pie as compared to 49% in 2009 leading to other sectors contributing more to 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. Educational institutions, social advertisements and properties/real estate were the top three categories in print advertising during 2010. The top 10 categories constituted 39% share of overall print ad pie during 2010, indicating that there was a wider distribution of advertising spends across categories. 16
  • 20. 7.4.2 Print circulation revenues: Cover price accounts for 15 to 25% of the revenues of newspaper players. Magazines look to earn more from the cover price and the price of niche magazines can go up to as much as INR 250. In 2010, there was a growth of six per cent in circulation revenues. While many newspapers expanded geographically to increase their reach and readership, many others also reduced their cover price to tackle competition. Players expanding geographically launched a number of subscription schemes thus limiting the increase in circulation revenues. In the next two to three years, as these schemes are withdrawn, we may see even better circulation revenues. 17
  • 21. 18
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  • 23. 8. THE FALLOUT STAGE It 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 the globe, 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 would continue; 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 (as per PricewaterhouseCoopers’ 2009 report) print media industry in India. The impact of the storm on the sector, whose lifeline is advertising revenues, can be gauged from the fact that ad spends in India, as per Zenith Optimedia, grew 4.5 percent in 2009, compared to an 18.9 percent in 2008. In addition, the actual ad spend growth is lower than the 6.4 percent growth that Zenith Optimedia had predicted 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 reducing costs 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 editions of foreign magazines landed in the market as per plan. Local advertisers were chased and innovations 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 by the slowdown as the metropolitan cities, registered growth. Overall, it was tough. But as newspaper owners 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 2008-09 slowed 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 growth rate in both the quarters was 5.8 percent. The macroeconomic scenario did not look good and like most 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 the softening of newsprint prices. For most organizations, however, the benefits of lower newsprint prices did not kick in immediately. The inventory procured at higher prices was being utilized for the first three to six months of the year. As per analysts, the cost of newsprint is roughly 50-55 percent of the total costs of newspaper publishers. The year started with newsprint prices at around $750 a tonne. By April, the price was down to $570 per tonne and four months later, it went further south to $460 per tonne. The decline was mainly on account of slack in demand, because many newspapers in the developed markets had shut 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-December 2009 is $550 per tonne. From an average price of $ 750 per tonne up to October 2008; this year, the price hovered between $450-525 per tonne. “Also, the rupee has become stronger now. So, over the course of the year, the situation has improved for newspaper companies in India,” said Anil Vig, managing director, Anika International, a newsprint importer. On the pricing front, economic conditions ensured that papers could not indulge in price wars. Most newspapers maintained a status quo or even hiked the cover price. “This is something good that 20
  • 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 Media Company, a 50:50 joint venture between India’s two large media houses, Hindustan Times Media Limited and BCCL, was shut down. It was restarted, but this time, it became a free supplement that came along with Hindustan Times and The Times of India. Mid-Day, too, scrapped its morning edition in 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. Lokmat entered the Goa market; Rajasthan Patrika expanded its footprint in Madhya Pradesh with the launch of its Jabalpur edition; Dainik Jagran launched a ‘Rashtriya Sanskaran’, and also added new territories to its weekly, City Plus. Among the English dailies, Hindustan Times went for a makeover right in the middle of the year and in December, tied up with Washington Post for content sharing. Its business daily, Mint, which has a content 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 introduced its Sunday supplement, The Mag. As it appears, there was more action in the non-English language space. The regional language press performed well this year. Hindi and regional dailies, broadly, showed growth in readership. Since they 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 a separate company, has been seeing a growth of 25-30 percent in its Hindi venture, Hindustan. Dainik Bhaskar, 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 FY 2010 and double-digit growth in circulation revenues. According to Starcom Mediavest, of the total ad spends in print media, 10 percent went to the English press, 25 percent to Hindi and the rest to regional languages. “The regional market is expected 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 from both 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 Readership Survey (IRS), which captures readership trends for the period, January-June 2009, showed an increase 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. It increased 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 of all languages’ weeklies and monthlies combined dropped by 6.2 percent, between R2 2009 and R2 2008. 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 in readership; and five showing a decline. A key development in 2009 was the announcement of the merger between the National Readership Studies Council (NRSC), which publishes the National Readership Survey (NRS), and Media Research Users Council (MRUC), which publishes IRS. 21
  • 25. Overall, as per PricewaterhouseCoopers’ (PwC) report, after an average growth of 13.3 percent in four years up to 2008, the print media industry’s growth rate went down to 7.5 percent in 2008. In 2009, 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 was considerably reduced. According to TAM AdEx data, print ad volumes grew by 2 percent between January-September 2009, as compared to the same period last year. In contrast, the ad volumes for the 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 supplements and the extras. They reduced the number of pages day-by-day, and in some cases, they were merged. Eventually, the newspapers became more and more thin without much advertising support,” said RS Suryanaryanan, media director, Lintas Media Group. In the March-April period, educational institutes, primarily the private ones, engaged in aggressive marketing 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 all categories of print media. For the entire January-September period, they had the highest (18 per cent) 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 informal advertising 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 that would 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 15 percent 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 of June, but the newspaper owners met the Information and Broadcasting minister, Ambika Soni, asking for an extension till December, which was granted. The government also promised the industry a new Press Act. The government is in the process of making changes to the Press and Registration of Books (PRB) Act, 1967. “The year was better, May onwards. We had a good Diwali. Typically, post-Diwali, there is a lull. But a couple 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 new territories, mobile phone manufacturers launching new models and so on — benefited the media companies. “Ad rates fell in the first quarter; but gradually strengthened, as the economy became stable and the advertisers became aggressive,” said Tarun Deep Kumar, executive director, India - North, Starcom Mediavest. The growth rate, nonetheless, had been slow and had hit the papers hard. “Overall growth of print media has gone down, because ad rates have come down substantially. They haven’t let circulation fall. It hasn’t grown either. They have clubbed it with different pricing strategies when it came to ad rates. They were affected, because they weren’t getting the ad rates that they were used to,” said Timmy Kandhari, director, media and entertainment division, PwC. “Because of recession, de-growth was expected. It was partly taken care of by elections and the festive season, but there has been a drop in print spends. Magazines have suffered more than newspapers. Newspapers have come back aggressively, with attractive packages and innovation,” said Anita Nayyar, chief executive officer, MPG. 22
  • 26. She added that some media companies had come with 360-degree offerings, by pushing packages across various products of the company in a combination. Various newspapers introduced schemes and innovations in selling ad space. Dainik Jagaran, the country’s largest newspaper, launched the 9.9.9 scheme, in September, just before Diwali. Under this scheme, 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, advertising falls. It also attached us to a whole new set of clients and helped gain a market share exclusive to Jagran,” said Bharat Gupta, president - marketing, Dainik Jagran. I Venkat, Director, Eenadu, which introduced zonal editions in all 294 constituencies at the time of general elections, added “One of the things that we had to do was to build confidence with the advertiser. You cannot expect him to put money, just by selling a concept. We also got into smaller clients.” 8.2 Creating buzz: The year also saw a number of Indian editions of foreign magazines being launched, the most notable being Forbes, Harpers Bazaar, CFO. Though they did create a buzz, media buyers said it’s too early to say whether they have been successful. “The launches gave the market a fillip, but sustainability will be an issue,” said Nayyar. The facsimile edition of Wall Street Journal also arrived this year. In addition, a few magazines were launched, such as Open from the RPG group and Career 360 from 9.9 Mediaworx. “There has been slower uptake on magazines. They might take a long time to break even,” said Kandhari of PwC. 23
  • 27. 9. THE ROAD AHEAD AND THE CONCLUSIONS 9.1 Dominant Factors Affecting Growth and Fallout: A) Increasing dependence on advertising The 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 for upwards of 75 percent of total revenues with circulation making up for the balance. B) Regionalization Industry participants agree that regionalization will gain prominence in the years ahead as a key growth driver. 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 a majority share; however, revenues from regional languages (Hindi and Vernacular) will catch up with English by 2015 erasing the historical advantage that English enjoyed. C) Industry Expansion and Diversification With a quicker than expected rebound in the economy last year, print players are looking to scale up through geographic and product expansions as well as foraying into digital delivery formats. Localization of news through special editions has plenty of growth opportunities as well. We may see differentiated models being developed by industry participants to generate additional revenue streams. Industry participants claim that localized and targeted advertising is difficult to achieve in nationwide broadcast media giving print an edge with respect to local businesses such as restaurants, malls, retail shops and neighborhood services. D) Innovations Intuitively, story-boards for advertisers are more easily created and presented in audio-visual formats. In order to continue attracting a large share of the total advertising spends in India, print players have introduced several innovations to assist media planners in engaging their target audiences. E) Encouraging inbound investment Additional 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. 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 percent and Vernacular languages at 12 percent given their larger reach and relevance to the emerging geographies in India. The advertising growth rates of Hindi and vernacular segments are expected to be higher than that of English in line with the expected correction in advertisement premium disparity, going forward. 25