Print media as a traditional media plays a significant role in the development communication of a country. The Government often relies on print media to secure wide coverage of messages through various newspapers and journals. In India, print media strengths have largely been shaped by its historical experience and, in particular, by its association with the freedom struggle as well as movements for social emancipation, reform, and amelioration. At present various modern and sophisticated technologies are using by the print media in both developed and under-developed countries and they also face stiff competition from electronic media.
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. And 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. 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. And any significant change in this trend over the next five years is not expected. Today the total literate population in India is estimated to be 579 million with over 30 percent readership penetration. The Indian print 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.
Market Analysis of Indian Print Media and study of its Evolution Strategies. 3. SCOPE OF THE PROJECT
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 all the data, analytics and graphs have been taken from surveys by established brands. 4. METHODOLOGY
The Methodology involved data collection from Secondary sources. Intense content search from internet has been used to collect the information. The study has been thoroughly supported by charts and graphs for better level of comprehension. Reports from TAM media research, moneycontrol.com, AdEx India, Centre for monitoring Indian economy, research papers, respective companies’ website, books and articles were also taken into consideration.
5. REVIEW OF THE INDUSTRY
5.1 Media and Entertainment Sector
India is one of the largest media consuming markets in the world. The Indian media and entertainment (M&E) industry is one of the fastest growing industries. Before moving further let us first understand the terms Media and Entertainment. Media is the medium of communication. Whereas Entertainment is an action, event or activity that aims to entertain, amuse and interest public. As per a recent report by PWC India is certainly on the verge to witness major growth in E&M industry after only to China. The M&E industry is expected to reach a CAGR of 14 percent i.e. INR 1,275 billion by 2015 (SOURCE: ficcikpmg report 2011). This can be attributed to the growing subscription revenues, resurgence in advertising and emergence of new profitable avenues . The emerging avenues brings with it added burden of understanding the market and building appropriate strategies. The industry is witnessing the mushrooming of new players and wide shift in their offerings.
There are still more than 250 channels awaiting approval, the demand is also expected to grow due to the expansion of DTH channels, expected rise in advertising to GDP ratio etc. In the year 2011, this industry registered a growth of 12 percent over 2010 and reached INR 728 billion. The universe of media is rapidly becoming more niche, fragmented and complex in their needs and behavior. Today’s consumer is looking for content. Hence, we can conclude that the rules of engagement have changed. Further, with the explosion of digital content, increasing bandwidth, wide number of players, consumers have huge volumes of magnitude and choices of content, much of which was then available for free–or at no extra cost above cost of access. This gives the industry an opportunity to invest more on content because the consumers would pay higher price for it as compared to the previous years. The global trends have indicated that Television would still remain dominant in terms of media consumption. It is projected that the television advertising industry will command a share of 42.5% in 2015.
The Indian film industry has also seen a jump from traditional movies to movies like Ra.One, Robot , Rio , Ramayanam etc. which imbibed 3D animation , visual effects and Animation was greatly appreciated by the Indian Viewers. The awaiting launch of Phase III radio licenses in the end of August 2012. (SOURCE: dxersguide) has lead to a healthy growth at a CAGR of 19.2 % over 2010-15. (SOURCE: www.pwc.in/india). In terms of the share of the advertisement pie, it is projected that the radio advertising industry will be able to increase its share from 4.4% to 6.3% in the next five years. The introduction of 3G, Mobile VAS will lead to growth in the music industry. The Indian print media industry is also projected to grow by 9.6% (2010-15) though magazines are expected to face rise in competition in the near future. The OOH industry after showing a dip in the economic slowdown of 2009 has maintained a slow pace of growth and is projected to reach INR 24 billion in 2015. 5.2 Industry Size and Projections:
The Indian M&E industry showed a growth of INR 12 percent as it grew from INR 728 Billion in 2011 from INR 652 Billion in 2010.
(SOURCE: kpmg India analysis 2012)
From the above Table we can deduce that Television gearing up for expanding broadcasters and digitization due to the widening penetration in Tier II and Tier III cities because of the rise in regional media. Print market is awaiting the launch of Phase III radio licenses in the end of August 2012 to expand its reach and improve market share. The up holds a major share and sectors like radio, animation, gaming, VFX are also showing a healthy growth. On the other hand Film Industry crossed a 30 crores mark in C&S rights and a 100 Crore mark in domestic theatrical collections. Digital advertising has immense scope of further innovation and development hence it continues to display a very high growth rate.
5.3 Advertising trends
The journey of M&E industry was not always so smooth. In the year 2009 it felt the brunt of recession. The sounds of losses and cut downs echoed all around as the industry suffered badly with layoffs, cut down on manpower, increasing losses, shooting prices etc. Sectors such as Radio, Print, Outdoor and TV were largely affected due their dependence on advertising revenues. Even after the subdued performance of 2009 the media and entertainment industry didn’t succumb to it and bravely sailed through recession to witness a healthy rate of subscription and rising advertisement revenue ahead.
Contribution of advertising revenues of overall industry size:
(SOURCE: KPMG in India analysis and industry interviews)
The Indian M&E industry has largely been depended on advertisement revenue. In contrary to 17 percent growth of 2010 , advertising revenues witnessed a growth of 13 percent in 2011. We can conclude from the above table that print seems to be the largest contributor to the advertising pie by contributing INR 139 Billion. The share of subscription revenues, ARPU for TV, average newspaper cost for print etc. continues to remains small. It is anticipated to witness an increase after the implementation of digital addressability and the launch of Phase III radio licenses by the end of August 2012 and further development in these markets.
5.5 Macro Environment of M&E industry
Like every other industry even media and entertainment industry could not escape the effects of local, national and international policies and procedures. Political changes have helped reduce the entry barriers which helped the industry witness hyper competition due to entry of local and global players.
India is a developing nation, it’s growing population continues to create demand. Moreover the rising per capita income of viewers lead to increasing purchasing power, acting as an important economical factor. With the change in spending patterns and purchasing behavior of consumer play a vital role in changing the strategies accordingly. Almost all the segments of media and entertainment industry witnessed either a dip or flat growth in revenue in the economic slowdown of the year 2009. The industry has slowly recovered from the effects of recession and is now opening new ways of growth and development.
Legal factors play a vital role in boosting up the growth of the industry and reducing barriers of development. The changes in the legal environment of the country have encouraged both existing as well as new players. The government’s thrust on digitization to increase the pace of digitization seems to grow DTH and digital cable . The liberalization of FDI norms has helped in reducing entry barriers and gave a push to investment. The auction of phase III of radio will help in adding approximately 700 licenses across tier III and tier II cities. Also more than 250 channels are waiting approval for broadcasting. Thus it could be rightly said that this industry has ample scope of growth and development in future.
Socio- Cultural Factors
The social structure and norm brings with itself the need to keep pace with it in order to sustain in the ever changing environment. This change may pose threat or open new opportunities of business. From joint families to nuclear , migration of rural population to urban areas, growing awareness, rising literacy rates, changing taste and preferences all these factors majorly effect the working of the industry. Today people demand niche programs, channels and more varieties. Hence the broadcasters are focusing on content innovation by offering niche channels , even radio is spreading its reach by penetrating rural areas and creating shows that are target on Tier I and Tier II cities.
Media and entertainment industry has come a long way and is still evolving. Media consumption has taken new directions with constant innovation in this field. The conventional mediums of media consumption is slowly getting replaced with upcoming smart phones, tablets, internet. This market is growing at a high rate. It is expected that by the year 2016 Installed Internet enabled smart phones in India could reach approximately to INR 264 million. (SOURCE: IDC Q3 2011 Mobile Phone Tracker release). New media such as Animation / VFX, digital advertising, and gaming are expected to continue their growth momentum.
5.6 Porters five forces model
Porters five forces model represent those factors that are close to the company. These five forces help in determining the competitive intensity. It can also be referred as micro environment forces.
Threat of new entrants: HIGH
* Unsaturated Media and entertainment industry
* High growth opportunities in almost all segments of M&E industry
* Explosion of digital content
* Huge untapped demand
* Increasing bandwidth
* Increasing Market size
Bargaining Power of buyers: HIGH
* Low switching cost
* High brand switching among viewers due to wide range of choices of content * Increasing affordability of viewers due to wider availability of alternative sources of entertainment * Growing Awareness and urbanization
Threat of substitutes: HIGH
* Untapped demand
* Increasing size of market
* Vast scope of growth as M&E industry is expected to reach a CAGR of 14 percent i.e. INR 1,275 billion by 2015 ( source: ficcikpmg report 2011 ). * Constant innovation and development leading to new and better availability of Substitutes.
Bargaining power of suppliers: LOW
* Reducing bargaining power due to increasing number of content providers * Introduction of various mediums of media consumption ( Smart phones, Tablets, Internet etc)
* Increasing number of choices for consumers
* Availability of alternative sources for free–or at no extra cost above cost of access.
Rivalry among existing competitors: HIGH
* The universe of media is rapidly becoming more and more niche
* Fragmented media and entertainment market
* Complex needs and behavior of consumers
* Increasing brand switch of consumers
* Falling bargaining power of suppliers
The scope for growth, increasing demand for better content , growing competition are the major reasons which compels the players of media and entertainment industry to constantly innovate. It would not only help the players to increase their profit margins, build strong fencing around them against competitors but also help them to reduce brand switch.
Unlike the cluttered market, media and entertainment industry is now moving towards niche marketing strategies. They are successful in adopting this strategy by penetrating deeper into the market and offering niche entertainment to each homogeneous segment. This huge shift has come due to the ever changing needs, demands and wants of the country . Each strata of society is carefully taken care of, with new niche channel genres like fashion, movies , food , travel etc.
The huge scope of growth of media and entertainment industry lures new players to enter into the market . This latent demand offers a vast scope of development and hence the Industry is witnessing new entrants from various other sectors as well as huge foreign direct investments. A flurry of deals stimulated the sector in recent days with media saying Mukesh Ambani controlled Reliance was looking at buying into Network18, which runs CNBC India. Also reports of Chemical and fertiliser company Oswal Green Tech buying a 14.17% shareholding in New Delhi Television (NDTV) through two block stock market deals were etc. (SOURCE:The EconomicsTimes Media/Entertainment)
The M&E industry is highly driven by strong consumption in non-metro and small cities compelling the players to spread their reach geographically . This would intensify competition . on the other hand the regional players have reached scale and now planning to build a PAN India presence by going national . This shift can be attributed to the growing awareness, increasing literacy , and rising purchasing power.
As the technology improved the term digitization emerged . It brought with it scope of increasing viewership base. A rise in the adoption of digital prints over physical were seen in films. DTH helped in adding 12 million subscribers in the year 2010 i.e. 75 percent growth. With the regulatory push on digitization, ongoing 3G rollouts, increasing mobile and broadband penetration, the market for digital distribution platforms is only expected to grow.
The way of media consumption changed with the collaboration of media and technology. Smart phones, tablets, PCs, gaming devices were slowly entering Indian Market. This can be seen by the change in the consumption pattern of consumers from conventional mediums to the new medium provided by the telecom service providing companies due to the 2G and 3G, launch of I phones, tablets , Mobile Note pads , emerging gaming platforms. This constant innovation in technology has led to the growth of media and entertainment sector greatly.
Regulation to drive growth
The changes in the legal environment of the country have encouraged the existing as well as new players. The government’s plunge on digitization for cable television to increase the pace of digitization seems to grow DTH and digital cable. Hence legal factors play an important role in widening the scope of growth of the industry.
The Indian market is highly fragmented market . This leads to the emergence of segmenting the market into homogeneous groups to be able to cater the different needs of the consumers . Due to which the media and entertainment sector witnesses immense competition , price wars , content wars , brand switch etc. Hence to be able to meet the consumer’s perception , understanding of the consumers needs , wants and demands is very crucial.
6. ANALYSIS OF PRINT MEDIA
Print is the second largest contributor to the overall M&E industry revenues. By the year 2015 it is expected to become the largest contributor of advertising revenue. The print industry grew by 8.4 % in the year 2011 i.e. INR 209 Billion from INR 193 Billion of 2010. After facing a small dip in the year 2009 due to the depressed macro environment , the industry bounced back to show a healthy growth rate in the coming years.
The number of advertisers increased by 22 percent in the year 2011 and the Ad Volumes increased by 13 percent in 2011. The major advertisers were from education sector, Automobile , FMCG , Real Estate , BFSI etc. This increasing number of advertisers and the increasing ad volumes is due to the shift in country’s demographics. The percentage of literacy is going up, even today the penetration of internet in rural areas is not much as compared to the reach of print media.
From the table given we can see that education, BFSI , Retail , telecom and media have seen a dip in the year 2011 as compared to 2010. Whereas Automobiles, FMCG , corporate and rest others have increased their spend on print advertisement. Similar to television even in print FMCG sector is one of the major advertisers, with 8.9 percent spend in the year 2011 out of which household contributed (3.1 percent), personal care (5.5 percent) and impulses category ( 0.3 percent ). These Ad spends are in line with the growth of their respective sectors. Looking at the current economic conditions of the country it would not be wrong to say that huge scope of growth and development still awaits.
Print has been the medium of choice by the majority of advertisers. The Education Sector, Closely followed by Automobile and FMCG leads the share of print advertisements. The major source of revenue has been Newspaper industry with an INR197 contributing immensely to the pie and Magazine industry stands at second position with an INR 13 Billion.
There is a lot of hope in this sector with the expanding size of the pie as the players are expanding their reach from metros to Tier I and Tier II cities to serve niche readers at regional level.
6.1 NEWSPAPER PUBLISHING
The newspaper publishing industry boasts of more than 180 million readers (AIR) in 2010 as compared to 173 million (AIR) in 2009, registering a growth of five per cent. Hindi dailies alone have 57 million readers followed by Marathi and Malayalam dailies at 18.3 and 17.2 million readers, respectively.
Hindi dailies continue to lead. The top three slots have been occupied by Hindi dailies, with The Times of India, being the only English daily to make it in the top 10 list. Dainik Jagran and Dainik Bhaskar remained the most-read newspapers in India. While the top five remained the same, there was some change in the bottom five, with Rajasthan Patrika gaining readership numbers due to its expansion in Madhya Pradesh and registering a growth of 14% in readership. Hindustan too gained good numbers in 2010, with its expansion in UP going at full pace and was the fastest-growing daily in India registering a growth of 16%. It is fast catching up with the leaders and it won’t be too long before Hindustan vies for the top position.
In most Hindi-speaking markets, the leaders strengthened their position while in some, they also reduced their grip. While the overall readership numbers of the leaders have not reduced, competitors have gained share by capturing the slot of the second newspaper in the household. Hindustan gained share in UP and strengthened its position in Jharkhand. Rajasthan Patrika, which goes by the name of Patrika in Madhya Pradesh, also gained on the back of sustained efforts to expand. It also strengthened its position in Rajasthan further.
Advertisers have tended to focus on urban geographies with English-speaking populations. Advertising spends are therefore concentrated on English newspapers that cater primarily to SEC A/B2 households. As a result, historically, while vernacular language papers command higher readership than English dailies, advertising revenues have always been skewed towards English dailies. This trend was no different in 2010. Gradually, as the purchasing power of consumers in Tier 2 and Tier 3 cities increases, advertisers will begin to see greater value in these markets and ad spend on vernacular newspapers will increase. Recent changes in the socio-economic classification (SEC) system used by the IRS, now focusing more on product ownership/usage, are likely to benefit leading non-English dailies. It is expected that the gap between the ad spends of English and vernacular language news papers to gradually reduce.
The Times of India (TOI) leads the list of English dailies in India with a readership of over seven million, followed by Hindustan Times. Interestingly, TOI is the only English daily in the top 10 dailies in India and is gaining ground on some of the regional dailies. Hindustan Times (HT) is also fighting hard to reduce the gap with TOI and it is aggressively trying to expand in Mumbai by wooing subscribers with attractive subscription schemes and gift offers. HT has continued with its subscription scheme of INR 199 for the second year running in 2011 to gain market share in Mumbai.
6.1.1 Key developments in the newspaper publishing market
* Growing trend of hyper localization
Regional papers give advertisers access to localized population and their niche target audience, difficult to do via national broadcast media. Newspapers are now realizing value in going a step further and launching area-specific editions of newspapers. These cater to local population and are mostly launched in metros with SEC A consumers, to derive maximum advertising spends. For example, TOI has launched South Mumbai and Navi Mumbai editions.
* Unbundling of products to increase profitability
During the recession of 2008-09, several national newspapers bundled their offerings for consumers as well as advertisers to pre-sell inventory in bulk. They offered heavy discounts on bundled products. While newspapers such as TOI still offer bundled products to consumers to increase cover prices and push their less-popular publications, they along with other national players such as HT have unbundled their rate cards for advertisers. This is done to increase profit margins and take advantage of the local reach of each of the publications.
* Increasing consumption of imported newsprint
As pointed out in the PwC Entertainment and Media Outlook 2010, many regional newspapers are moving towards coloured editions (in part or full) to hold on to their customer base and thwart competition. However, this also means that these publications are moving from domestic newsprint, considered of lower quality, to imported newsprint generally used by English newspapers. While the move towards coloured newspapers is good news for customers, it also exposes newspaper publishers to price and currency fluctuations associated with imported newsprint.
* New entrants expanding the market
As we saw in 2009 and 2010, newspaper publishers continue to enter newer geographies and expand into the adjoining region. While this increases the competition in the region, it also benefits customers. Also, it was observed that competition in a region actually increases overall readership there. Madhya Pradesh’s Hindi daily readership increased by 27% in 2010 with the expansion of Rajasthan Patrika and Nai Dunia.
* Expansions to continue as most of IPO money still to be utilized
Dainik Bhaskar (DB) and Hindustan Media Venture have been on an expansion path in 2010, and the analysis of the statement of utilisation of their IPO proceeds makes it clear that this trend is bound to continue in the future. Both papers have much of its IPO proceeds demarcated to be utilised for entering new markets unspent.
6.2 MAGAZINES PUBLISHING
The magazine industry continued to lose readership for the second consecutive year. The readership of the top 10 magazines (by AIR) dipped by around nine per cent losing almost 1.5 million readers. Non-English magazines made the top order in magazine readership. While Malayalam magazine Vanitha emerged as the clear winner, Pratiyogita Darpan was the only magazine which showed growth in 2010 replacing Saras Salil to take the second spot on the back of its growing young audience.
6.2.1Key developments in the magazine industry
* Business magazines show growth
Though readership of most magazines declined in 2010, the average issue readership of most business magazines showed healthy growth. Business Today is the most-read business magazine in the country showing maximum growth over the previous year’s figures.
* Mushrooming niche and special interest magazine category
A number of new international magazines were launched in 2010. Worldwide Media launched Lonely Planet in the first half in 2010 and BBC Knowledge and Home Trends in the second half. Network 18 launched ForbesLife and Conde Nast Traveler. All these magazines are priced in the range of INR 100 to 250 focussing on the upper middle-class and relying less on advertising as ompared to other Indian magazines. Some of these magazines have shown good growth albeit from small numbers.
* Niche magazines
Niche magazines have made their presence felt in India and will continue to grow. While segments such as travel, auto, lifestyle and education are already established, It is expected that new segments will emerge and grow this space. In the past year as well, a few niche magazines have shown very healthy growth. For example, Autocar, India Today Travel Plus and Outlook Traveler.
6.3 KEY RISKS AND CHALLENGES
• Increasing newsprint cost a worry for newspaper industry
International prices for newsprint had started to increase from the third quarter of 2010. However, since newspapers had existing inventory of newsprint procured at lower prices, this did not impact profitability last year. The impact of increased prices will be seen in 2011. High newsprint prices continue to threaten profitability, particularly for English language and larger vernacular language newspapers, which consume larger quantities of imported newsprint. Newsprint forms a major component of the cost of publishing a newspaper (40 to 45% of total cost). Foreign currency fluctuations also affect prices and impact margins.
Domestic newsprint prices also affect regional newspapers, many of whom traditionally source up to 80% of their newsprint requirements from Indian manufacturers. There has been substantial upward movement in domestic newsprint prices. They have increased by around 20 to 25% in recent months. This will affect the publishing bottom-lines. However, since many players have forward contracts with newsprint suppliers as well as hold inventory positions, there is a two-quarter lag between the increase in newsprint prices and the impact on profitability. Going forward, though, higher newsprint costs will hit profitability in 2011 and the first half of 2012.
• Pressure on profitability drives ad-edit ratio upwards
The increase in newsprint costs, reduction in cover prices and increased circulation by national and regional players have exerted immense pressure to maintain and show growth in bottom-lines. The pressure is to increase advertising while maintaining page count. While there can be limited increase in advertising rates, given the intense competition, it has resulted in pressure on the ad-edit ratio of publications. Dainik bhaskar’s ad-edit ratio, around 27% in 2009, has moved to 31% in 2010 going upto 35% for some editions.3 However, increase in the ad-edit ratio is limited. How companies manage this conflict in the future will be a challenge.
• Subscription schemes creating dependence on advertising revenues
Entries into newer geographies reduced cover prices drastically in some cases. When Dainik Bhaskar entered Ranchi, Hindustan, Dainik Jagran and Prabhat Khabar reduced their cover price to INR 2 from INR 3 and 4. Moreover, the new entrant enticed consumers by offering subscription schemes and gifts. Subscription schemes can be as low as INR 199 for HT in Mumbai for one year, effectively meaning that the cost to subscriber is INR 0.50 for a copy with the printed price of INR 3. For newspaper owners, it means increasing dependence on advertising revenues leaving them more exposed to economic downturns.–
* The challenge for the industry will be to bring back circulation revenues after gaining market share. Editorial content will play a big role in this endeavour.
* Other potential threats to profitability in the near future
* A recent ruling by the Wage Board has mandated significant pay increases across levels. If implemented, this can negatively impact profitability, particularly of the smaller players. Large national newspapers are less likely to be affected as a significant proportion of their staff is on contract at higher compensation levels. * While the first half of 2010 has shown continued advertising growth for the print media industry, any uncertainty in the economy in the second half of 2011 can have a negative impact on profitability.
• Threat from new media unlikely to materialize in the medium term
* The rising popularity of new media technologies like the internet and mobile is a threat to traditional print media. However, due to low penetration of broadband internet in India, browsing online for news has not become a widespread consumer habit even in leading metros. In smaller towns, low PC penetration and erratic electric supply continue to hinder the growth of new media. Going forward however, if technologies like 3G and reducing handset prices begin to drive data and internet traffic to mobile handsets, this scenario can change. * Most print media companies have made online forays with varying success. Online revenues have accrued to transaction- and commerce-led models (online shopping, etc.) and certain types of classified advertising (particularly jobs and matrimonial) have started moving online. However, these online businesses have struggled to earn subscription revenues for content from Indian audiences.
6.4 OUTLOOK FOR THE PRINT MEDIA INDUSTRY
The Indian print industry is projected to grow by 9.6% over the period 2010-15 and is projected to reach an estimated INR 282.0 billion in 2015 from the present estimate of INR 178.7 billion in 2010. Newspaper will continue to have a major share in the print market. Regional print remains the driving force behind the growth. The Hindi print market showed a growth of nine per cent over the last year and PwC expects this trend to continue owing to large expansion plans charted out by regional players. Magazines are expected to show marginal growth on the back of growth in special interest magazines and niche content.
Local news is expected to be the flavor over the next year as publishers try to create content closer to the reader’s heart. Publishers may also revert to cost rationalization to manage rising newsprint costs to avoid passing it on to either readers or advertisers. Advertising will remain the key revenue generator for the print segment commanding 70% share of revenue as compared to 30% by circulation. However, the overall share of print advertising will reduce in the total advertising pie. Regional advertising is set to grow at a brisk pace with advertisers now focusing on Tier 2 and Tier 3 towns. We do not foresee a major shift towards digitization. The newspaper market in India is expected to continue to grow at a steady pace.
•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.
•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.
7.3 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, it is expected that advertising will account for upwards of 75 percent of total revenues with circulation making up for the balance.
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 broadcastmedia giving print an edge with respect to local businesses such as restaurants, malls, retail shops and neighborhood services.
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.
The daily print media industry needs to embrace competitive strategies wholly by all the firms to raise the level of both quality and content of their products to meet market expectations. With growing population and increased levels of literacy and knowledge, more is expected from the daily prints and their roles as educators becomes more needed. The industry also faces huge threats from other information sources currently available from improvements in information technology such as radio. Televisions and wireless technology. The government should set up policies that ensure that the reading culture is not eroded in society so as to enhance the usefulness of print media.
Challenges faced by the print media including high cost of print paper , media legislation by the government, high cost of daily distribution caused by poor infrastructure should be addressed as a policy concern. Government interfence with the freedom of press is also visible and policies should be put up to set a level playing field enjoyed by all firms in the industry.
Develop deeper relationships with readers around targeted interest areas. Strong print brands enjoy a trusted relationship with their audience; readers are loyal to print publications because they provide high-quality content about specific interest areas. Digital media afford opportunities to deepen and extend those relationships.
Tap into revenue streams beyond advertising and circulation. New publishing models will include marketing services such as custom content, consumer insights, and lead generation, and new offerings for customers such as premium content and data-based applications.
Reinvent the content delivery model (with a particular focus on lowering costs) and emphasize a “profitable core” of unique and brand-defining material. Print media companies need to avoid the formula-driven approaches to cost cutting that have been prevalent so far, and instead adopt approaches that better align their cost of content with the revenues generated.
Innovate with new products and pricing models. As the pace of change continues to quicken in the digital world, as new devices for accessing printed content continue to emerge, and as new applications are developed to exploit online content, this will lead to as-yet-untapped opportunities for media companies.
Print Media should also try to broaden the public view by generating interest and awareness about international events. Thus, we see that despite the rise of electronic media to prominence, it has failed to dislodge print media form its vantage position. Print Media still remains the most common means of creating public awareness and it will continues to be so even in the time to come . Hence, with time we need to be more responsible, discursive and vigilant as readers so as to discourage irresponsible press and create conducive environment for the formation of a responsible and mature Print Media.
* FICCI-KPMG Indian Media and Entertainment Industry Report 2012 * The Economic Times Article “Recent media deals point to consolidation in the industry: Experts” * Indian Brand Equity Foundation Article “ Media and Entertainment Industry March 2012” * India Entertainment and Media Outlook 2011
* “ Hitting the high notes “ FICCI-KPMG Indian Media and Entertainment Industry Report * http://jeromyanglim.googlepages.com/