Globally, the print media industry has been on a decline, in terms of business. Newspapers in developed markets have been, over the last few years, losing customers and advertisement revenues to alternative mediums. But print in India is a very different business from that in most developed regions. It has not only survived the rough times but continues to grow.
While the Indian newspaper industry has faced multiple headwinds, especially in the last two-three years, in the form of demonetisation, implementation of GST and RERA, and the rapid growth of digital content, it is still here to stay. According to a Ficci-EY report, it is estimated to grow at 3.4 per cent (CAGR) to reach ₹338 billion by 2021.
Here are factors that contribute to the growth of the print media in India.
Growth drivers
There are certain key factors that have helped Indian print media shrug off declining trends globally and grow despite the increase in digital penetration.
One, print media companies have the cost advantage. That is, the newspaper cover prices in India are very low and are affordable to most people. According to Ficci-EY report, they cost no more than ₹200 a month (roughly $3), which is close to the cost of a single newspaper per day in the US.
Two, the credibility of print media and the widely prevalent paper reading habit, have helped sustain and grow the segment. Though the young population has largely shifted to the digital platform, concerns over fake news nudge readers to go with print news, which is well-researched and reliable.
Three, India has a unique distribution model. Newspapers are available at one’s doorstep at the cover price — say, between Rs ₹1-10 a day (depending on the newspaper). The price is much higher in the global markets. This is because the labour costs are higher in the developed countries and many readers only access newspapers in public places, thereby constraining growth.
Lastly, local content attracts readers more. In India, the vernacular media has an upper hand over the English newspapers and magazines. Regional newspapers with multiple editions help cater to a wider (local) audience. This also enables local businesses to advertise in one or more editions that serve their target markets. For instance, DB Corp, otherwise known as the Dainik Bhaskar group, publishes the largest set of regional newspapers in India. It has 46 editions for its Hindi newspaper, nine editions for its Gujarati newspaper and six for the Marathi newspaper.
India being a country with a relatively lower literacy rate than the global average, there is more room for print penetration. Improvement in education and increase in income levels, should augur well for print, reaching out to more readers going ahead. Keeping these readers in mind, print media company DB Corp has expanded in markets such as Bihar to increase its circulation and readership. Jagran Prakashan, another large print media player, has also expanded its circulation in markets such as Punjab and Jharkhand.
Ad revenue dominates
Print media is the second largest contributor of revenue (about 18 per cent) to the media and entertainment industry in the country. A major chunk of revenue, about 70 per cent, comes from advertisement. With the impact of GST (goods and service tax) stabilising, sectors such as FMCG and auto have upped their marketing spends. In 2018, these two sectors together contributed 28 per cent to the total print media ad revenue. Real estate, despite sluggish demand, contributed 6 per cent, and education 10 per cent.
Though the ad revenue for 2018 grew only 0.4 per cent, it is expected to rise significantly in 2019 due to the upcoming general elections and the DAVP rate increase (the Directorate of Advertising and Visual Publicity is the nodal advertising agency of the government for various ministries and government organisations). Stable newsprint costs should also aid earnings. In this regard, DB Corp has registered ad revenue growth of nearly 8 per cent for the nine months ended December 2018. The overall revenue for the company grew 7 per cent during the same period.
Regional play
In addition to economic factors, a newspaper’s regional presence plays a vital role in driving ad revenue and volumes. DB Corp’s Hindi newspaper is circulated in 11 States while Jagran Prakashan’s across 12 States in the country. According to the Ficci-EY report, Hindi newspaper publications contributed to 37 per cent of the ad volumes in 2018, followed by English newspaper publication (25 per cent), with the rest coming from regional language papers, including those in Marathi, Kannada, Telugu and Assamese.
Digital onslaught
While print media in India has a lot more scope for growth, the sector is not devoid of challenges. Players are often impacted by fluctuations in newsprint prices and are constantly under threat from rapid digitisation of content. For print publishers to survive, they need to adapt to the fast changing environment to retain readership and the ad market.
In this regard, most print publishers already have online platforms in place and are strengthening their digital footprint. For instance, DB Corp has the Dainik Bhaskar Epaper app and Jagran Prakashan also has a mobile app. Though the digital platform does not contribute significantly to the revenues of these companies yet, it may scale up significantly in the long run.
(With inputs from the Ficci-EY report)