Indian Print Industry: Future Perfect

Advertisers the world over are taking the online route to reach audiences like never before. In the process, they are faced with the choice and the challenge of reaching the right audiences, as against the ‘broad’ spread of the past. Even as online advertising booms, many a print publication in India has realised the ground realities - perhaps with indications from the international markets - and marry its content through the web, mobile and other vehicles to ensure monetisation through advertising, and access-revenues. The awakening is true for not just the English publications in India, but the vernacular as well. Demand for content from India from abroad is another contributing factor to the growth. While remaining tuned to the challenges of the present and the future, print continues to remain, in the Indian market, the largest advertising medium in terms of revenues.

According to AdEx (a division of TAM Media Research) data, the print media had a phenomenal run in 2005, bettering its own growth the year before. Going by the findings, even as the advertising spend on all media segments grew from Rs 11,600 crore in calendar year 2004 to Rs 13,200 crore in 2005, print’s share of this pie grew the fastest, at 16.1 per cent. The print-killer as it was once feared to be, television, grew by 11.4 per cent. In absolute revenue terms (through advertising) too, print remains the largest (48 per cent), but players have recognised the inherent challenges of competing for audiences in a multimedia age.

The potential for print as a business in India is underlined by foreign interest in investment. This is reflected by foreign titles and joint ventures, the numbers of which can only grow in 2006 and beyond. Following a more open set of regulations, Financial Times picked up close to 14 per cent stake in Business Standard in 2004. After the government allowed foreign publications entry, the IHT now sells its international edition in India.

In the case of print, the advertising revenue component, at 56 per cent, continues to remain higher than the subscription revenue share. Classified advertising’s share of the total dropped marginally in 2005, but the overall growth in ad revenues was not just sustained, but bettered. The Indian print industry perhaps does not have to be as wary as its international counterparts of the ‘Craiglist’ factor.

Let us look at the Singapore market: The Straits Times reports from a Nielsen Media Research report that while advertising spends in the country fell by 8.3 per cent in 2005, newspapers grabbed a larger share of the pie, retaining their status as the preferred medium for advertisers. Television and radio were found to be the two biggest losers. While that may not be an accurate prediction of things to come in India, it validates opinion that fragmentation may not affect a mature medium like print to the extent to which it affects a relatively newer (in its present form) medium like television.

Speaking at a World Association of Newspapers forum in Beijing in September 2004, G K Oreily, COO, Independent News and Media PLC, contended, “As the market - and particularly as TV - audiences fragment, the relative worth of newspapers is enhanced dramatically as advertisers look for a medium that can guarantee a large reach and reliable demographics....” He substantiated with the example of the US market, where research findings showed that in 1985, the average household received 19 channels and watched 11, while in 2004, it received 89 and watched only 15.

According to the PWC-FICCI study, which will launched on the opening day of the FICCI Frames 2006, the print media in India is projected to grow at 12 per cent (compounded annual) to Rs 19,500 crore in 2010 from the present Rs 10,900 crore. But this growth rate will be the second slowest among the various media segments, next only to the piracy-stricken music industry, says the report.

The same report puts the growth of the Internet at close to escape velocity, and this is one of the areas where print has begun marrying its content into. The need to innovate is being felt across the world, and Indian print players are waking up to the challenges from their clan, and other media streams, even while the going is good. Redesigns and new formats are just some of the routes being explored, to remain relevant to a rapidly changing demographic flaunting its command over technology.

Attempts at consolidation and establishing a larger geographic presence, and in some cases a national presence, have challenged established players into innovation at an arguably faster pace. Notably, three new launches in Mumbai, and one in Chennai, have stirred the market. The opportunity of cross media consolidation has seen large television networks - both national and regional - entering the print fray.

Increasing cost of newsprint and the compulsion to stick to the cover price, or even reduce to penetrate a new market, have left the medium overly dependent on advertising revenues. The Internet and the mobile present the new face of opportunities for the print media, to increase revenues, and reach more audiences. The brunt of the multimedia explosion will take some time to have an effect on the future of print, as a business.