Did FPJ's 'raddi' ad reveal print media’s best-kept secret?

Publishers love to brag about their drinking and lie about their circulation, says the old newspaper industry cliché. 

On January 1, Free Press Journal, an English daily, published in Mumbai and a few other cities, put out a full-page advertisement on page 1 which warned publishers and urged them to refrain from such practices. 

The advertisement stated, “Caution, News Publishers. Please refrain from financing raddi copies (waste copies) with complimentary copies. Else one day, one day in the near future your companies will be reduced to the status of ‘RADDI PVT LTD’. Hope wiser counsel will prevail. Kindly don’t create raddi value for your shareholders. Let honesty prevail from the new year.” 

The advertisement caught FPJ readers unaware. The media and advertising industry was also perplexed by the FPJ’s move. 

When asked about the reason behind such a provocative ad against peers, Abhishek Karnani, Director of the Free Press Journal Group and Vice President of the India chapter of the International  Advertising Association (IAA), claimed that it aimed to “bring transparency and credibility” to the print industry which is facing challenges as advertisements are drying up. 

“Some publication houses have been misleading advertisers by showing inflated circulation figures, which included copies not being sold to readers. The modus operandi has been to sell the copies unsold in depots directly to those who buy raddi copies. In this process,  they show some of the extra unsold copies as ‘complimentary copies’ to balance the books,” Karnani claimed. 

“Newspapers which do not follow the above practice naturally lose out on advertisements which go to the papers which show vastly inflated circulation figures. We wanted to bring this to the notice of advertisers, readers and the management, that this practice will ultimately lead to a lack of response, from the advertisers’ point of view. Continuation of this practice will lead to advertisements drying up for the print media,” Karnani added further. 

In the newspaper business, inflating circulation figures by 20-40 percent is a standard practice in India, industry insiders say. However, publishers have been able to keep the industry’s darkest secret under wraps, at least for consumers. Most advertisers are aware of this issue though, the chief marketing officer of an FMCG company told e4m.  

According to Karnani, many newspapers have adopted such practices in the post-pandemic time. “Usually, managers are part of the circulation scam, not the management," he claimed further, adding, “At one extreme south Mumbai depot they are inflating numbers by 50 percent.”

Karnani insists, “The Free Press Journal is for fair play and level playing field. What we have said is not merely a claim. Anybody wishing to verify this can visit newspaper depots between 5 am and 6 am and see for themselves what is happening on the ground.”

Newspaper circulation has declined for decades as consumers have found new places to cull news and information. The COVID pandemic has further damaged the industry. Number of pages has also come down in most newspapers. This has worsened the situation, Karnani said. 

“Newspapers lie about their circulation numbers for two simple reasons: 1) because increased circulation allows increased advertising rates, and that means more revenue; and 2) because industry auditing standards make it easy to do,” said another publisher, requesting anonymity. 

The print media's revenue is split in the ratio of 70:30 between advertisements and subscriptions. It saw a fall of 40 per cent in FY21 due to the pandemic. In the following two years, FY22 and FY23, the sector saw its revenue rise by 25 per cent and 15 per cent respectively.

Notably, it's not just an Indian phenomenon. Newspapers across the world have been doing so for ages, industry veterans admit. In most Western markets, roughly 20% to 35% of the circulation of supposed paid-for newspapers is actually free, as per media reports. 

INS refutes FPJ’s claim 

When asked about the practice of inflated circulation numbers highlighted by FPJ, Rakesh Sharma, INS President, refuted the claims. 

“I don't understand the mindset of FPJ management which put out such an ad. In my view, complimentary copies at the airport and other public places are read by captive audiences. Besides, there are audits by the Audit Bureau of Circulations, which validates circulation for nearly every newspaper, which breaks down paid/unpaid circulation, mass subscriptions, types of deliveries, etc.”

“With regards to the FPJ’s allegation that newspaper copies are being sold to raddi, I would say they must present the proof,” Sharma asserted.