Indian Print Media: Breaking news

The Indian print media is scripting a success story that seems destined to pervade the global print space in the coming years

Sep 28, 2010 10:09 IST India Infoline News Service Amar Ambani |

An estimated 325 million readers make the Indian print media the world’s No. 2 by readership, second only to China. The industry’s FY10 USD 3.8 billion revenues (estimated) represent a 13 per cent growth rate over the last five years. It’s pertinent to note that this development comes against the backdrop of the overall global decline in print media fortunes. According to a FICCI-KPMG study, the aggregate revenues are set to clock a CAGR of 9.1 per cent over the years CY10-CY14. Unlike the West where the internet publishing and advertising has significantly hit the print media, the Internet threat to print media is still in its nascent stage in India, given the low penetration of computers and adequate bandwidth across the country.

In my reckoning, five key factors have triggered the Indian success story…

Economic boom in semi-urban and rural India

The Indian consumption story is no longer an urban prerogative. For the first time in the history of this nation, rural monthly per-capita consumption expenditure has outpaced the urban figure - thanks primarily to potent government schemes like NREGA and higher minimum support for crops and the percolation of overall economic boom in rural areas that has brought about a surge in consumption growth. This shift has prompted advertisers to focus on semi-urban and rural areas. As newspapers are the only cost-effective media in this belt, as much as 50 per cent of small advertisements now appear in regional newspapers. Not surprisingly, this new wave acts as an enabler for profitable newspaper launches in rural India. But competition would be more prominent in the Hindi language space given the scope in terms of penetration levels, revenue growth potential, expected capex and pre-breakeven period and cover prices. English and other language publications in comparison are likely to see less competition, given the prohibitive high-entry costs and reasonably high penetration levels.  

Growing content localization

Local content, hitherto, has never seen a place of pride in the national media coverage. Traditionally, English have ruled the roost. The English newspapers, focused on top 20 cities, account for 50 per cent of the print media’s ad spend. With time, local content is being placed at a premium, more so by the advertising community, to reach out to a large untapped market. As newspapers hold the edge in the rural segment, local content-based regional newspapers (led by Hindi) are increasing readership in regions with low media penetration and, in the process, developing local advertising markets. They will also enhance their value in terms of price, visibility, content, design and aesthetics. Slowly but steadily, they will outpace the English language publications. The gap in ad rates, between English and non-English newspapers, was down to 9x in 2009 from 12x in 2003. This gap will further reduce in the years ahead.

Upside potential of print media penetration

The estimated total readership base of 350 million spells a penetration rate of only 38 per cent (age group 14 and above) which obviously leaves abundant scope for an upward swing. Moreover, the total readership which includes several fringe consumers looks potentially inflated. The average readership, the relevant parameter in the context of print media advertising, stands at a mere 16 per cent. 

Increase in India’s ad spend (as a proportion of GDP)

The above two factors are slated to increase India’s ad spend-to-GDP ratio, currently languishing at 0.41 per cent. The rise in domestic demand is surely increasing the marketing spend of companies, even in relatively low-ad sectors like DTH, retail and insurance. The strong economic boom is also giving rise to new businesses which, in turn, would turn mega advertisers in the time to come. While regional advertising will act as the main driver, ad spends in English are also picking up. For an industry which depends on advertising revenues, more than subscription revenues, the overall trend will keep the Indian print media industry in good stead unlike its global counterparts. 


Rising newspaper-reading population in India 

Although the literacy rates are rising in India, they have little relevance for the newspaper reading population of India. A more appropriate parameter is the enrolment ratio for secondary school education that’s rising at a steady rate across the country. This parameter paves the foundation for newspaper reading habit among the students of 10-15 year age group. As I foresee a leap in this ratio even going forward, the addressable market for print media is set to rise significantly in the coming decade. 

Of course, players in the print media will have to be agile and responsive to the emerging challenges of tomorrow to be able to sustain their growth. As Shankar Narayan, CFO, Bennett & Coleman Group puts it aptly


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