The print industry is growing. While its growth defies ‘expert opinion’ on its impending doom (since the last decade or so in India, and the last three decades in some other markets), it is also going to keep consolidation in the industry at bay – for now. But players would have to wake up to the opportunities and challenges of media fragmentation, concurred Jacob Mathews, Executive Editor, Malayala Manorama group, and President, INS; and Aroon Purie, Chief Executive, India Today group, on Day Three of FICCI Frames 2006.
The session saw two of the industry’s most successful representatives reflecting the cautious optimism felt by print media. The steady growth of the medium has ensured that consolidation is still some time away. Said Purie, “It will happen. A place like Delhi has 11 or 12 English papers, and several regional language publications. I don’t see it happening that soon, though. What we’re seeing is still a rapid growth. Only when the growth slows will we see consolidation."
Highlighting one of the factors fueling growth, Purie said, "Media is like the movie business. There is a fool born everyday who wants to get into the business. And it is not for making money..."
Among the significant developments in the industry listed by Purie were the faster growth of vernacular publications, and the growth of special interest publications. Citing readership growth statistics between 2000 and 2005, Purie noted that the overall growth stood at 28 per cent, with Hindi publications growing by a whopping 68 per cent, and Telugu by 63 per cent. English publications paled in comparison to the vernacular ones, though they too registered a growth of 36 per cent in the same period.
Rapid expansion would lead to more activity on the IPO, funding and capital fronts, and we would also see increased action on foreign investments, explained Purie. Digital opportunities was the last of the trends he cited. "It's like a 300-pound gorilla. Newspaper and magazine publishers don't know what to do with it (digitisation). Now, the key aspect with the Internet is that it's not a competitor. With the Internet we see two-way communication, and being a flat medium, it bites back. Editors and journalists can be questioned," he said.
Jacob Mathews pointed out that while the newspaper industry was slated to grow to a size of Rs 13,500 crore in 2006, it was not something to feel too happy about. The Indian market accounted for just 5 per cent of the revenues (in print) in Asia, he reasoned. He was quick to add that the potential was immense, given the high literacy levels. "Indian press reaches only 35 per cent of adults, though 65 per cent are literate. PwC predicts an annual growth of 7 per cent, and only Russia and Turkey are expected to do better," he explained.
Highlighting that in the years 2002, 2003 and 2004 (average of three years), 60 per cent of the revenues came from advertising, while the circulation revenues contributed to just 35 per cent of the variable cost, Mathews added, "The current business model demands that we chase advertising for growth. One point for debate is that a low cover price creates artificial targets. And while regional newspapers have a 50:50 model, 80 per cent of the revenues of English publications come from advertising. Some regional publications are dependent on circulation revenues for survival."
TV, with its irresistible immediacy, and an improving quality of reporting, and the FM stations on the verge of launching operations, would prove to be a major challenge, forewarned Mathews. The speakers also drew attention to the rising cost of newsprint, and the opportunities for increasing revenues through the reach of the Internet.
Purie defended a pay-model of news sites, saying, "Why should news be free? If you think I can give something no one else can, then I have to build expertise to deliver that. And they will only get profitable if people go and view the news content." Replying to a question on the issue of convergence and the possibility of mutli-tasking journalists contributing to different media, the TV Today head honcho explained that it was not feasible. He said, "We tried. We thought we would send one journalist to cover for print, radio and TV, and everything synergises very well. It doesn't work. That's not how people work. When you mix up people, you'll probably get the worst of both. Synergy happens voluntarily. You can't force it down someone's throat. Synergies will happen based on market dictates and editorial dictates."
His statement was best explained by his own views on the significance of the strength of the content. If 'pull power' specific to each media arm of the media entity has to be created - through content - then it follows naturally that you need specialists for the job. Replying to answering another question from the audience on sensationalism on television news, Purie said, "Sensationalism equals viewership. There's no secret in that. It's not in your perception, the TAM ratings show it."
While the media had a social, civic responsibility, it was - at the end of the day - a business, contended Puri. No one could counter that. In the case of print, one might add that it is also a business that's doing very well.
The print industry is trying to adapt to the emerging challenges of digitisation, and doing so at an admirable pace. It is important to recognise that the immediacy of the threats of digital age are closer to television than to print - and closer to international markets than to Indian masses. We have time to watch, and learn. With the Internet yet to reach a critical level of penetration in the country, the future's bright for the print media. But it's a future that will one day lead to another, digital, future. By that time, we'll all have media-neutral contraptions to receive and view content on. The levels of trust on the brand providing it will determine the choice.
For now, print is still king. Indications are that it will continue to be so for long.