FICCI’s initiative in the print sector, The Future of Print Media, held in Mumbai on September 27, had experts debating and deliberating on some of the key aspects of the print medium that would play a key role in the way forward. The day began with I&B Secretary, S K Arora, throwing light on the government’s role in the medium, and investors giving their point of view on print’s future.
In his inaugural address, Arora delved more on the initiatives that the government had taken of late to boost the print sector in the country. He said, “The government has been observing closely how the medium is developing and the challenges it faces.”
Enumerating some of these, he pointed the technological growth that the industry was seeing and the external challenges by way of conflicts on the global level. “Another area to watch out for are the foreign investors coming in the Indian market,” he added.
Explaining as to why the government had a cap on foreign investments, Arora said, “We are doing all we can to encourage the sector, but at the same time we have to be cautious that the law doesn’t allow too much of foreign intrusion, especially in a medium as strong as the press.”
Deepak Kapoor, Executive Director, PricewaterhouseCoopers, India, spoke on ‘Trends in Print Media : Global, Asia Pacific, India & Regional’. Giving the example of new players in the Mumbai print sector, he said it was an indicator of the growth that the medium was witnessing despite being one of the oldest mediums in the country. He felt that the print sector hadn’t been tapped fully.
Kapoor pointed areas that he perceived as the drivers for the print sector in the future. “The economy is opening up and there are various sectors emerging. India is growing on the international scene also and this gives need for Indian content to grow equally. The second driver, hence, is content,” he said.
The first session delved on Fund Manager / Investment Banker / VC Perspective on the print media. Moderating the session was Ambit Finance’s Managing Director, Ashok Wadhwa. Giving a generic picture, he said, “In the media companies that have listed, there are examples like UTV and Balaji that have done well for themselves. All kinds of media companies have looked at this option and the last in queue was print media.”
He added that over the years the medium has seen significant attention and one key learning that came from the sector was, “Staying power is winning and you have to find a way to stay.”
The discussion began with E&Y’s Associate Director Mukesh Jain bringing out the prevalence of competition in the sector. He said, “New players are coming in the market and this implies increasing competition for the incumbents. Another positive point about the sector is the involvement of foreign players, as every time there is any international interference, we see an improvement in visibility of the paper.”
Ravi Sardana, VP, ICICI Securities, said, “Not just the economy, but other parameters like literacy rate and awareness is also growing in the country. All this can only take print further. But the belief in the medium is not new. It has been there for years now, only the pace has picked up.”
One of the ways forward for him was different players working together, “Even on a practical level it is difficult for a national player to concentrate on city specific units and in cases like these, we will see a wave of consolidation in the next few years.”
Another trend he pointed out was that family run businesses were looking for professionals. “Companies aren’t going to be dependent on any one or two people. There will be fresh ways of working coming in and that too would bring a sea change in operations,” he said.
Addressing the audience, P R Srinivasan, Director, Citigroup Ventures said, “We are still students in this domain. The TV sector is better understood than print today by financial communities given the present business dynamics of both sectors, but what is positive is the increasing competition in this segment.”
“The print advertising and advertisers taking print as an option – both are set to grow and the opportunity this presents is exciting,” Srinivasan said. However, opportunities also brought problems, and according to him, the problem of the print segment was the fact that even as cost in the sector like newsprint, press and so on are global, the revenues didn’t compare to global figures.
Moreover, there hardly was any circulation revenue for Indian papers. “Since other costs like news gathering and human resources is low, we still break even, otherwise the situation isn’t a happy one,” he lamented. Readership in India was abysmally low at 20 per cent, he said, but also added that this was set to change, given the current developments in the arena.
Enam Financials’ Mahesh Chhabria was next to speak on the investor’s point of view. He brought to light the importance of valuation in the print’s growth. He pointed at the reluctance of large media houses going for that option, which he felt was a negative trait for the sector itself. “Print is a medium where it isn’t easy to change habits,” he said, “with the GDP growing at the pace it is, the sector will see a boost and it is important to capitalise on the current market situations. Print is yet not a saturated market.”
He estimated advertising in the print sector to grow at 10-12 per cent, which meant substantial revenues coming in the sector. He concluded by saying, “Capital is available, where a success story is available. Print has to get and use these success stories. Valuations have to be sustained for the industry on the whole to grow.”
Agreeing with him, GW Capitals’ Vikram Narula said the fact that print and TV couldn’t really be compared and that there were some aspects of print that would remain true to print only. “The print model can offer stable and large cash flows. With the emerging competition, cash flow would be used to grow the medium some more,” he said.
In all, the experts brought a few points to fore, content wasn’t owned by editors or news houses any more and that it was a key driver of the segment. The fact that print is seeing more competition than it ever did has made the medium more attractive and as the experts say it, ‘there are only happy times ahead – at least for some time to come.’