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‘It’s necessary to recognise that INS is monitoring a credit portfolio of over Rs 1,000 cr’

‘It’s necessary to recognise that INS is monitoring a credit portfolio of over Rs 1,000 cr’

Author | Noor Fathima Warsia | Tuesday, Sep 19,2006 8:08 AM

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‘It’s necessary to recognise that INS is monitoring a credit portfolio of over Rs 1,000 cr’

The 67th annual Indian Newspaper Society (INS) elections took place in Bangalore on September 18, 2006. Mumbai Samachar’s Hormusji Nusserwanji Cama has been elected as the new President. He replaces Malayala Manorama’s Jacob Mathew. Mathew, while giving his farewell speech, spoke in detail about the achievements of the body and also mentioned the challenges and opportunities ahead.

Giving an overview of the economy, Mathew said, “The Indian economy achieved an impressive growth of around 8 per cent during 2005-06. This growth has been fuelled by the sustained growth of the services sector and a buoyant manufacturing sector. These are interesting indicators for the newspaper industry and we are on a threshold of an exciting era.”

He further said that the year had registered a healthy growth for INS industry as well, with a turnover of Rs 11, 800 crore in 2005. He said, “Our members reported total advertising revenue of Rs 7,400 crore for 2005, a growth of 23 per cent over 2004. This growth comes after 15.6 per cent growth in 2004, and 16.9 per cent growth in 2003.”

At the same time he pointed out that the industry’s bottomlines hadn’t grown hand in hand with the sales figures, and identified the rise in international and domestic newsprint prices as one dampening factor and the potential of taxes to corrode the industry’s profits as the other factor.

Speaking on the prospects of the industry, he said, “According to the global study of newspaper publishing released by PriceWaterhouseCoopers, our industry accounts for about 5 per cent of the industry in the Asia Pacific region. However, comparative data shows that along with Indonesia ours is the fastest growing newspaper industry in the Asia Pacific region, and amongst the top five in the world in terms of medium-term growth prospects.”

Mathew also quoted research stating that industry estimates showed the Indian advertising market to have had a turnover of between Rs 12,000 crore and Rs 14,000 crore in 2005.

“With INS members’ billing at Rs 7,400 crores, it appears that the press still enjoys about half the advertising business in India. The share of television is estimated between 38 per cent and 42 per cent. The share of radio is still small at about 2 per cent. But, the recent explosion of FM licenses suggests that radio will soon emerge as a significant claimant for the advertising rupee. We are concerned only with TV for the moment, because the radio story has yet to reveal itself,” he said.

Mathew also looked at the changing media policies and pointed out that during the year, the Society had to grapple with several government moves, which appeared to reverse the trend of liberal media policies. “The DAVP Rate Structure Committee, appointed during the previous year, recommended a rate structure based on the traditional “cost-plus” approach, which greatly disappointed the newspaper industry,” he said, adding, “The average increase in rates was only 14 per cent, and the industry’s demand for a card rate based structure had been ignored.”

He also commented on the new advertising policy that required all PSUs, and autonomous bodies to route their advertising through DAVP and at highly subsidised DAVP rates.

One of the interesting points that Mathew drew attention to was the credit monitoring of INS. “We are perhaps unique amongst industry associations because we manage the business of its members. It is necessary to recognise that the Society is today monitoring a credit portfolio of over Rs 1,000 crore. This is bigger than quite a few banks. And, we are managing this volume of credit without any of the legal protection that banks enjoy for their assets,” he pointed out.

Mathew also drew attention to the initiatives that the INS had taken on a number of issues with the Postal Services Board with respect to the administration of the ‘Patrika Channel’ for newspaper distribution. “Small and medium newspapers and magazines, which constitute the majority of INS membership, rely substantially on these services. In response to the efforts of the Small and Medium Newspapers Committee, the Department of Posts has formed a joint committee of publishers and departmental officials to resolve the outstanding issues,” he said.

The Society’s active engagement with international newspaper organisations such as the World Association of Newspapers, the Commonwealth Press Union, the International Federation of Periodicals Press, and IFRA also found mention. “In November 2005, the Society played host in Mumbai to the Global Forum of the International Newspaper Marketing Association, held in India for the first time,” Mathew noted.

Mathew signed off his speech as INS President 2005-06 by saying, “At the conclusion of my term as President, I wish to thank my colleagues amongst Office Bearers – Dr Gulab Kothari, Deputy President; I Venkat, Vice-President; and Mahendra Mohan Gupta, Honorary Treasurer for making my tasks easy. I request all INS members and the Executive Committee to give the same quality of support to the incoming Office Bearers as they have given to me and to the retiring team.”

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