Outlook, like several times before, issue dated 15 April took another bold decision – increase cover price by 50% to Rs 15. Its earlier moves (launching a weekly against very popular fortnightly and concentrating on urbane metro dwellers) had paid off and forced competition (read India Today) to follow suit. But raising price by a hefty 50% is perhaps the biggest bet. Will it pull this off? And will India Today blink again and follow by raising price?
Expectedly, India Today denies a rethink. “It is their independent decision. India Today is the undisputed leader and we will take our own marketing decision,” clarifies Sanjay Mallik, Associate Publisher of India Today. But the market is a buzz that group is reworking numbers and keeping a close tab on Outlook. History too has some indicators. When Outlook was launched in 1995 as a weekly at Rs 10, big brother India Today was a fortnightly priced at Rs 15. But, by June 1997, India Today had changed to a weekly, and reduced price to Rs 10. This time too, it could well be the performance of Outlook that determines things for India Today. So, has the price hike affected Outlook?
Outlook management is upbeat about the new price and has launched a marketing and circulation drive to maintain the numbers. “We have done a detailed research to understand our readers. More than 90% of the readers read Outlook regularly and hence we see no fall. Besides we are running an attractive subscription offer for some price sensitive readers,” says Maheshwar Peri, Publisher of Outlook.
Going back a little, why did Outlook take this big bet? Peri gives an unswerving answer; ”We launched at Rs 10 and have been at it for last 6 years. There is no industry where the price doesn’t change for years! We realize that the value of Outlook was more than Rs 10 and have hence revised it.” Peri also maintains that Outlook has been able to hold up the circulation in last couple of issues after the price revision.
Media analysts are quick to point out another important reason – tough advertising market. With stagnant ad volumes, hike in cover price would shore up the total revenues.
But analysts are divided on the impact of price hike. Some argue that a substantial chunk of circulation (especially in case of Outlook) is driven by subscription sales that are long term deals and hence out of preview. As per latest ABC figures, Outlook has 1.18 lakh subscription sales out of total circulation of 2.47 lakhs. India Today has a lower contribution (1.47 lakhs subscriptions out of total circulation of 4.41 lakhs) coming from subscriptions. Others argue that a small dip in stand sales is only expected but will shore up after a while.
So, next few months will decide if India Today blinks again and this time increases the cover price. And will this prompt The Week to get into the act as well?