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Free newspapers: Not a smart move in the long run in India, say print players

Free newspapers: Not a smart move in the long run in India, say print players

Author | Akash Raha | Tuesday, Aug 03,2010 8:37 AM

Free newspapers: Not a smart move in the long run in India, say print players

With price war in the print industry escalating and major newspapers in the market selling for as low Re 1, exchange4media attempts to explore the model of free newspapers and its efficacy in the Indian market. The concept of ‘free newspaper’ dates back to the 1940’s, when a Walnut Creek, California publisher launched its free newspaper called Contra Costa Times. However, the concept never took off in India. Industry experts share their views on whether such a concept will work in the country.

At a point, when the Indian print industry is getting increasingly dependent on advertising and revenue from cover prices has become minimal, one is tempted to think whether or not in near future newspapers in the country will be available for free.

In a recent conversation with exchange4media, Suresh Balakrishna, COO, Mail Today, had said, “Getting a newspaper for Re 1 or Rs 2 for 40 pages of brilliantly produced and well-researched newspaper is ridiculous. Newspapers are increasingly becoming dependent on ad revenue. Most newspapers have a 95:5 ratio, wherein 95 per cent of the revenue comes from advertising. The more dependent you are, the more you enter the quicksand.”

But how deep is the quicksand, and have the print players plunged in it already? At a point when the consumer gets more price for newspapers from a trash dealer than he actually spends, such wild thoughts are hard to keep at bay. Rahul Kansal, Chief Marketing Officer, The Times of India Group, opined, “You can start giving out free newspapers when you are not an established force and are new to the market. In the long run, this strategy will not work as the circulation begins to swell. Free newspapers are just a mode of incentivising new newspapers. Several newspapers in India give out subscriptions for less than Re 1 per day. They are just jeopardising the circulation to maximise ad revenues.”

Maheshwar Peri, Publisher, Outlook magazine and President, Outlook Publishing India Pvt Ltd, too, agreed that free newspapers could work as a short time strategy, but eventually the copies had to be paid. He noted, “Free newspapers would not have a specific target audience, and the circulation numbers would lack credibility. It is true that newspapers are increasingly becoming dependent on advertisers. Since the 2009 recession, newspapers are looking at alternate sources of revenue. They will soon be looking to reduce their dependence on advertisers by increasing the cover price.”

Then again, the rhetoric question is whether in this increasingly competitive market newspapers will have the elbow room to increase prices? The trend over the last few years suggests otherwise, as newspaper cover prices have been sharply declining. R Rajmohan, Publisher, Open magazine, believed that it would be a great challenge for any free newspaper to make a dent on the already established newspapers. “Cover prices are ridiculously low, and the consumer doesn’t mind paying for it. It would take huge investment on the part of any new player to sell a newspaper for free over a period of time,” he pointed out.

One such free newspaper is the Delhi University Beat, which has stood the test of times in the last three years. The paper’s Editor, Radhika Marwah, said, “It will be interesting to see how the market reacts to a free newspaper, which targets a bigger readership. In India, people don’t appreciate free things. If at all such a newspaper comes into being, its credibility might be questioned. But I certainly believe that the model of free newspapers can make a mark in the industry in future.”

So far, none of the major print players has shown much interest in going for such a concept. While most industry experts felt that such a concept would help a new player gain foothold in the market, sooner or later they would have to go paid in order to sustain themselves in the long run. Plus, there is the credibility factor too in free newspapers.

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