The newspaper is a growth story and continues to thrive in India, driven by increasing literacy rates, consumer spending and the growth of regional markets. India is one of the largest newspaper markets with more 107 million copies circulated daily, surpassing China and accounting for more than 20 per cent of all dailies in the world. Print circulation in India continues to be on an uptrend. Increase in print penetration and growth of Tier I and Tier II cities, supported by growth in literacy and purchasing power, aided growth in revenues.
Marketers are turning their attention to rising disposal incomes and purchasing power in South India. National brands have realised the need to localise the campaigns. Driven by strong local demand, South India is poised to attain a greater position of strength in coming years. The southern states have higher literacy rates than national average of 74 per cent.
Print market in the South
South India, given its high literacy rates, is one of the strongholds of the Indian print media. According to Deloitte estimates, the South Indian print market is estimated to be around Rs 5,680 crore in FY11 and expected to reach Rs 8,490 crore by 2015, growing at a CAGR of 11 per cent. Tamil Nadu and Andhra Pradesh are the largest print markets with revenue share of 31 per cent and 27 per cent, respectively, of the total South Indian pie. Karnataka follows with a 22 per cent share. Kerala, despite its relatively small population, commands a 20 per cent share. The study further states that advertising, which made up for almost 68 per cent of the total revenues in 2011, is expected to increase its contribution to 77 per cent over the next four years. The dailies are expected to strengthen existing distribution and expand into newer markets to increase their reach and readership.
As of 2011, the South Indian English print market is estimated to at Rs 3,040 crore, and is expected to grow at CAGR of 8.7 per cent to reach Rs 4,240 crore by 2015. Tamil Nadu leads in English market in the South with a 38 per cent market share, followed by Andhra Pradesh and Kerala with 29 per cent each. Kerala, the smallest market for English print in South India, commands a share of about only 4 per cent due to dominance of local language newspapers.
Tamil Nadu, with high literacy levels, urbanisation and growing advertising market, is emerging as a hub for new investment from large media houses, looking to capitalise on these trends. These factors are expected to drive the print market. Tamil Nadu’s economy has been buoyed by industries such as automobile, textile and retail. Given the rising purchasing power of the region, it is an important market for national advertisers across retail, durables and FMCG sectors.
Unlike Karnataka, where 80-85 per cent of the advertising spend is focussed in and around Bangalore, the dependence on advertising from Chennai is not that high. This is due to emergence of Tier II cities like Salem, Madurai, Coimbatore and Trichy as potential pockets for advertising spends.
The influx of significant numbers of people from other states has made the Bangalore market highly cosmopolitan, providing a perfect blend of English dailies to connect with the audience. For Andhra Pradesh, political developments are likely to leave an impact on the print market as a whole.
A number of local advertisers are advertising on national television, national newspaper jackets and so on. Their visibility is increasing. More and more local advertisers are competing with big corporate houses from metros/ cities in which they operate. Local advertisers are one of the key factors to drive print advertising in Tamil Nadu. Local spenders like retailers, textiles, jewellery, etc., have been sustaining the market long before the advent of retail culture that swept the country. Regional players are also increasing their reach to tap the local advertising market.
Most of the media houses in the country are preparing to go digital to increase readership, especially among youngsters. Publishing houses should also focus on Tier II and Tier III towns, where an untapped educated population is in search of quality print content. If the South Indian publishing houses take initiatives in these directions, it is likely that the region will continue to remain one of the strongholds of the printed newspaper.
Key developments that impacted the print industry in 2011
The industry in general saw advertising volumes and revenues display an erratic trend. This is probably largely in tune with how the macro economy has performed with respect to inflation, oil prices, rupee depreciation and volatility in the stock market. Most newspapers have found it hard to show any growth worth speaking about.
The prices of our main raw material – newsprint – went up rather sharply in the latter half on account of forex. Newspapers with large circulations and high page levels (typically the mainline English dailies) have, and are, suffering the most.
As compared to 2010, the year 2011 saw very few IPO/NPO issues and there were no major disinvestment opportunities from the government impacting advertising revenues. Launch of 3G and proliferation of consumer Internet also led to advertisers exploring other media to connect to consumers.
Some of the policy changes that could have repercussions for the industry this year are regulation of social media and FDI in retail, which are likely to see significant shifts in media spends.
Readership trends in the South
The results from the recently conducted Indian Readership Survey - IRS Q3 are encouraging, with both English and most Indian language dailies showing growth in South India.
The growth of English dailies has been higher than that of the language dailies. While the readership of English dailies grew by 4 per cent, that of the Telugu and Tamil dailies grew by 2 per cent and 1 per cent, respectively. The readership of Malayalam and Kannada dailies was more or less static.
(K Balaji is Managing Director, The Hindu.)