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IMC 2010: Alternate revenue streams like events & digital are expected to grow – E&Y report

07-September-2010
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IMC 2010: Alternate revenue streams like events & digital are expected to grow – E&Y report

The two-day Indian Magazine Congress, organised by the Association of Indian Magazines (AIM) in Mumbai, also saw the unveiling of a report on the state of the Indian magazine industry by Ernst & Young. The report addresses some of the key problems of this industry, including the need for a proper measurement metric system and the need to firm up the distribution network, among others.

Making the presentation, Ashish Pherwani, Associate Director, Media & Entertainment, Ernst & Young, highlighted some key points of the report and said that 75 per cent of the magazine revenues came from ads and added that the average ad revenue had declined by 5 per cent last year. The common categories to advertise included FMCGs and media, among others. He further said that categories such as agriculture were on the rise as well and certain B2B segments such as real estate had started to advertise again.

According to the report, 85 per cent of the respondents felt that subscription revenues would grow in the coming year, while 35 per cent felt that the growth would be more than 5 per cent. Currently, the cover prices of the magazines are really low as the consumers have too many options to choose from.

Alternate revenue streams such as events and digital are expected to contribute 20-50 per cent of the total revenue within the next three years. B2C magazine players predicted that 35 per cent of the revenue would come from digital, while B2B magazine players predicted that 70 per cent of their revenues would come from digital.

The highest expected growth in readership is going to come from niche magazines (45 per cent), B2B magazines (33 per cent), English general interest magazines (14 per cent), and regional general interest magazines (8 per cent). The growth will be witnessed in the top 15 cities (55 per cent), Tier II cities (24 per cent), metros (17 per cent) and rest of India (3 per cent). However, an alarming trend is the youth readership is falling.

The key issues faced by the Indian magazine segment include distribution and retention and growth of the existing readers. A large portion of the industry remains dissatisfied with the current readership measurement systems in India.

Some of the regulatory issues and wishlists highlighted in the report include the addition of metro kiosks, DAVP revenues, assured postal delivery and duty on art paper.

Pherwani concluded the presentation by pointing out the agenda for the future, which included approaching legislatures, building communities, collaboration, developing suitable measurement metrics and evaluating distribution options.

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