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Print industry adopts wait and watch approach on the impact of demonetisation

24-November-2016
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Print industry adopts wait and watch approach on the impact of demonetisation

The print news sector is yet to come to terms with the demonetisation policy of the union government. With the purchasing power of consumers taking a beating post-demonetisation, there are legitimate concerns regarding ad spend by companies and sale of print publications per se. 

While there is currently no finality in terms of the industry impact of the said move, no publisher is indeed insulated from the disruption unleashed by demonetisation. However, the likely effect may vary when it comes to the national and regional print media houses. 

Reduction in purchasing power

The coming down of people’s purchasing power has bothered Indranil Roy as well who can’t help but observe the slide in retail advertising. In his opinion, the implications of demonetisation on the media industry would be across languages and mediums. “We need to wait and watch as to what happens over the next 15-20 days,” said Roy, Executive Director, Outlook Group.       

Roy’s point regarding a reduction in the purchasing power of consumers was largely echoed by a representative from HT Media, publishers of two of the biggest daily newspapers in the country. “There is a fair amount of disruption in the market due to lack of liquidity,” said Benoy Roychowdhury, Executive Director at HT Media. 

He opined that customers were postponing purchases but the matter was bound to settle down eventually with the return of liquidity in the market.

Post-Diwali or post-demonetisation effect? 

“As far as we are concerned, we are not seeing a substantive dip,” said Pradeep Dwivedi, CEO, Sakal Media Group, a Marathi media publishing giant. According to Dwivedi, the period post-Diwali is witness to a lull in the business. He pointed out that it was an industry phenomenon since the last 15-20 years.

“The propensity of people to spend goes down in the period after Diwali,” he added. Thus, the advertisers spend less in the forthcoming months. He went ahead to highlight the dual consequences of demonetisation. Firstly, the cash available to consumers had been sucked out. Secondly, the overall buying sentiment stood hurt. 

Dwivedi, however, insisted that print had not suffered as severely as television. He refrained from attributing the prevailing slowdown in the market to the demonetisation policy. “We are yet to figure out whether it is a post-Diwali or post-demonetisation effect,” he wondered. 

Real estate crash and advertising avenues

As per Roychowdhury, the current situation provided an opportunity in the sense that mobile payment services were doing well and indulging in advertising. 

When exchange4media asked him about advertising revenues from real estate, a sector that has been in the headlines on account of falling flat in the recent days, he stated that real estate had not been faring well for a long time but sounded optimistic about its future. “Real estate segment will also start advertising because they have a large number of apartments and they would like to sell that,” he claimed. 

Delhi Press’s Publisher Paresh Nath seemed to run down the impact of the suggested crash in real estate on the print news industry. “No builder takes all the editions of the newspaper,” Nath said as he argued that real estate advertisements were placed in local editions. But his bigger concern was a slightly different subject. 

Sales might dip as market remains gloomy

“People may not have the additional four or five rupees to spend on a newspaper in these times. That is the main worry,” Nath explained. Hence, he indicated a fall in sales. Others remained non-committal. “It is too early to say anything. Nobody can speak. It will depend on how things unfold,” said Prasoon Pandey, Head, Investor & Media Relations at Dainik Bhaskar. 

Generally speaking, he mentioned that the market was down by particularly citing the examples of real estate and fast moving consumer goods sector. 

Beyond media 

The serpentine queues outside bank branches and ATMs is the most visible fallout of the central government’s demonization policy announced by Prime Minister Narendra Modi on November 8. Urban India’s woes in the past few days have heightened with cases of swipe machine failure coming to the fore alongside cash crunch. 

In rural parts of the country, commoners have reportedly reverted to the barter system of transactions wherein they are offering vegetables in exchange for acquiring services like a mobile phone recharge. Farmers are said to be suffering due to lack of buyers for their produce. 

Of course, these are the tangible and immediate consequences of demonetisation. The print news industry is also grappling with the crisis at hand. But the underlying implications of the tsunami that hit the industry seabed two weeks back will only emerge in the days to come. 

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