Coronavirus halting print circulation means plunging ad revenue

As per the latest updates, circulation will resume day after but if the trend continues newspapers are set to be looking at a low top-line this quarter, say industry experts

e4m by Tasmayee Laha Roy
Updated: Mar 24, 2020 8:42 AM
Newspapers

With the novel coronavirus outbreak refusing to ebb in the country and states going for a lockdown, a number of dailies across the country did not have a print edition on Monday.

Industry experts say this will have a direct impact on ad bills and heavy losses for the sector. As per the latest updates, the circulation will resume day after but if the trend continues newspapers are set to be looking at a low top-line this quarter.

Throwing light on the situation, a media analyst said: “For a newspaper, revenue comes from circulation, advertising, subscriptions, brand extensions and internet and mobile apps. Of all the revenue channels, advertisement contributes more than 75%. Even a day’s loss can make a big dent in the ad bills unless it is made up for in the subsequent editions. Given the lockdown and the slow market, newspapers are already counting their losses.”

Media houses like the Times of India, Hindustan Times, Mid-Day and the Indian Express all announced that there will be no circulation of papers on Monday in Mumbai. According to sources, many other centres might follow suit.

In times like this newspapers are going online but unfortunately the ad spaces aren’t. “At the moment, the market sentiment is not at its best. If we analyse ads, it is mostly those issued by the government or by brands that offer to counter coronavirus - sanitizers, floor cleaners and others. At a time when the ad flow is already suffering, having editions not go to print is a big blow to the ad bills for newspapers,” said veteran journalist Sudeep Mukhia, who was Resident Editor at Hindustan Times and has recently moved on from the position of Managing Editor at CNN News18.

Talking of the ad cycle in a newspaper,  Nishi Kant Thakur, former Chief General Manager, printer and  publisher and Resident Editor at Dainik Jagran, said: “The ad spaces in a newspaper are generally booked a week in advance in case of planned ads or running campaigns. Sometimes the ads come in last moment too and at hiked rates. In general cases, when ads are not carried it is carried in the next edition but the situation is completely different this time. Never before in the recent times have newspapers gone off print for such reasons. The loss in ad bills in this case is unexpected and can be made up only if editions that have gone off print start printing with immediate effect. A week without print editions can cause a brand up to Rs 200 crore.”

Thakur was not speaking on behalf of the group but as an industry observer.

 A quick look at data from IRS Q3 2019 shows that Dainik Jagran, the most circulated daily in India, said in its annual report for financial year 2018-2019 that a sharp rise in newsprint costs and lack of growth in advertisements were proving detrimental for the industry and the financial results reflected that.

The group, combining publications in all five languages, recorded advertisement revenue worth Rs 1382.70 crore, and of this 78% comes from print clearly indicating the importance of print ads for a newspaper.

Sharing some hope in this period of gloom, Mukhia said: “This is an unusual situation and advertisers won’t back out. Print has its set of loyal customers who will flock back to the medium for their brand communication value.”

Newspaper making is an expensive medium but it the ads reduce the overall cost of each issue. But no ads also means saving on the entire production cost. So there is little balance somewhere.

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