FY Q1 revenues were flat despite elections, say print players in the south
Print players across southern India have witnessed slower growth in revenues with impact of Election advertising & advertising from other sectors not meeting expectations. Industry experts are highly optimistic for higher revenues in the next quarter
The quarter one for the FY2014-15 was expected to be a boost to the print players across the southern region, the reasons being plenty. Owing to the scheduled Lok Sabha Elections 2014 and the start of the new fiscal, April-June period was perceived to be a good one.
Experts from the south believe that Q4 was low in terms of growth, though some experienced windfalls during Q4. Media companies hope to have a good start during the Q1 period to help maintain the momentum through the year and peak during the festive season of Q3.
exchange4media spoke to regional print players to gauge their opinion on the Q1 business and their expectation for upcoming Q2 of FY 2015. All the players who spoke to exchange4media, spoke on conditions of anonymity.
A senior executive from a Tamil newspaper remarked, “In Q1 volumes of all vernacular dailies have fallen. Our analysis, says that radio businesses have also dipped. This proves that everyone was waiting for the uncertainty to end. There is more than one reason to this. People now are hopeful for better things to happen. The budget has instilled a feeling of hope and now thing are concrete. In our state, the monsoons have not let us down as badly as we had feared. All things are coming together, and that's a good sign. We are not up to the expected levels, but have also done our introspection and as an optimistic company, look forward to achieve the goal we have set this fiscal.”
Elections being the time for spurts in the advertising spend, gives an opportunity for the print players to get their revenues up.
One of the senior executives from a leading newspaper in Chennai remarked that the Q1 business was though not up to the mark, yet they have performed well compared to the market. He added, “We are on track benchmarked on our internal set targets, however it would have better if we were tracking at least 10-15 per cent than what we achieved. Given that the Q1 revenues included the Election spending, it is not a significant increase. While the national parties advertised heavily, the impact of it in the south was muted given the poll alliances and alignments.”
An advertising head of a newspaper from Bangalore said, “Q1 revenues have not been as great as expected. Given the background of a new dispensation in place, the first quarter did not match up to the 'Acche Din Ayenge ' spirit. Spends are now on the rise and we expect it to get reflected in the second quarter.”
While speaking in a similar vein, CEO of a Kannada newspaper said, “The Q1 business has been flat. The elections definitely infused in the badly needed revenue lifeline to the print industry specially the vernaculars. However, during Q1 of last year there were Karnataka assembly elections, which also contributed significantly in terms of revenue hence a very insignificant growth has been registered during last and current year.”
Due to the Election Commission Code of Conduct, regular government advertising almost comes to a standstill while political ads gain momentum during the elections. This according to experts is both a positive and a negative contributor.
Other sectors contributing towards advertising spends
According to experts, not only political advertising during elections play a major role, as sectors such as education, retail, and automobile is also a part of advertising, which also needs to be looked at and calculated.
Talking about the varied sectors, one of the executives from Tamil newspaper said, “Education sector overall witnessed growth and retail had a mediocre growth. One sector that did not grow was automobile.”
However, Chennai being a retail-centric market, retail could see a significant growth in the second quarter when compared to the last quarter. Education ad spends may be at a standstill during the second quarter, as the admission process for all schools and colleges have been concluded during the last quarter. Real estate again will need to be seen if it will grow, as it again depends on the buying pattern of individuals, say experts.
The first quarter saw only 7-9 percent growth in the overall print industry, while the regional players in the south have witnessed slightly better growth close to about 10-12 percent.
Expectation for the next quarter
Experts are of the opinion that Q1 is always better than Q4 of the last year in general. 5-7 percent increase in growth of revenue from the southern market is expected to take place in the second quarter.
One of the players said, “We were hoping that with the change of government the positive sentiments across the industry and the centre at large would translate into increased advertisements/business activities which did not happen in the last quarter. For Q2 we are expecting some revival in the commercial advertisement category. Also pre-festive season activities are bound to start during Q2, which may give the print media industry a marginal growth on YOY basis.”
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